JohnCM
3 years ago
Message from the CEO
I would like to open this note by first thanking the entire 4Front team, from our boots-on-the-ground staff in our facilities and at Mission Dispensaries to our leadership team and everyone who has worked hard through the pandemic to make 4Front the prominent company we are today. We are very proud of the progress we have made as a company in 2020 and through the first half of this year.
We are extremely focused on the huge opportunities that are opening up for us in California. We are confident that our low-cost production processes from our Washington facilities will be highly transferable to the Golden State and our distribution partnership with Nabis in addition to other like-minded partners will help us make a big splash in the state. 4Front is also on track to expand its footprint in Massachusetts with a third dispensary in the Town of Brookline. In addition, our “Big Daddy” expansion in Illinois is scheduled to break ground in Q3 of this year, perfectly timed alongside the state’s significant momentum in cannabis sales year-to-date.
As we continue to build out our operations and portfolio across the country, 4Front investors have a lot to look forward to in the coming months and years. The future we are building is bright, and I'm thrilled to be on this successful journey together.
Let's go!
Leo Gontmakher, CEO, 4Front Ventures
PRODUCT HIGHLIGHTS
Potential Primate - Funky Monkey
Discover an earthy, strawberry-banana scent carried over into that similar tangy taste with some delayed notes of cream and sugar. Effects are leaning on the sativa side with a nice 'get up and go', energizing feeling. Coming soon to Massachusetts Mission Dispensaries!
Download Presentation
View Here
FEATURED NEWS
4Front Ventures Reports First Quarter 2021 Financial Results and Provides Business Update
PHOENIX, May 24, 2021.
• Q1 2021 Systemwide Pro Forma Revenue of $31.4 million, an increase of 26% over Q4 2020
• Q1 2021 Adjusted EBITDA of $5.9 million, representing an Adjusted EBITDA Margin of 19%
• Reiterated FY2021 guidance for Systemwide Pro Forma Revenue of $170-180 million and Adjusted EBITDA of $40-50 million
Read More
4Front Ventures Corp. Receives Unanimous Approval from Brookline Select Board to Begin Operations of Its “Mission Brookline” Dispensary in Massachusetts
PHOENIX, May 24, 2021 / – 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) (“4Front” or the “Company”), a vertically integrated, multi-state cannabis operator and retailer, announced it has received unanimous approval from the Brookline Select Board to open the Company’s Mission Brookline adult-use dispensary in Massachusetts.
Read More
4Front Ventures Corp. Partners with Homegrown Detroit to Support Legacy Detroiters’ Equitable Access to the Cannabis Sector
PHOENIX, May 13, 2021 – 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) (“4Front” or the “Company”), a vertically integrated, multi-state cannabis operator and retailer, announced its retail brand, Mission Dispensaries has partnered with Homegrown Detroit, a city-wide initiative aimed at creating a more equitable, accessible cannabis industry in the City of Detroit.
Read More
4Front Ventures Corp. Makes $75,000 Contribution to Elk Grove Village, Illinois to Support Local Community and Its Health and Wellness Initiatives
Company to Donate: $30,000 to Assist with Elk Grove Village’s Community Events and Outreach Programs; Additional $15,000 to Go Towards Supporting Alexian Brothers Medical Center’s Foundation, Elk Grove Village Police Drug Education Program and Kenneth Young Youth Center.
Read More
View All News
4FRONT IN THE MEDIA
New Cannabis Ventures
CEO, Leo Gontmakher, talks to Carrie Pallardy of New Cannabis Ventures in an exclusive article about 4Front's U.S. footprint, and plans for the California market.
Read the full article and listen to Leo's full interview here
Federal Cannabis Legislation Roundup: Summer 2021
Cannabis Business Times, Raj Chander - June 14
“SAFE Banking enjoys the support of the banking industry and many Republicans, so it could be seen as a fallback option should comprehensive legalization ultimately fail,” said Kris Krane, Founder of 4Front Ventures and President of Mission Dispensaries.
Read the Full Article Here
Should You Buy This Under-the-Radar Cannabis Stock?
The Motley Fool, Zhijuan Sun - May 19
This little-known pot grower is dominating Washington's cannabis market.
Read Full Article Here
4Front Ventures | Fireside Chat | Benzinga Cannabis Capital Conference
Andrew sits down with Insider Magazine's, Yeji Jesse Lee, for a Fireside Chat at the Virtual Benzinga Cannabis Capital Conference and discusses a multitude of topics on 4Front & the cannabis industry in general.
