Chalice Brands Ltd. (OTCMKTS: CHALF) has announced its earnings for the second quarter. The company deals in the production, distribution, wholesale and retail of cannabis. It has 12 dispensaries in Portland, Oregon.
Second quarter report
The second quarter ended on June 30, 2021. The total revenue for half the year is $12.4 million, an increase from 2020, which had a total revenue of $10.2 million. The 22% rise has been caused by the acquisition of Homegrown and strength in retail tickets and traffic.
Chalice reported revenues of $6.9 million, a 26% increase from 2020’s quarterly of the same period where they reported $5.5 million. They had a $3.1 million gross profit (gross margin of 45%) compared to last year’s $1.3million (23% gross margin in 2020). The increased gross margins are because of retail sales of their Bald Peak Flower and an increased share of their vertical product growth. Operating expenses decreased from $6.3 million to $6 million, a decrease of 5%.
For the six months ended on June 30, Adjusted EBIDTA was about $250,000 for this quarter compared with a loss of $750,000 in the second quarter of 2020. Profitability is due to continued cost controls, increased vertical product contribution in Chalice and Homegrown and increased contribution from Homegrown. The company considers adjusted EBIDTA an essential measure of performance and plans to keep using it as it grows.
Net loss for Chalice was $4.495 million compared to $5.394 million for the previous year.
Chalice Brands Ltd. acquisitions in 2021
On April 8, 2021, Chalice announced that it had acquired an 80% stake in the CBD Skincare brand Fifth and Root. The latter has 400 retail stores in the U.S. At Chalice’s general meeting on May 10, 2021, more than 95% lf its shareholders voted for the name Fifth and Root to be changed to Chalice Brand Ltd.
Chalice also purchased 100% ownership in Homegrown Oregon of five retail dispensaries in Salem, Portland, Oregon and Albany at $9.75 million. The number of retail stores in Oregon went from 7 to 12. As a result, Chalice branded products increased to 28% in Oregon compared to 3% before the acquisition.