The Cannabist Company (CBSTF) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $125.2M, up 2% sequentially but down 3% year-over-year, with adjusted EBITDA of $17.5M (14% margin) and a net loss of $13.6M, reflecting improved operating efficiency and cost controls.

• Wholesale revenue grew 24% sequentially, now 15% of total revenue, with brand partnerships and commercial expansion across seven markets.

• Major divestitures and restructuring initiatives, including exits from Florida, Arizona, Utah, and parts of Virginia, are expected to generate up to $111.5M in gross proceeds and $10M in annualized cost savings.

• The company operates 82 retail locations and 26 cultivation/manufacturing facilities across 15 U.S. jurisdictions, focusing investment in high-potential markets like Ohio, New Jersey, Delaware, and Virginia.

• Top five markets (Colorado, Maryland, New Jersey, Ohio, Virginia) contributed 63% of Q2 revenue and 90% of adjusted EBITDA.

Financial highlights

• Q2 2024 revenue: $125.2M, up from $122.6M in Q1 2024, down from $129.2M in Q2 2023.

• Adjusted gross margin: 38.5% in Q2 2024, down from 39.1% in Q1 and 40.3% in Q2 2023.

• Adjusted EBITDA: $17.5M (14% margin), up from $15.3M in Q1, down from $20.3M in Q2 2023.

• Net loss: $13.6M, improved from $34.6M in Q1 2024 and $29M in Q2 2023.

• Cash at quarter end: $22M, down from $44.5M at Q1 2024 and $39.3M at year-end 2023.

Outlook and guidance

• No updated guidance due to pending divestitures; management expects further margin improvement and progress toward free cash flow, with capital expenditures projected at $2–$3M per quarter.

• Focus on expanding in adult-use markets (Ohio, Delaware, Virginia) and leveraging production optimization.

• Liquidity is sufficient for short-term obligations, but future growth may require additional capital.