Watch Here
KRIS KRANE'S FORBES COLUMN
The Cannabis Industry Remembers Steve Fox
"..When the history books are written, the name Steve Fox will be among the most recognized as being responsible for ending marijuana prohibition and ushering in the age of legalization. If you have a job in the cannabis industry, you owe that job in part due to Steve and his work. If you’ve ever purchased marijuana legally or smoked a joint made by a legally licensed company, you have Steve Fox to thank for it. Steve may not have sought out the credit he so rightly deserved, so it incumbent on those of us left working on this issue to tell his story and carry on his legacy."
Read Kris's full tribute to Steve here
Enjoy Marijuana? Joe Biden Doesn’t Care About You
Kris Krane, Senior Contributor Forbes
Originally published Mar 26, 2021
Read Full Article Here
You can find recent and archived Forbes articles from Kris here
WATCH AND LISTEN
17
JUN Raising Cannabis Capital
Dan Humiston, host of the PodCONX-produced cannabis investing podcast Raising Cannabis Capital, and CIO Andrew Thut will be discussing all things 4Front and the rapid growth and investment boom of the cannabis industry.
See where to watch the podcast here
03
JUN Talking Hedge
Watch Andrew Thut's live interview with Josh Kincaid, Capital Markets analyst and Host of Talking Hedge.
Watch episode here
28
MAY Cannabinoid Connect
Andrew Thut sat down with host Kevin Carrillo, and discussed his background, the history of the company and touched on topics such as 4Front in its “2nd half story” in 2021, the evolution of capital markets for cannabis and the importance of low cost production, brands, and the sweet spot of the cannabis value chain.
Watch episode here
MIMadman
3 years ago
4Front Bets Big on California with Massive Cannabis Processing Facility
June 10, 2021 at 1:50 pm
Exclusive Interview with 4Front Ventures CEO Leo Gontmakher by Carrie Pallardy
4Front Ventures (CSE: FFNT) (OTCQX: FFNTF) has taken its low-cost model of production, developed in Washington, to multiple states and continues to look for ways to expand. CEO Leo Gontmakher spoke with New Cannabis Ventures about the company’s footprint across the United States, its plans for the California market and how the company is positioning itself to be a long-term winner in the cannabis industry. The audio of the entire conversation is available at the end of this written summary.
The Big Five at 4Front
Gontmakher refers to the core leadership team at 4Front as “the big five.” He started his career working with his father’s seafood business, gaining experience in production management, accounting, sales, branding and logistics. He also has startup experience; Gontmakher always knew he would want to be involved in the cannabis industry when legalization began.
The other four members of the core leadership team include President Karl Chowscano, COO Joe Feltham, EVP of Finance Jake Wooten and CIO Andrew Thut.
4Front emphasizes the importance of culture, from its leadership team to the people working at the facility level, according to Gontmakher.
Washington
Washington does not allow out-of-state companies to own cannabis licenses. 4Front is involved in the market as a real estate owner. The company’s tenant, producer and processor Northwest Cannabis Solutions, has become the largest edibles player in the state and the second largest in flower, according to Gontmakher.
As a landlord, 4Front provides branding, SOPs and IP contracts to its tenant. Over the years of being in that challenging cannabis market, the company has honed its low-cost production strategy. Now, all of its facilities yield 400 grams per square foot per year or higher, according to Gontmakher.
Beyond cultivation, the company focuses on automation and packaging to help keep its cost of production low. 4Front has a centralized purchasing team that buys all non-cannabis inventory across its footprint to help push the price down, according to Gontmakher.
While this low-cost model has helped 4Front grow in other markets, the future of Washington remains uncertain. There is a push to allow out-of-state ownership in the state, but it has yet to come to fruition. As a result, the company is not currently looking at M&A in the state. Instead, it continues its strong tenant relationship.
Expanding Footprint
4Front is vertically integrated in Massachusetts and Illinois. It has three retail locations in Massachusetts and two in Illinois. Additionally, the company is building out phase one of a 90,000-square-foot grow and an 80,000-square-foot processing facility in Illinois. The company has also been in conversation with social equity partners in Illinois, looking for ways to honor its advocacy roots, according to Gontmakher.
The company also has a standalone retail store in Michigan.
California Plans
4Front sees California as a key market for long-term, large-scale success. It plans to open a 170,000-square-foot manufacturing facility in the state later this month. Given how much biomass is available in the state, the company opted to focus solely on manufacturing. The new facility has 10 times the production capacity of the company’s tenant in Washington, utilizing approximately a third of the people, according to Gontmakher. The facility is the next step in the company’s push for automation and low-cost production.
