Stem Holdings Inc. (OTCMKTS:STMH) has offered a business update that includes preliminary financial results for the period ended March 31, 2021, and full quarter results of combined operation since Driven Deliveries Inc.’s acquisition in December 2020.
Stem Holdings reports first integrated combined results with Driven Deliveries
Stem CEO Adam Berk said that stem has been driving synergistic results following the successful integration of Driven Deliveries and Foothill Health and Wellness dispensary in Sacramento with reduced SG&A, accretive margins, and record sales. Currently, Driven Deliveries services around 92% of the Californian population, which is the biggest cannabis market globally. It is expected that it will drive Stem’s Products and brands expansion in California and targeted markets such as Oregon. Berk said that the company’s execution capability, strong and lean infrastructure will support expansion plans into new markets. Following the Driven Deliveries acquisition, the company has integrated its finance, account, and legal teams
The company will release financial results for the quarter ending march on or around May 15, 2021. Stem Holdings expects quarterly gross revenue of $12.88 million, which is 456% YoY growth and a gross margin of $5.23 million. In Q1 20201, the company saw 81.5% in total units sold and transactions increasing 97% while average order size grew 17.5%.
Stem Holdings To increase Oregon canopy
Stem Holdings expects to increase its Oregon canopy by 10,000 sq. ft. in April 2021 and expects $8 million in incremental gross revenue and 50% gross margin in the next 12 months due to the expansion. Also, the company anticipates enhancing production through automation and CAPEX investment for concentrates in its new butane hash oil lab and via margin accretive measures.
Recently, Budee welcomed several best-in-class products to its e-commerce platform that serves Californian consumers. Among the introduced brans is the new Yerba Buena™ Flower, which the company expects to generate around $2.5 million in revenue and a gross margin of $1.4 million in the next 12 months. Budee™ DaaS will be coming to Oregon through Stem Holding’s dispensaries and will generate $4.4 million in the next year.