Red White & Bloom Brands Inc. reported it has filed its Condensed Interim Consolidated Financial Statements (“the Financial Statements”), Management’s Discussion and Analysis (“MD&A”), and associated certifications for its first quarter ended March 31, 2024. As a reminder to all of its shareholders, the Company will hold its Annual General Meeting (“AGM”) on Friday, June 14th, 2024.
Colby De Zen, President, stated, “After significant efforts, the Aleafia transaction was successfully closed in mid-January 2024. With the closing behind us, the RWB management team was finally given the opportunity to begin the process of implementing changes and commencing integration. We attacked the integration with a three-prong approach; The first order of business was to right size Aleafia, which included the complete overhaul of C-Level executives. Our next step was to comprehensively reassess our entire product lineup using a variety of metrics, such as market share, margin analysis, emerging trends, and product formats. This comprehensive review extended throughout the value chain evaluating third-party vendors, as well as making strategic decisions to enhance our in-house capabilities through automation and internal investments, while also capitalizing on procurement synergies across the company.”
Recent business highlights for the Company’s first quarter ended March 31, 2024 and subsequent to March 31, 2024
- On January 15, 2024, the Company announced that, in connection with the Aleafia Group’s CCAA proceedings, the parties successfully closed the previously announced sale transaction on January 12, 2024 (the “Transaction”). Pursuant to the Transaction, RWB (PV) Canada Inc. (the “Purchaser”), a wholly-subsidiary of RWB, acquired the intellectual property assets of Aleafia Health and subscribed for shares in the capital of each of Emblem Cannabis Corporation (“ECC”), Canabo Medical Corporation (“Canabo”) and Aleafia Retail Inc. (“Retail” and collectively with ECC and Canabo, the “Companies”). As a result of the Transaction and Approval and Vesting Order, the Purchaser became the sole shareholder of the Aleafia Purchased Entities. Additional details of the consideration for the Transaction can be found in the Company’s 2023 financial statements.
- On February 27, 2024, the OMMU approved our manufacturing facility in Sanderson, Florida for extraction allowing the Company to in-source distillate production for the first time in Florida which will substantially increase the product mix and SKU selection for our operations in that state.
- In April 2024, Platinum Vape 5/10 distillate cartridges were approved and debuted at all of our active medical retail locations in Florida.
- In May 2024, Platinum vape distillate disposables were approved and debuted at all of our active medical retail locations in Florida.
- As of the date of this release, adult use sales are anticipated to commence in Ohio in the next sixty (60) to ninety (90) days. Platinum Vape products are already well positioned in Ohio as part of an executed licensing agreement with a vertically integrated licensed producer and distributor in Ohio. Ohio is projected to generate adult-use sales in excess of $1.5 billion by 20271.
2024 First Quarter (“2024-Q1”) Financial Highlights
- Revenues were $22.6 million for 2024-Q1, a $2.7 million increase over the previous quarter (2023-Q4); the increase was partially attributable to the closing of Aleafia during the quarter. Revenues for 2024-Q1 were lower by $3.9 million in comparison to 2023-Q1 revenues of $26.5 million primarily due to the targeted divestiture of non-strategic operations.
- Gross profit, before fair value adjustments, was $7.9 million for 2024-Q1, a $0.5 million increase over the previous Quarter (2023-Q4); the increase was partially attributable to the closing of Aleafia during the quarter. Gross profit, before fair value adjustments for 2024-Q1 was $1.5 million lower than restated 2023-Q1 gross profit before fair value adjustments of $9.4 million primarily due to lower sales volume.
- Operating expenses were $12.1 million for 2024-Q1, an increase of $2.9 million compared to restated 2023-Q1 operating expenses of $9.2 million; the increase was partially attributable to the closing of Aleafia in the quarter, an increase in non-cash provisions and depreciation and amortization, offset by a reduction in operating expenses elsewhere in the company.
- Other income was $3.0 million, an increase of $9.6 million compared to restated 2023-Q1 other expenses of $6.6 million primarily due to the gain on investment associated with the closing of the Aleafia acquisition.
- EBITDA2 for 2024-Q1 was $5.1 million compared to negative EBITDA of $89.7 million for 2023-Q4; an increase of $94.8 million primarily due to the Company having recorded impairments of $85.2 million in 2023-Q4 and the gain on investment of $7.6 million associated with the Aleafia acquisition realized in 2024-Q1. EBITDA for 2024-Q1 was $5.9 million higher than restated 2023-Q1 EBITDA of negative $0.9 million primarily attributed to the gain on investment associated with the Aleafia acquisition.
- Adjusted EBITDA2 was $0.1 million for 2024-Q1, a decrease of $1.7 million compared to restated 2023-Q1 Adjusted EBITDA of $1.8 million.
About Red White & Bloom Brands Inc.
Red White & Bloom is a multi-jurisdictional cannabis operator and house of premium brands operating in the United States, Canada and select international jurisdictions. RWB is predominantly focusing its investments on major U.S. markets, including Arizona, California, Florida, Missouri, Michigan, and Ohio in addition to Canadian and international markets by virtue of its acquisition of the former Aleafia group of companies.