The company will be bringing 10 of its top brands to the California market. It already has a distribution license as a part of the facility, and it has chosen Nabis as its distribution partner.
Growth Strategy
4Front is approaching growth with an open mind. It has an application pending in New Jersey. It is considering the possibility of expanding its footprint in Michigan and going fully vertical. The Florida market is also of interest.
The current licensed portfolio offers 4Front plenty of opportunities, but it is open to the right kind of M&A. The company would be interested in deals that come with a good team and neutral or positive cash flow. 4Front would be open to deals that would take it into new markets or allow it to expand in its current markets.
Since its inception, the company has focused on low-cost operations. Whenever federal legalization comes to pass, Gontmakher anticipates that more competition will enter the market and prices will plummet. As the company continues to focus on lowering prices, increasing efficiency and ramping up scale, it is positioning itself to be a winner in that landscape, according to Gontmakher.
Fundraising Flexibility
The company is funded for all of its projects in 2021 and going into 2022, according to Gontmakher, and is cash flow positive. 4Front will continue to grow organically unless the right kind of M&A comes along.
If the company does decide to pursue a deal and more fundraising, it has options. Over the course of its history, 4Front has done equity deals, convertible debt and sale-leasebacks. It is still approximately 60 percent insider-held, and Gontmakher is confident in the company’s ability to raise capital.
Growth Drivers
The opening of the company’s second Illinois store late last year, the opening of its third store in Massachusetts this year and the soon-to-be-online manufacturing facility in California are key growth drivers in 2021.
Efficiency remains a vital theme for 4Front. The company monitors its cultivation and production metrics, looking for ways to drive more automation and innovation for new products. The company also carefully monitors its employee culture to ensure its people are engaged and helping to drive success.
That team factor will remain important as the company works to launch its California facility and move forward with its large construction project in Illinois.
MADMAFundraising Flexibility
The company is funded for all of its projects in 2021 and going into 2022, according to Gontmakher, and is cash flow positive. 4Front will continue to grow organically unless the right kind of M&A comes along.
If the company does decide to pursue a deal and more fundraising, it has options. Over the course of its history, 4Front has done equity deals, convertible debt and sale-leasebacks. It is still approximately 60 percent insider-held, and Gontmakher is confident in the company’s ability to raise capital.
Growth Drivers
The opening of the company’s second Illinois store late last year, the opening of its third store in Massachusetts this year and the soon-to-be-online manufacturing facility in California are key growth drivers in 2021.
Efficiency remains a vital theme for 4Front. The company monitors its cultivation and production metrics, looking for ways to drive more automation and innovation for new products. The company also carefully monitors its employee culture to ensure its people are engaged and helping to drive success.
That team factor will remain important as the company works to launch its California facility and move forward with its large construction project in Illinois.
MADLONG2029
JohnCM
3 years ago
4Front Ventures Reports First Quarter 2021 Financial Results and Provides Business Update
Canada NewsWire
PHOENIX, Ariz., May 24, 2021
Q1 2021 Systemwide Pro Forma Revenue of $31.4 million, an increase of 26% over Q4 2020
Q1 2021 Adjusted EBITDA of $5.9 million, representing an Adjusted EBITDA Margin of 19%
Reiterated FY2021 guidance for Systemwide Pro Forma Revenue of $170-180 million and Adjusted EBITDA of $40-50 million
The Company's existing licensed projects at maturity represent a long-term revenue and EBITDA opportunity upwards of $650 million and $250 million, respectively
Conference call to be held today, May 24, 2021 at 5:00 p.m. ET
PHOENIX, Ariz., May 24, 2021 /CNW/ - 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) ("4Front" or the "Company"), a vertically integrated, multi-state cannabis operator and retailer, today announced its financial results for the first quarter ended March 31, 2021. All financial information is presented in U.S. dollars unless otherwise indicated.
First Quarter 2021 ("Q1 2021") Financial Results Highlights
Systemwide Pro Forma Revenue was $31.4 million
GAAP-reported revenue was $23.0 million
Adjusted EBITDA was $5.9 million
Operational Highlights
Strong performance in sales and product adoption across retail locations, exceeding all internal projections; positive momentum continues in Q2
California
Company's state-of-the-art 170,000 square foot production facility in Commerce, California is on track for planned Q2 2021 opening
Certificate of Occupancy anticipated in the next ten days
Signed distribution agreement with Nabis, a leading wholesale cannabis distributor to more than 750 stores in California
Massachusetts
The Company received its Certificate of Occupancy and approval to operate from the Town of Brookline for its third adult-use dispensary in Massachusetts
Grand opening in June 2021 pending final approval from the Cannabis Control Commission
Illinois
Secured land and funding for new cultivation and production facility in Illinois; groundbreaking scheduled to occur in Q3 2021
Management Commentary
"Our strategy of replicating low-cost production methods in new markets began to take shape and grow at scale in Massachusetts, Illinois and California in our first quarter, extending the momentum we created in 2020," said Leo Gontmakher, Chief Executive Officer of 4Front. "Utilizing the cultivation and production techniques developed for our facilities in Washington, we have increased the yields and quality of our products produced in both Illinois and Massachusetts, which has enabled us to supply our adult use dispensaries to meet the ever-increasing demand in those markets. As production increases, we plan to begin selling excess product into the wholesale market as well."
