Columbia Care Reports Record Fourth Quarter and Full Year 2020 Results; Reaffirms 2021 Guidance

Outperforms Full Year 2020 Outlook, Reaffirms 2021 Combined Revenue and Profitability Guidance
Record 4Q Combined Revenue of $81.8 Million, an Increase of 51% QoQ and 234% YoY; FY 2020 Combined Revenue up 151% to $197.9M.
Record 4Q Combined Adjusted EBITDA of $9.5 Million, an Increase of 124% QoQ and up $24 Million YoY
Closed Acquisitions of Project Cannabis in December 2020 and The Healing Center San Diego in January 2021; Announced Definitive Agreement to Acquire Green Leaf Medical in December 2020
Ended the Year with $61M Cash and Raised $140M Subsequent to Year End 2020, Bolstering Liquidity Position in Support of Long-Term Growth Initiatives

NEW YORK–(BUSINESS WIRE)– Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (“Columbia Care” or the “Company”) today reported financial and operating results for the fourth quarter and full year ended December 31, 2020. All financial information is audited and provided in US dollars unless otherwise indicated.

“We closed out 2020 with record results across key metrics, demonstrating the strength of our growth strategy and the potential of our expansive market portfolio,” said Nicholas Vita, CEO of Columbia Care. “We generated significant sequential and year-over-year growth across combined revenue, gross profit, and Adjusted EBITDA, as well as robust gross margin expansion. We have outperformed our 2020 outlook, solidifying our position as an industry leading MSO. Corporate profitability continued to expand as we further leverage our national scale. Including the full fourth quarter’s financial contribution of Project Cannabis, Columbia Care generated approximately $87M in Combined Revenue and $12M in Adjusted EBITDA.”

“In 2020, we expanded our footprint in the top two global cannabis markets with accretive acquisitions in California and Colorado. We generated strong organic growth in our existing markets and plan to capitalize on favorable regulatory tailwinds in medical markets that are converting to adult use across the country. With our footprint in 17 U.S. markets, three of which will become operational in 2021, we are well positioned to take advantage of the tremendous opportunity for growth as cannabis adoption progresses.”

“Our acquisition of Green Leaf Medical (GLeaf) remains on track to close in 3Q 2021 and is expected to expand our scale and vertically integrated footprint in four key, limited license markets – Maryland, Ohio, Virginia, and Pennsylvania, where we will become one of the largest fully-integrated operators in each state. We are also on track to open the first co-located medical and adult-use dispensary in Boston in 2Q 2021, and recently launched adult-use sales in Arizona. In 2021, we will leverage our vertically integrated national platform for key branding initiatives, both at the product level and in our stores. We will be rolling out several of our nationally-recognized, trusted brands across our markets and introducing a more approachable, more curated retail experience at our dispensaries to redefine the customer journey. We are excited to employ the many levers we have to drive outsized growth and margin expansion in 2021.”

Fourth quarter 2020 combined and reported results include one full quarter of contribution from The Green Solution (TGS) in Colorado, which the Company acquired on September 1, 2020, as well as partial contribution from Project Cannabis, which the Company acquired on December 2, 2020.

Selected State Level Highlights:

Arizona:

Launched adult-use cannabis sales in Tempe and Prescott dispensaries in January 2021.
Continue to accelerate development plans for increasing canopy and yield at Chino Valley facility, while driving efficiencies in biomass production and launching branded edible lines and other manufactured products in Tempe.

California:

Closed acquisition of Los Angeles-based Project Cannabis on December 2, 2020, adding four dispensaries and one 36,000sqft state-of-the-art cultivation facility; retail distribution to over 100 dispensaries statewide.
In January 2021, closed acquisition of The Healing Center San Diego (THCSD), further enhancing the Company’s retail presence, scale and other operational advantages from Project Cannabis and existing facilities in the State. Expanded THCSD’s footprint and incremental point-of-sale stations in Q1 2021 as originally planned.
Approximately one-third of market revenue derived from wholesale.
Leveraging Project Cannabis’ brand extension with Columbia Care’s manufacturing facility in San Diego.
Pro forma, including a full quarter contribution of Project Cannabis, California approached breakeven in 4Q 2020.

