StateHouse Reports Financial Results for the Second Quarter of 2024
In Q2 2024, net revenue rose by 10%, reaching $27.8 million, while the gross margin remained strong at 50.8%.
The company achieved a positive net income of $0.2 million and an Adjusted EBITDA of $4.9 million during this quarter.
SAN DIEGO and TORONTO – StateHouse Holdings Inc. (“StateHouse” or the “Company”) (CSE: STHZ) (OTCQB: STHZF), a vertically integrated cannabis company focused on California, has announced its financial results for the three-month period ending June 30, 2024 (“Q2 2024”), along with some business updates. The unaudited condensed interim consolidated financial statements for Q2 2024, along with the management’s discussion and analysis, will be available for download on the Company’s investor website. All dollar amounts in this report are in U.S. currency.
Financial Highlights for Q2 2024
Key Metrics
- Net revenues for Q2 2024 increased by 10% to $27.8 million, up from $25.3 million in Q2 2023.
- Retail revenues amounted to $13.5 million, making up 48.5% of total sales for Q2 2024.
- Branded wholesale and manufacturing revenues reached $10.7 million, accounting for 38.5% of total sales in Q2 2024.
- Cultivation revenues totaled $3.6 million, contributing 12.9% to total sales for Q2 2024.
- Gross profit before adjustments was $14.1 million in Q2 2024, compared to $12.3 million in Q2 2023.
- Consolidated adjusted gross margins improved to 50.8% in Q2 2024 from 48.6% in the previous year.
- Net income for Q2 2024 was $0.2 million, a significant improvement from a net loss of $2.1 million in Q2 2023.
- Adjusted EBITDA rose to $4.9 million in Q2 2024, compared to $0.9 million in Q2 2023.
Insights from Management
“We made significant progress during the quarter, driven by our innovative product lines that are boosting both growth and profitability,” stated Ed Schmults, Chief Executive Officer of StateHouse. “Transactions grew by 14% compared to the same period last year, highlighting consumer demand for our offerings. Our adjusted gross margin is now at 50.8%, net income is $0.2 million, and Adjusted EBITDA stands at $4.9 million, thanks to our cost-saving initiatives and the introduction of over 24 new high-margin products in the past year.”
Mr. Schmults further noted, “By effectively managing our operating expenses and enhancing our product mix, we are achieving strong operational performance. The positive feedback from our customers reinforces our commitment to meeting the evolving needs in the cannabis sector. We are well-positioned to sustain this momentum as we navigate the growing cannabis market.”
Brands and Product Innovations
Recent Developments
- The Company has introduced 24 new products across 7 brands, along with over 40 in-house developed strain formulations, which account for approximately 15% of year-to-date sales for 2024.
- StateHouse's sales team has improved product lines for better visual merchandising, including the launch of the new Dime Bag Cartridge and All-In-One hardware, which is currently leading in the vape product market.
- The latest offerings for young plant sales—including cuttings, clones, and teens—are performing exceptionally well, with sales increasing more than 10 times since their introduction.
Operational Update
Overall revenue for Q2 2024 reached $27.7 million, reflecting a 3.6% increase from Q2 2023, largely driven by a 14% rise in transactions. The gross profit before biological asset adjustments was robust at $14.1 million, representing 50.8% of total revenues.
The Company’s retail strategy has successfully boosted customer traffic by 18%, with new customer visits increasing by 9% in the first half of 2024 compared to the previous year. The STASH loyalty program has grown to over 316,291 members as of late August, while online sales surged by 17% in the first half of 2024. Notably, Buy Online, Pickup in Store (BOPIS) sales have more than doubled during this timeframe.
Cultivation revenue for the second quarter saw an impressive increase of 203.5% compared to the same period last year. This growth is attributed to improved yields and high-quality product output, facilitated by the successful installation of supplemental CO2 in all flowering ranges in Q2 2024. Ongoing innovations in cultivation, including trials with new lighting techniques, are expected to further enhance yields.
The Company's management is actively developing strategies to strengthen its financial position while working with lenders to restructure its debt obligations.
About StateHouse Holdings Inc.
StateHouse is a prominent vertically integrated cannabis company with licenses that cover retail, major brands, distribution, cultivation, nursery, and manufacturing. Founded in 2006 as Harborside, it was among the first to obtain a medical cannabis license in the United States. The Company operates 11 dispensaries across California and has built a solid reputation in the cannabis market, offering a diverse range of products under various brands to over 700 retailers.
The Company is publicly traded under the ticker symbols CSE: STHZ and OTCQB: STHZF. StateHouse is committed to making cannabis safe and accessible for a wide community of consumers.
Frequently Asked Questions
What are the main highlights of StateHouse's Q2 2024 results?
StateHouse reported a 10% increase in net revenue to $27.8 million, a positive net income of $0.2 million, and Adjusted EBITDA of $4.9 million.
How did the revenue distribution break down across product lines?
Retail revenues contributed $13.5 million, branded wholesale and manufacturing revenues accounted for $10.7 million, and cultivation revenues were $3.6 million.
What strategies has StateHouse implemented to achieve its growth?
The Company emphasized product innovation, cost-saving measures, enhanced retail strategies, and a robust loyalty program to boost customer engagement and sales.
What future plans does StateHouse have following these results?
StateHouse aims to continue expanding its product offerings and improving operational efficiencies while actively exploring opportunities to strengthen its financial position.
Where can I find more information about StateHouse Holdings Inc.?
Further information can be found on the Company’s official website and through its investor relations channels.