Mr. Gontmakher added, "Continued positive momentum following the initiation of adult use sales in late 2020 in both Georgetown and Worcester, Massachusetts, along with an exceptionally strong launch of our Calumet City, Illinois dispensary in December, contributed to our robust sequential Q1 sales increases and exceeded all internal expectations. Looking ahead, with the completion and opening of our manufacturing facility in Commerce, California just a few weeks out, we expect to be in the market imminently with our suite of high-quality, branded products. As the largest legal cannabis market in the world, California offers a unique opportunity to build efficient operations and create incredible products that are replicable across our nationwide footprint."
Mr. Gontmakher concluded, "With revenue-generating operations now in California, Illinois, Massachusetts, Michigan, and Washington, we are poised to further scale the business according to our expansion strategy for 2021. We continue to track towards our stated financial guidance for the year, anticipating $170-$180 million in Pro Forma Systemwide Revenue and $40-$50 million in Adjusted EBITDA."
Business Updates and Developments
Systemwide pro forma revenue increased 26% to $31.4 million in Q1 2021, compared to $25.0 million in Q4 2020. Retail sales and product adoption exceeded internal expectations. This increase was primarily due to higher sales from the two Massachusetts dispensaries following the start of adult use sales in the second half of 2020, and a very strong launch from the Calumet City dispensary that opened in December 2020.
Q1 2021 Adjusted EBITDA was $5.9 million, steady with Q4 2020 representing an adjusted EBITDA margin of 19%. EBITDA margin in the quarter was negatively impacted by the ramp up of the Company's expanded grow facility in Illinois. While the tripling of the Company's Illinois cultivation facility's flowering canopy was completed on time and under budget, the first harvest from the expanded facility was not completed until April, leading to a one-time, higher than expected average cost per gram for manufactured products in Q1 2021. Through the first month of Q2, 4Front has more than tripled its Illinois harvest output and expects a meaningful rebound in margins in Q2.
The Company's fully-funded, state-of-the-art 170,000 square foot manufacturing facility in Commerce, California is nearing completion and remains on track to be ready to serve the California cannabis market beginning in Q2 2021. The Company's first suite of products will include edibles, tinctures, capsules and infused pre-rolls, including Marmas™, Pebbles™, Chewees™, Hi-Burst™, Verdure™ and Terp Stix™. The Company has signed a distribution agreement with Nabis, a leading distributor of cannabis products. Nabis distributes brands to more than 750 dispensaries in California, covering 99% of licensed retailers in the state.
Construction of the Company's third Massachusetts Mission Dispensary in Brookline is complete. The Company also announced that it has cleared all municipal processes with the City of Brookline including receiving its Certificate of Occupancy. Pending final approval from the Cannabis Control Commission, the grand opening is slated for June 2021.
In Illinois, the recently announced development of our new cultivation and production facility continues as scheduled with construction beginning in Q3 2021. The first phase, a 258,000 square foot building with 65,000 square feet of flowering canopy and approximately 70,000 square feet of manufacturing space is on track to break ground in Q3 2021.
Conference Call
The Company will host a conference call and webcast on Monday, May 24, 2021 at 5:00 p.m. ET to review its operational and financial results and provide an update on current business trends.
To join the call, dial 1-877-407-0792 toll free from the United States or Canada or 1-201-689-8263 if dialing from outside those countries. The webcast can be accessed at this link.
The call will be available for replay until Monday, May 31, 2021. To access the telephone replay, dial 1-844-512-2921 toll free from the United States and Canada, or 1-412-317-6671 if dialing from outside those countries, and use this replay pin number: 13719936.
About 4Front Ventures Corp.
