Marijuana Business News

Simply Solventless gives investors rosy guidance

Posted September 23, 2024 on Author Jordan S. Zoot

Revenue is projected to grow 65% sequentially.

Simply Solventless Concentrates Ltd. (SSC) (TSXV: HASH) gave investors some rosy guidance for the company’s third-quarter results. SSC is projecting growth rates of 65% sequentially and 373% year-over-year. The company attributed the growth to its successful brands and the acquisition of CannMart

CEO Jeff Swainson said, “Q3 2024 is shaping up to be a transformative quarter for SSC with strong organic revenue growth in Astrolab, Frootyhooty and Lamplighter being complimented by the closing of our CannMart Inc. acquisition on September 12, 2024. The deployment of capital into CannMart Inc.’s Roilty and Zest Cannabis inventory is ramping revenue, and material cost reductions are being achieved through our CannMart restructuring efforts.”

The CannMart acquisition closed on September 12. The deal was announced in June when the company agreed to buy CannMart Inc., a subsidiary of Lifeist Wellness Inc., in a bid to expand its cannabis concentrate business.

Revenue Growth

SSC forecasts that its quarterly gross revenue during the third quarter will be roughly C$7 million versus the second quarter revenue of C$4.2 million and a big jump over last year’s third-quarter revenue of C$1.4 million.

“Overall, Q3 2024’s projected annualized gross revenue, adjusted EBITDA and normalized net income of C$28,000,000, C$4,000,000, and C$3,600,000 respectively,” said Swainson. “SSC’s projected September 2024 annualized gross revenue of C$33,000,000 demonstrates our current revenue growth trajectory as we continue towards our goal of C$40,000,000 annualized gross revenue, C$6,200,000 annualized adjusted EBITDA and C$6,000,000 annualized normalized net income.”

The estimated adjusted EBITDA of approximately C$1 million represents growth rates of 5% quarter over quarter and 270% compared to the same quarter last year, and normalized net income of roughly C$900,000 is consistent with the prior quarter and a growth rate of 372% compared to the same quarter for last year.

B2B dips slightly

The only bad news from SSC was that the company had a slightly lower B2B and tolling revenue compared to the second quarter due to seasonality. The company said in a statement, “This is expected to slightly reduce gross margins for Q3 2024. B2B and tolling revenue is expected to return to Q2 2024 levels during Q4 2024. SSC also expects that cost synergies related to the acquisition of CannMart Inc. will be fully realized by early Q4 2024, contributing to profitability.”