Colorado

Continued strong retail growth trends and improved SKU mix between in-house and third-party brands.
Optimized indoor and outdoor cultivation operations to increase plant count and yields; achieved record setting outdoor harvest of more than 42,000 lbs. of salable finished goods.
Wholesale revenue up 37% sequentially in Q4, with product mix shifting to 75% finished goods.
Top five market by combined revenue and Adjusted EBITDA in 4Q 2020.

Florida:

Revenue up more than 50% sequentially in 4Q 2020, signaling strong momentum for 2021 as operational improvements materialize.
Increased cultivation yields and potency, with plans to add incremental canopy in 2H 2021.
Improved retail customer engagement and loyalty program and grew overall medical patient count during 4Q 2020.
Opened three new dispensaries in Brandon, Longwood and Delray in 4Q; opened 8 total dispensaries in 2020.

Illinois:

Revenue up more than 60% sequentially in 4Q 2020, signaling strong momentum for 2021.
Multiple new SKUs being introduced in 2Q 2021, including edibles.
Wholesale distribution to ~68% of the operators in the state.
Villa Park (Chicagoland) dispensary adult-use sales have continued to grow since its launch in late 3Q 2020; Chicago (Jefferson Park) dispensary expansion expected to be completed by 3Q 2021.
Top five market by combined revenue and Adjusted EBITDA in 4Q 2020.

Massachusetts:

Adult-use sales planned to commence in 2Q 2021 at downtown Boston co-located adult-use dispensary.
Current plans to increase throughput for wholesale concentrates and edibles through automation in 1Q 2021, and increase throughput for wholesale flower derivatives through automation in 2Q 2021. Wholesale represented 7% of revenue in 4Q 2020 and is trending similarly for 1Q 2021.
Top five market by combined revenue and Adjusted EBITDA in 4Q 2020.

New Jersey:

Commenced dispensary operations in June 2020.
Harvests from phases two and three of planned canopy expansions are expected to commence in 2Q 2021 and 3Q 2021, respectively.
Two additional dispensaries expected to open in 2Q and 3Q 2021, bringing total to the state maximum of three.
Targeting approximately $24 million of capex for two additional dispensaries and canopy expansions in 2021; we have secured a second facility providing 300,000sqft of canopy, manufacturing, and distribution space to support medical and adult-use.
Adult-use sales are not considered in 2021 guidance; provide upside to 2021 financial outlook.

Ohio:

First cultivation wholesale in June 2020; first manufacturing wholesale commenced in 4Q 2020; now delivering to 83% of open dispensaries.
Revenue growth of 450% YoY (4Q 2020 v. 4Q 2019) and 20% sequentially (4Q 2020 v. 3Q 2020), with majority of 2020 revenue from dispensaries as wholesale ramps.
Cultivation canopy expansion under way.
Top five market by combined revenue and Adjusted EBITDA in 4Q 2020.

Pennsylvania:

Increased operational hours at retail by 25% and expanded number of point-of-sale stations.
Positioned to be the largest wholesaler in the state following acquisition of GLeaf in 3Q 2021, with more than 274,000sqft of cultivation capacity by the end of 2021 distributing to approximately 85% of open dispensaries.
Top five market by combined revenue and Adjusted EBITDA in 4Q 2020.

Virginia:

Opened first medical dispensary in late December 2020; Columbia Care remains one of only four licensed operators in the state.
Expect wholesale to begin in March 2021, with the potential for approved flower product sales in 3Q 2021.
Plans to open an additional dispensary in September 2021 and accelerate four additional dispensary openings by year-end, for a total statewide retail footprint of six dispensaries.
When combined with GLeaf, the Company will have 147,000sqft of cultivation and manufacturing capacity.