4Front (CSE: FFNT) (OTCQX: FFNTF) is a national multi-state cannabis operator and retailer, with a market advantage in mass-produced, low-cost quality branded cannabis products. 4Front manufactures and distributes a portfolio of over 21 cannabis brands including Marmas, Crystal Clear, Funky Monkey, Pebbles, and the Pure Ratios wellness collection, distributed through retail outlets and their chain of strategically positioned Mission branded dispensaries. Headquartered in Phoenix, Arizona, 4Front has operations in Illinois, Massachusetts, California, Michigan, and Washington state. From plant genetics to the cannabis retail experience, 4Front's team applies expertise across the entire cannabis value chain. For more information, visit www.4frontventures.com.
Outstanding Shares
566,186,697
03/31/2021
Financial Statements
4FRONT VENTURES CORP.
Formerly 4Front Holdings, LLC
Consolidated Balance Sheets
As of March 31, 2021 and December 31, 2020
March 31,
2021
December 31,
2020
ASSETS
Current assets:
Cash
$
17,806
$
18,932
Accounts receivable
390
437
Other receivables
195
1,341
Current portion of lease receivables
3,495
3,450
Inventory
18,971
18,037
Current portion of notes receivable
292
264
Prepaid expenses
3,105
2,275
Total current assets
44,254
44,736
Property and equipment, net
39,542
33,618
Notes receivable and accrued interest
—
91
Lease receivables
7,486
7,595
Intangible assets, net
28,207
28,790
Goodwill
23,155
23,155
Right-of-use assets
61,593
62,466
Deposits
4,685
4,305
TOTAL ASSETS
$
208,922
$
204,756
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable
$
6,576
$
4,722
Accrued expenses and other current liabilities
8,213
6,427
Taxes payable
13,308
11,502
Derivative liability
8,339
5,807
Current portion of convertible notes
2,160
1,652
Current portion of lease liability
1,795
1,909
Current portion of contingent consideration payable
2,393
Current portion of notes payable and accrued interest
3,852
3,372
Total current liabilities
44,243
37,784
Convertible notes
11,466
14,722
Notes payable and accrued interest from related party
45,704
45,362
Long term notes payable
1,838
1,907
Long term accounts payable
1,600
1,600
Contingent consideration payable
3,212
3,103
Deferred tax liability
7,162
6,530
Lease liability
51,334
51,545
TOTAL LIABILITIES
166,559
162,553
SHAREHOLDERS' EQUITY (DEFICIENCY)
Equity attributable to 4Front Ventures Corp.
259,431
250,583
Additional paid-in capital
44,512
42,116
Deficit
(261,637)
(250,548)
Total 4Front Ventures Corp. shareholders' equity
42,306
42,151
Non-controlling interest
57
52
TOTAL SHAREHOLDERS' EQUITY
42,363
42,203
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
208,922
$
204,756
4FRONT VENTURES CORP.
Formerly 4Front Holdings, LLC
Consolidated Statements of Operations and Comprehensive Loss
For the Three Months Ended March 31, 2021 and March 31, 2020
Three Months Ended March 31,
2021
2020
REVENUE
Revenue from sale of goods
$
20,080
$
9,755
Real estate income
2,890
2,897
Total revenues
22,970
12,652
Cost of goods sold, sale of grown and manufactured products
(5,335)
(2,815)
Cost of goods sold, sale of purchased products
(3,790)
(1,834)
Gross profit
13,845
8,003
OPERATING EXPENSES
Selling and marketing expenses
5,157
6,816
General and administrative expenses
5,165
5,108
Equity based compensation
2,396
1,227
Depreciation and amortization
774
913
Accretion
—
(37)
Total operating expenses
13,492
14,027
Income (Loss) from operations
353
(6,024)
Other income (expense)
Interest income
3
56
Interest expense
(2,461)
(2,136)
Amortization of loan discount upon conversion of debt to equity
(2,915)
—
Change in fair value of derivative liability
(2,532)
—
Loss on lease termination
(879)
—
Total other income (expense)
(8,784)
(2,080)
Net loss before income taxes
(8,431)
(8,104)
Income tax expense
(2,653)
(550)
Net loss from continuing operations, net of taxes
(11,084)
(8,654)
Net income from discontinued operations, net of taxes
—
872
Net loss
(11,084)
(7,782)
Net loss attributable to non-controlling interest
5
12
Net loss attributable to shareholders
$
(11,089)
$
(7,794)
Basic and diluted loss per share
$
(0.02)
$
(0.01)
Weighted average number of shares outstanding, basic and diluted
558,997,571
531,521,620
Note Regarding Non-GAAP Measures, Reconciliation, and Discussion
In this press release, 4Front refers to certain non-GAAP financial measures such as Systemwide Pro Forma Revenue and Adjusted EBITDA. These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other issuers. 4Front defines Systemwide Pro Forma Revenue as total revenue plus revenue from entities with which the Company has a management contract, or effectively similar relationship (net of any management fee or effectively similar revenue) but does not consolidate the financial results of per U.S. GAAP ASC 810. 4Front considers this measure to be an appropriate indicator of the growth and scope of the business.
