- Generated revenue of $9.2 million, EBITDA of $2.3 million and Adjusted EBITDA of $1.0 million.
- 13 th consecutive quarter of positive EBITDA 1 and positive Adjusted EBITDA 1 .
- Regulatory approval received for the Company’s previously announced acquisition of entities controlling a Tier I cultivation facility and an operating manufacturing facility in Ohio – on track to close prior to the end of August 2023.
- Ownership transfer of Columbus, Ohio dispensary expected to be approved by the end of 2023, giving Vext two dispensaries in the state.
Vancouver, British Columbia–(Newsfile Corp. – August 23, 2023) – Vext Science, Inc. (CSE: VEXT) (OTCQX: VEXTF) (“Vext” or the “Company”) a U.S.-based cannabis operator with vertical operations in Arizona and Ohio2, today reported its financial results for the period ended June 30, 2023. All currency references used in this news release are in U.S. currency unless otherwise noted.
Summary Financial Results
| Q2 2023 | Q1 2023 | Q2 2022 | |
| Revenue | $9,187,122 | $9,110,651 | $8,765,798 |
| Gross margin before impact of biological assets (%)1 | 29% | 52% | 70% |
| Adjusted Gross Margin (%)1,3 | 30% | 51% | 75% |
| EBITDA1 | $2,264,980 | $1,638,009 | $4,155,368 |
| Adjusted EBITDA1 | $1,049,114 | $2,850,918 | $4,847,110 |
| Adjusted EBITDA margin (%)1 | 11% | 31% | 55% |
Management Commentary
Eric Offenberger, CEO of Vext, commented, “During Q2, our team’s efforts to drive more traffic with targeted promotions and a broad selection of value-based products were successful and led to gains in market share in a challenging environment. We made the strategic choice to accept lower gross margins in Q2, in order to generate a return on the product from our recently idled outdoor grow as pricing remains under pressure due to overcapacity in the market. We are well positioned from a vertical perspective, with indoor capacity from our Eloy facility picking up the slack and ensuring we are matching demand at our owned retail locations with our own internal supply. We expect gross margins to progressively recover through the second half of Q3 and in Q4 on the way back to more normalized levels. This quarter marked our thirteenth consecutive quarter of reporting positive EBITDA1 and positive Adjusted EBITDA1, demonstrating our ongoing commitment to generating profitability, while prudent working capital management contributed to robust cash flow from operations of $3.4 million through the quarter.”
Mr. Offenberger continued, “Operations in Ohio continue to track well over the second quarter. We have received regulatory approval and remain on track to close the Ohio Acquisition by the end of August, enabling us to add a fully operational vertical footprint in the state. The Ohio market continues to expand with patient count up 23% in June 20234as compared to the same period last year. We view Ohio as a very attractive growth opportunity, with its limited license structure and the recreational use initiative making Ohio’s November ballot. Through the combination of our strong balance sheet and strategic positioning in two limited license states, we expect to continue generating profitability and shareholder value through the remainder of the year and through 2024.”
Update on Ohio Acquisition
The Company also announces that it has received the approval of the Ohio Department of Commerce for the ownership transfer of Appalachian Pharm Processing, LLC, an Ohio limited liability company, together with its subsidiaries and affiliated companies (collectively, “APP“), pursuant to the Company’s previously announced acquisition of APP for a total consideration of approximately $12.5 million, with $11 million paid in cash or promissory notes and $1.5 million through the issuance of common shares of Vext (the “Ohio Acquisition“). The Company is working with APP to satisfy the remaining conditions of closing and currently expects that closing of the Ohio Acquisition will occur prior to the end of August 2023, subject to the terms of the definitive purchase agreements. For further details about the terms of the Ohio Acquisition, see the Company’s news release dated December 15, 2022.
As a result of closing of the Ohio Acquisition, Vext will also obtain the right to acquire ownership of a cannabis dispensary in Columbus, Ohio. The Company has applied to the Ohio Board of Pharmacy for an ownership transfer of such dispensary and expects to receive approval this year and to close promptly after receipt of regulatory approval.
Summary of Recent Announcements
- On August 10, 2023, the Company announced that Stephan Bankosz has resigned as CFO and Corporate Secretary of the Company effective August 25, 2023 to pursue other opportunities. Vext will appoint experienced financial executive and operator Trevor Smith as CFO. Nalee Pham, the Company’s Chief of Staff and a director of the Company’s wholly-owned operating subsidiary Herbal Wellness Center, LLC, has been appointed Corporate Secretary.
Q2 2023 Financial Results Conference Call
Vext will host a conference call and webcast on Wednesday, August 23, 2023 at 8:00 a.m. ET to discuss its second quarter financial results.
Date: August 23, 2023 | Time: 8:00am ET
Participant Dial-in: 416-915-3239 or 1-800-319-4610
Replay Dial-in: 1-800-319-6413
Conference ID: 10022320
Playback #: 0372 (Expires on September 6, 2023)
Listen to webcast:https://www.gowebcasting.com/12681
