IRVINE, Calif.,– Manifest 7 Holdings (CSE: MSVN; OTCMKTS: MNFSF), a Californian integrated omni channel platform for cannabis, today announced financial results for its fiscal first quarter ended February 28, 2021. First Quarter 2021 Fiscal Quarter Financial Highlights
- Generated consolidated revenue of $3.8 million during the first fiscal quarter, compared to $4.1 million for the same prior year period. This decrease was primarily attributable to a decline in revenue generated from ancillary product sales due to a disruption in one of the Company’s third-party e-commerce distribution channels that caused extended delays in the delivery time of products to customers and was partially corrected following the conclusion of the first fiscal quarter. During the first fiscal quarter, M7 also placed greater emphasis on generating revenue from regulated product sales, which increased slightly year-over-year and is expected to yield greater long-term revenue growth.
- Reported consolidated gross profit of $1.1 million during the fiscal first quarter, compared to $1.3 million for the same prior year period. The decrease in gross profit is directly attributable to the decline in revenue generated from ancillary product sales and a shift in product mix from ancillary to regulated products as described above, while gross profit generated by the Company’s regulated segment increased by 9% year-over-year.
- The Company’s gross profit margin remained relatively stable at 30% for the fiscal first quarter, compared to 31% for the same prior year period, while gross profit margin for the Company’s regulated segment increased slightly from 29% to 30% year-over-year. The Company expects gross profit as a percentage of revenue to fluctuate going forward as the Company continues to implement its business model and further refine its product mix.
- M7 continued to optimize its cost structure, resulting in operating expenses (excluding depreciation and amortization and share-based payment expense) of $3.5 million during the first fiscal quarter, a decrease of 28% from the same prior year period.
Operational Highlights and Key Updates to the Quarter
- The Company entered into distribution partnerships with some of the state’s leading finished goods brands—including Eel River Organics and Cream of the Crop—significantly expanding Highlanders Distribution’s brand portfolio across all key product categories.
- The Company opened its scaled, multi-use facility in Brisbane, which functions as M7’s centralized distribution and logistics hub serving the Northern California cannabis market and significantly expands Highlanders Distribution’s operational capabilities and logistical efficiency in the region.
- M7 expanded its distribution infrastructure by more than tripling the size of its vehicle fleet, augmenting Highlanders Distribution’s logistics capabilities and increasing its capacity to transport finished goods and bulk wholesale inventory across virtually all product categories at scale throughout California.
- Highlanders Distribution continued to grow its customer base, having served 259 licensees since the start of fiscal year 2020, with the number of licensees served in the first fiscal quarter increasing by 62% over the same prior year period.
- Weden’s retail customer base throughout California continued to expand, with the number of unique customers served by Weden increasing by 10% during the first fiscal quarter and more than doubling since the end of the same prior year period. Meanwhile, the average transaction size of Weden orders during the first fiscal quarter increased by nearly 14% over the same prior year period.
- M7 completed a non-brokered private placement in March 2021, resulting in the Company’s receipt of gross proceeds of approximately C$3,314,605.
Sturges Karban, M7’s Chief Executive Officer, commented, “M7 continues to focus on executing core strategic initiatives, including the development of Highlander’s wholesaling, distribution, and transportation capabilities and the optimization of our internal processes to enhance our seamless full-service distribution and retail operations. We are actively evaluating acquisitions and strategic partnerships that will drive shareholder value by focusing on top- and bottom-line growth. Our entry into 2021 demonstrated our single-minded focus on advancing each of these areas as our B2B and B2C cannabis superhighway continues to support increasing demands for efficient and reliable cannabis distribution and delivery in California.”
Karban added, “2021 and beyond presents an opportunity for M7 to capture even greater market share and as we recognize increased demand for seamless and compliant distribution and retail operations from both of our core business segments. We are strategically enhancing our infrastructure to support anticipated growth in regulated sales as California’s cannabis market continues to mature. As we capture more business opportunities through Weden’s suite of on-demand delivery services and build new portfolio partnerships through our Highlanders division, M7 will continue unlocking key potential as we build towards the world’s first cannabis superhighway.”
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs and assumptions regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. This forward-looking information is based on certain assumptions made by management and other factors used by management in developing such information. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include, regulatory actions, market prices, and continued availability of capital and financing, and general economic, market or business conditions. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in its entirety by this notice.
The Company’s securities referred to in this press release 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. Accordingly, the Company’s securities may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of any offer to buy any Company’s securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful.
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