Adjusted EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and one-time charges related to acquisition, financing related costs and other non-recurring expenses. 4Front considers these measures to be an important indicator of the financial strength and performance of our business.
This news release was prepared by management of 4Front Ventures, which takes full responsibility for its contents. The Canadian Securities Exchange ("CSE") has not reviewed and does not accept responsibility for the adequacy of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States.
Systemwide Pro Forma Revenue Reconciliation
Revenue (GAAP)
$22,970
Less: Real Estate Income
2,890
Plus: Systemwide Revenue Adjustment
11,322
Systemwide Pro Forma Revenue (non-GAAP)
$31,402
JohnCM
3 years ago
4Front Announces Fourth Quarter and Fiscal Year 2020 Results and Provides Business Update
Tue, April 6, 2021
Q4 Systemwide Pro Forma Revenue increased to $25.0 million, with full year 2020 Systemwide Pro Forma sales of $88.1 million
Q4 Adjusted EBITDA increased 59% sequentially to $5.9 million, representing Adjusted EBITDA margin of 24%
Reiterated FY2021 guidance for Systemwide Pro Forma Revenue of $170-180 million and Adjusted EBITDA of $40-50 million
The Company's existing licensed projects at maturity represent a long-term revenue and EBITDA opportunity upwards of $650 million and $250 million, respectively
PHOENIX, April 6, 2021 /CNW/ - 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) ("4Front" or the "Company") today announced its financial results for the fourth quarter and fiscal year ended December 31, 2020. All financial information is presented in U.S. dollars unless otherwise indicated.
Fourth Quarter 2020 ("Q4 2020") Financial Results Highlights
Systemwide Pro Forma Revenue was $25.0 million
GAAP-reported revenue was $17.0 million
Adjusted EBITDA was $5.9 million
Fiscal Year 2020 ("FY 2020") Financial Results Highlights
Systemwide Pro Forma Revenue was $88.1 million
GAAP-reported revenue was $57.6 million, a 203% increase compared to the prior year
Adjusted EBITDA was $5.9 million
Operational Highlights
Opened second Illinois Mission Dispensary in Calumet City, and recently announced 2021 expansion plans in Illinois which includes the build out of an up to 558,000 square foot cultivation and production facility
Completed expansion and retrofit of cultivation and production facility in Georgetown, MA and Elk Grove Village, IL. Continued construction on state-of-the-art 185,000 square foot production facility in Commerce, California, fully funded and on track for Q2 2021 opening
Third Massachusetts dispensary in Brookline on track for Q2 2021 opening
Completed sale leaseback transaction with Innovative Industrial Properties; ended year with $18.9 million of cash and $47.3 million in long-term debt due in May 2024
Management Commentary
"4Front's strong fiscal 2020 performance is validation that our core strategy of replicating low-cost production methods, developed and refined within our Washington facilities, combined with our steadfast focus on execution is working," said Leo Gontmakher, Chief Executive Officer of 4Front. "We ended 2020 with tremendous business momentum that we have carried into the new year, as we scaled and replicated our operations across the growing adult-use markets of Massachusetts, Illinois and California."
Mr. Gontmakher added, "Our strong performance was driven by growing consumer demand for our quality manufactured products introduced in Massachusetts over the last year, the continued strength of the Illinois market, and a solid quarter out of our Washington facilities. We also completed the construction of our second Illinois dispensary in Calumet City, which opened in December, plus our cultivation/manufacturing facilities in Illinois and Massachusetts which we successfully transitioned into the 'Washington Way' with cultivation yields now meeting or exceeding those from our Washington facilities."
Mr. Gontmakher concluded, "We are well positioned to further scale the business and execute on our expansion strategy in 2021. This includes significantly expanding our cultivation and manufacturing footprint in Illinois and entering the $3 billion California market. Further bolstering our financial position is the fact that we are now generating positive operating cash flow, in line with our stated goals from the start of the year. Given the strength of our operations, I am pleased to reiterate our 2021 guidance of $170-$180 million in Pro Forma Systemwide Revenue and $40-$50 million in Adjusted EBITDA, with the longer-term view to generate $650 million in revenue and $250 million in EBITDA based on our current licensed footprint."
