Grown Rogue Reports Record Q3 2021 Results, 73% Gross Margin and 55% aEBITDA Margin in Michigan

  • Positive Net Income of $0.24M for the first time in company history
  • Q3 2021 Sales Revenue of $3.03M versus $1.37M in Q2 2021, an increase of 121%
  • Q3 2021 aEBITDA1 margin of 25% ($0.77M), versus 12% ($0.18M) in Q2 2021, an increase of 330% ($0.59M)
  • Indoor Revenue of $2.81M, versus $0.75M in Q2 2021, an increase of 277%
  • Michigan operations (through Golden Harvests, LLC) report industry leading gross margins of 73% (before fair value adjustments) and aEBITDA1 margins of 55%
  • Fiscal Q4 guidance of 18-22% sequential revenue growth

September 30, 2021 08:00 AM Eastern Daylight Time

MEDFORD, Oregon–(BUSINESS WIRE)–Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a multi-state cannabis company with operations and assets in Oregon and Michigan, reports its financial and operating results for the third quarter ended July 31, 2021. All financial information is provided in U.S. dollars unless otherwise indicated.

Financial and Business Highlights

  • Seventh consecutive quarter, including pro-forma results, of positive aEBITDA1
  • Company-record 59% gross margin before fair value adjustments
  • Increased indoor production run rates from 200 pounds/month in Q2 2021 to 1,000 pounds/month in Q3 2021
  • Grown Rogue partner, Canopy Management, LLC, exercised option and acquired 60% controlling interest of Golden Harvests, LLC (“Golden Harvests”)
  • Subsequent to quarter-end, Grown Rogue appointed Ryan Kee as Chief Financial Officer
  • Subsequent to quarter-end, Golden Harvests and Pure Extracts Inc. formed a Joint Venture to Expand Product Offerings in Michigan
  • Subsequent to quarter-end, Grown Rogue issued an unsecured promissory note for $800,000.

“Just over a year ago, Grown Rogue doubled down on our business strategy of being the leading low cost, high quality cultivator by investing heavily in production, team, and systems,” said Obie Strickler, CEO of Grown Rogue. “These investments have resulted in efficiency metrics, like our 73% gross margins and 55% aEBITDA margins in Michigan, that are unmatched by public operators. I am very proud of our team and where our efficiency metrics are trending in both states, but especially Michigan. Michigan is one of the lowest priced wholesale flower states in the country so reporting industry leading metrics for both gross margin and aEBITDA margin, is encouraging. We believe our costs per pound will continue to move lower with additional economies of scale and expect to continue the trend of cost improvements in fiscal Q4 and in fiscal 2022.”

Highlights by State

Oregon Operations

  • Revenue of $1.28M, a year over year increase of 42%
  • Indoor Revenue of $1.06M, a sequential increase of 42%
  • Product sale gross margins (before fair value adjustments) of 40% vs 36% in Q2 2021
  • aEBITDA1 of approximately $0.1M
  • Production run rate expected to increase from Q3 2021 of 600 pounds/month to 700 pounds/month in Q4 2021
  • Expect a record outdoor harvest in Q4 of 4,000 to 4,500 pounds, compared to 2,300 pounds in the previous outdoor harvest
  • Expect to end 2021 fiscal year with a cultivation run rate of approximately 12,000-14,000 pounds annually

Michigan Operations (through Golden Harvests, LLC)

  • Revenues of $1.75M, a sequential increase of 27% versus pro-formaQ2 2021
  • aEBITDA 1 of $0.96M, a sequential increase of 185% versus pro-formaQ2 2021
  • aEBITDA 1 margin of 55% versus pro-forma2 24% in Q2 2021
  • Continued construction to maximize output from the 80,000 square foot facility. 45,000 square feet are now in operation, with another 20,000 square feet expected to be online by June 2022
  • Added two new flower rooms during Q3 2021 which will produce approximately 1,400 pounds per year
  • Production run rate expected to increase from Q3 2021 of 400 pounds/month to 550 pounds/month in Q4 2021
  • Improved wholesale position in bulk flower sales from 20th in Q2 2021 to 16th in Q3 2021 and 12th for Q4 to date, according to MarketScape
  • Pre-packaged flower accounted for approximately 30% of Grown Rogue sales, a 50% increase, versus 20% for the state pre-packaged flower sales, according to MarketScape
  • Grown Rogue proprietary, nitrogen sealed, pre-packaged flower pricing averaged $2,700 per pound vs market average sales price of $2,250 (according to MarketScape) a 20% premium illustrating our strong brand presence
  • Expect state market share to increase in fiscal 2022 as additional cultivation capacity comes online and the Company enters new product categories

Selected Financial Information (Complete financial tables have been filed on

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