Goodness Growth Holdings Poised for New York Market Exit Amid Financial Turnaround

NEW YORK— Goodness Growth Holdings Inc, a cannabis company, is navigating a challenging financial landscape with a firm goal to exit the New York market by the end of the year. The Minnesota-based multistate operator, known for its commitment to safety, quality, and customer value, revealed a mix of progress and challenges in its latest financial report for the third quarter ended September 30, 2023.

Despite reporting a net loss of $5.2 million in the third quarter, down from $8.4 million in the same period last year, the company has shown a marked improvement in its financial health. Its cumulative loss for 2023 stands at $20.9 million, a notable decrease from the $29.1 million lost in the first nine months of 2022.

Goodness Growth’s revenue tells a brighter story, with a 44% year-over-year increase, reaching $24.7 million, largely credited to the July initiation of Maryland’s recreational cannabis market. The company’s yearly revenue hit $64 million, a 15% increase from the previous year’s $55.6 million.

The company’s performance varied across its core markets, with a remarkable 229% year-over-year same-store sales growth in Maryland. However, it experienced modest growth in Minnesota (15%) and a decline in New York (14%).

Interim CEO Josh Rosen highlighted the significance of the third quarter results, attributing them to operational improvements and the regulatory changes in Maryland. “De-risking our balance sheet remains a critical focus,” Rosen stated, acknowledging delays in finalizing the New York market exit but expressing optimism about concluding the process within the year.

The company’s New York exit strategy is a key part of its financial restructuring. In October, Goodness Growth amended a lease for its New York cultivation facility, facilitating a smoother transition out of the state. The amendment involves $14 million in tenant improvements and a new base rent agreement.

Additionally, Goodness Growth is expanding its footprint in Maryland. It recently secured consulting contracts with two dispensaries, which will be rebranded to Green Goods, one of its brands. These contracts provide an option for future acquisition, contingent on legal permissions.

As of September end, the company reported $135.1 million in total assets, including $13.3 million in cash, against $165.4 million in total liabilities.

Goodness Growth’s strategic decisions, particularly in Maryland and New York, reflect its agility in adapting to the dynamic cannabis market. As it progresses towards streamlining its operations and financials, the industry watches closely to see how these changes will influence its position in the competitive cannabis landscape.