Business Updates and Developments
Q4 2020 Systemwide Pro Forma Revenue increased 12% quarter-over-quarter to $25.0 million. This growth was driven by continued robust activity across the Company's portfolio of operating assets, led by the first full quarter of recreational sales in Massachusetts and the opening of 4Front's second Illinois retail location in Calumet City.
Q4 Adjusted EBITDA increased 59% quarter-over-quarter to $5.9 million representing adjusted EBITDA margin of 24%. The Company continued to demonstrate considerable operating leverage in the fourth quarter, exceeding internal expectations, after initially achieving profitability during the third quarter of 2020. Through the combination of 4Front's low-cost production model, tight expense controls, and accelerating revenues the Company is well positioned to extend its profitability as it scales up its operating footprint. The Company achieved positive operating cash flow of $3.2 million in Q4 2020 and remains poised to show significant operating leverage in 2021.
In Q4 2020 4Front opened its second Illinois Mission Dispensary in Calumet City, and recently announced additional 2021 expansion plans in Illinois. The expansion plan includes the build out of an up to 558,000 square foot cultivation and production facility (the "Facility"), which the Company recently secured financing to build. Subsequent to the year end, the Company entered into definitive agreements with both the landowner and an affiliate of Innovative Industrial Properties, Inc., to acquire the land for $6.5 million and fund the approximately $45 million buildout of phase one of the Facility. The first phase constitutes 258,000 square feet of building comprising 65,000 square feet of flowering canopy with approximately 70,000 square feet of manufacturing space and is expected to be operational in the fourth quarter of 2022.
The Company's fully-funded, state-of-the-art 185,000 square foot manufacturing only facility in Commerce, California is nearing completion and is expected to be ready to serve the California cannabis market in Q2 2021. The Company is planning to launch its first full line of edibles, tinctures and vape products on California retail shelves starting in May 2021.
Construction remains on schedule at the Company's third Massachusetts dispensary in Brookline. Final inspection by the Cannabis Control Commission anticipated to occur in June 2021 and the Company remains confident that it will open the Brookline dispensary in Q2 2021.
2021 Outlook
Based on the continued strength of the Company's operations and robust consumer demand, 4Front reiterates its previously announced FY 2021 guidance and anticipates Systemwide Pro Forma Revenue of $170-180 million and Adjusted EBITDA of $40-50 million. This guidance is fully funded and contemplates only current operations plus the opening of the Brookline, Massachusetts dispensary and the Commerce production facility in Q2 of 2021. If such openings are delayed due to Covid-19, guidance could be negatively affected.
(Please see Note Regarding Non-GAAP Measures, Reconciliation, and Discussion below.) (*Please see the Financial Statement section below, and the Company's Fourth Quarter 2020 Condensed Consolidated Financial Statements and Management Discussion and Analysis ("MD&A"), available under the Company's EDGAR profile)
Additional Details
As of the date of the MD&A, there were the equivalent of 566,186,697 Class A Subordinate Voting Shares outstanding when calculated as if all share classes were converted to Subordinate Voting Shares. For further details regarding 4Front's share structure, please see its profile at www.thecse.com.
Conference Call
The Company will also host a conference call and webcast on Tuesday, April 6, 2021 at 5:00 p.m. ET to review its operational and financial results and provide an update on current business trends.
To join the call, dial 1-877-407-0792 toll free from the United States or Canada or 1-201-689-8263 if dialing from outside those countries. The webcast can be accessed at this link.
The call will be available for replay until Tuesday April 13, 2021. To access the telephone replay, dial 1-844-512-2921 toll free from the United States and Canada, or 1-412-317-6671 if dialing from outside those countries, and use this replay pin number: 13717894.
About 4Front Ventures Corp.
4Front (CSE: FFNT) (OTCQX: FFNTF) is a national multi-state cannabis operator and retailer, with a market advantage in mass-produced, low-cost quality branded cannabis products. 4Front manufactures and distributes a portfolio of over 25 cannabis brands including Marmas, Crystal Clear, Funky Monkey, Pebbles, and the Pure Ratios wellness collection, distributed through retail outlets and their chain of strategically positioned Mission branded dispensaries.
Headquartered in Phoenix, Arizona, 4Front has operations in Illinois, Massachusetts, California, Michigan, and Washington state. From plant genetics to the cannabis retail experience, 4Front's team applies expertise across the entire cannabis value chain. For more information, visit 4Front's website www.4frontventures.com.
