The Parent Company wraps up its first quarter as a public company with US$281M in cash

TPCO Holding Corp (The Parent Company) (NEO:GRAM.U) (OTCQX:GRAMF) reported its first quarterly results since its IPO in January that showed the cannabis firm had US$281 million in cash and equivalents.  Net sales since January 15, 2021, came in at $39.9 million, a figure that would have been closer to $45.6 million if adjusted for the full quarter beginning in January.  Gross profit in 1Q 2021 was $7.2 million, a gross margin of 18%, while its adjusted EBITDA loss came in at $11.4 million.  READ: The Parent Company strikes agreements to expand supply of high-quality California grown cannabis In a statement, the California-based firm told investors that with its focus on driving stronger direct-to-consumer sales, it expects to shift its sales to “higher-margin product categories,” which should drive expanded gross profit.  CEO Steve Allan told shareholders that the company has “substantial forward momentum.” “Throughout our first quarter of public company operations, our team has worked diligently on the successful integration of our core business units and house of brands to build a strong foundation for sustained growth. This included our recently announced cultivation investments which have bolstered our supply chain with long-term access to high-quality indoor, greenhouse, and outdoor-grown cannabis for use in our suite of branded product lines,” Allan said. The Parent Company’s portfolio includes eight owned and licensed brands in form-factors like flower, pre-rolls, vaporizer cartridges, concentrates, gummies, chocolate, beverages, capsules, tinctures, lozenges, topicals and body care products. A couple of standouts include Monogram, JAY-Z’s luxury cannabis brand, and Caliva, a San Jose-based brand that grows, manufactures and sells its own branded products in more than 250 dispensaries across California. California 'ripe for consolidation' “The California cannabis market is ripe for consolidation, and we plan to leverage our competitive positioning to become true leaders in this market,” Allan added. “In addition, as we look to further expand our operations into new states, we plan to employ an asset-light model, utilizing our existing asset base to drive scale and profitability.” The firm said it had decided to withdraw its previously provided guidance, which included benefits from potential corporate development activities as well as revenue from the company’s divested hemp CBD business line, due to unplanned delays and the “uncertainty inherent in forecasting operating results, given the current status of the California cannabis industry.” The company has hired two external advisory firms with deep backgrounds in identifying, evaluating and executing inorganic opportunities, it added. Separately, Drew Kornreich is resigning from his position as chief M&A officer to pursue other opportunities. Earlier this week, The Parent Company announced a $50 million strategic investment in GH Group Inc through a private placement offering by Mercer Park Brand Acquisition Corp (NEO:BRND.WT) (OTCQX:MRCQF), a special purpose acquisition company, which has struck a definitive agreement to merge with Glass House. Contact Angela at angela@proactiveinvestors.com Follow her on Twitter @AHarmantas