IRVINE, Calif.– ManifestSeven Holdings Corp. (CSE: MSVN; OTCMKTS: MNFSF), an integrated omnichannel platform for legal cannabis, today announced financial results for its fiscal fourth quarter and year ended November 30, 2020. M7’s fiscal year 2020 financial results reflect the Company’s consistent organic growth during the first full fiscal year of integrated operations of its business-to-business and direct-to-consumer divisions—respectively, Highlanders Distribution and Weden—which seamlessly integrate the cannabis supply chain directly with end-users in major metropolitan markets throughout California.
All financial information in this press release is provided in U.S. dollars unless otherwise indicated.
Fourth Quarter and 2020 Fiscal Year Financial Highlights
- Record consolidated revenue of $17.7 million during fiscal year 2020, representing a 64% year-over-year increase, compared to $10.8 million during fiscal year 2019, and $4.0 million during the fiscal fourth quarter 2020.
- Consolidated gross profit of $5.5 million during fiscal year 2020, representing a 97% year-over-year increase, compared to $2.8 million during fiscal year 2019, and $1.3 million during the fiscal fourth quarter 2020.
- Consolidated gross margins increased from 26% during fiscal year 2019 to 31% during fiscal year 2020, and 32% during the fiscal fourth quarter 2020.
- The growth in M7’s operations was due to increased demand for the comprehensive suite of services offered by Highlanders Distribution, which served 248 licensees during the fiscal year 2020, which represents an 86% increase from 133 licensees served during the fiscal year 2019.
- The Company continued to rapidly expand its retail customer base throughout California, with the number of unique consumers served by Weden during fiscal year 2020 increasing by 118% year-over-year. Meanwhile, the average transaction size of Weden delivery orders increased by nearly 10% over the same time frame.
- M7 continued to optimize its cost structure, resulting in a year-over-year reduction in operating expenses (excluding depreciation and amortization and share-based payment expense) of 27% and 52% during fiscal year and fourth quarter 2020, respectively.
Key Updates Subsequent 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.
- The Company launched local on-demand delivery operations at its new Brisbane facility, providing Weden with comprehensive coverage of both sides of the San Francisco Bay Area and maximizing its footprint in Northern California’s largest and most populous market.
- M7 converted its Oakland facility into one of Northern California’s most robust delivery-only hubs, expanding Weden’s operational square footage in Oakland by over 1,000 percent and significantly broadening its geographic footprint in the San Francisco Bay Area market.
- M7 refinanced the secured promissory note related to the Weden dispensary in Santa Ana, California, extending the note’s maturity date to January 1, 2022, with the ability to extend the maturity date by an additional 12 months upon the satisfaction of certain conditions.
- 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, “Our financial results in 2020 are driven by the successful implementation of our business model throughout California, further positioning M7 as the first integrated business-to-business and direct-to-consumer cannabis superhighway in the state. By remaining focused on redefining the cannabis supply chain and the end-user experience, M7 has continued to change the landscape of cannabis distribution and retail in California and has emerged as an increasingly differentiated player in the rapidly developing U.S. cannabis industry.”
Karban added, “While 2020 presented itself to be an unparalleled year of challenges brought on by the COVID-19 pandemic, we remained committed to expanding our unique distribution and retail platform across California. Not only did M7 successfully navigate through an unprecedented operating environment during fiscal year 2020, but we also accomplished two integral components of our growth strategy. First, in laying the foundation of M7’s omnichannel platform, we augmented M7’s statewide distribution infrastructure by integrating it with a robust captive retail segment powered by 1-800-CANNABIS, taking a crucial step forward toward optimizing California’s dysfunctional and inefficient cannabis supply chain. Second, through the continued growth of our integrated operations in California, we have created a strategic stronghold in the center of the world’s largest legal cannabis market. Today, we are effectively serving 88% of California’s cannabis market with an opportunity to continue expanding our footprint throughout the state.”
Karban concluded, “As we look ahead into 2021 and beyond, we are keenly focused on executing on our organic growth strategy, while actively evaluating acquisitions and strategic partnerships that will drive shareholder value by focusing on top- and bottom-line growth.”
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.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
(This information is primarily sourced from ManifestSeven. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here)