Alwaysbmikki
3 years ago
4Front Ventures Secures Land and Funding for Massive New Cultivation and Production Facility in Illinois
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Mon, March 15, 2021, 11:08 PM
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PHOENIX, March 15, 2021 /CNW/ - 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) ("4Front" or the "Company") announced today that it has entered into definitive agreements with both the land owner and an affiliate of Innovative Industrial Properties, Inc., ("IIPR") to build an up to 558,000 square foot cultivation and production facility in Illinois. This would mark the largest such facility in the state to date. In summary, the agreements provide for IIPR to acquire the land for $6.5m and fund the approximately $45m buildout of phase one of the facility which will be leased back to 4Front in the form of a 20-year lease with two five-year extensions at the Company's option. Closing of the transaction is subject to securing appropriate county and state incentives, completion of standard due diligence, and other customary closing conditions.
4Front continues to penetrate in key adult-use markets with its proven portfolio of high-quality, affordable products. While the Company has already experienced significant success in Illinois through their Mission-branded dispensaries and existing cultivation-only facility, it is excited with the scope and scale of this new facility which will enable it to now introduce its full array of products into the market and catapult it to a top player in the State.
"Our thesis is simple." noted 4Front CEO Leo Gontmakher, "Bring tried-and-true cultivation and manufacturing methods from Washington State to large adult-use markets like Massachusetts, Illinois and California. Washington State was and is a highly competitive battleground in which our facilities, over a six year period, honed processes to achieve significant efficiencies and cost savings across a wide array of products. It is over this period that our facilities were forced to learn how to make high quality product at below industry cost, enabling significant profitability despite plummeting wholesale prices. Over the last 18 months, we have had significant success transitioning our three cultivation/manufacturing facilities in Illinois and Massachusetts into the 'Washington Way'." Gontmakher continued, "Cultivation yields now meet or exceed those from our Washington facilities (greater than 370 grams/square foot and as high as 500 grams/square foot in Worcester) and our manufactured products have retained a similar cost structure to that of Washington. We are also thrilled with the demand for our high-quality, affordable manufactured products introduced in Massachusetts over the last year. We are incredibly excited and ready to compete at a larger scale in Illinois."
The first phase of the buildout will constitute 258,000 square feet of building, comprising 65,000 square feet of flowering canopy and approximately 70,000 square feet of manufacturing space for the development of 4Front's branded flower, edibles, tinctures, concentrates and other manufactured products. Phase 1 is expected to be operational by Q4 2022.
The subsequent phase(s) of the buildout will add an additional 300,000 square feet of facility to meet market demand. 4Front plans to hire more than 240 employees to its cultivation and production teams during Phase 1.
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About 4Front Ventures Corp.
4Front (CSE: FFNT) (OTCQX: FFNTF) is a national multi-state cannabis operator and retailer, with a market advantage in mass-produced, low-cost quality branded cannabis products. 4Front manufactures and distributes a portfolio of over 25 cannabis brands including Marmas, Crystal Clear, Funky Monkey, Pebbles, and the Pure Ratios wellness collection, distributed through retail outlets and their chain of strategically positioned Mission branded dispensaries.
Headquartered in Phoenix, Arizona, 4Front has operations in Illinois, Massachusetts, California, Michigan, and Washington state. From plant genetics to the cannabis retail experience, 4Front's team applies expertise across the entire cannabis value chain. For more information, visit 4Front's website www.4frontventures.com.
This news release was prepared by management of 4Front Ventures, which takes full responsibility for its contents. The Canadian Securities Exchange ("CSE") has not reviewed and does not accept responsibility for the adequacy of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in 4Front Ventures' periodic filings with securities regulators. When used in this news release, words such as "will, could, plan, estimate, expect, intend, may, potential, believe, should," and similar expressions, are forward-looking statements.
Forward-looking statements may include, without limitation, statements related to future developments and the business and operations of 4Front Ventures, statements regarding when transactions will close or if/when required approvals are attained or conditions to closing are satisfied, the timing of buildout and hiring of new employees, the introduction of product into markets, market conditions, the Company's market share and demand for its products, the Company's ability to enter into and be successful in other markets, and other statements regarding future developments of the business.
Although 4Front Ventures has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals and satisfaction of conditions to closing; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under U.S. federal laws; change in laws; limited operating history; reliance on management; requirements for additional financing including in connection with subsequent phases of the buildout, the availability of employees, market acceptance of and demand for the Company's products, the impact of COVID-19 on the proposed buildout and the Company's operations; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. 4Front Ventures disclaims any intention or obligation to update or revise such information, except as required by applicable law, and 4Front Ventures does not assume any liability for disclosure relating to any other company mentioned herein.
SOURCE 4Front Ventures Corp.
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