Green Growth Brands
(NASDAQOTH: GGBXF) hasn't had a great year so far. Its
stock is down 12% year to date. The U.S.-based company also
failed in its attempt to
acquire Canadian cannabis producer Aphria
(NYSE: APHA) earlier this year.
But Green Growth Brands had an opportunity to
provide investors with some good news for a change with its
first-quarter update after the market closed on Wednesday. Here are
the highlights from the company's Q1 update.
Image source: Getty Images.
Green Growth Brands (GGB) reported first-quarter
revenue of $5.5 million. That was an increase of 77% from the
company's revenue in the previous quarter of $3.14
The company reported a GAAP net loss of $15.1
million, or $0.07 per share. This reflected deterioration from the
prior-quarter loss of $12.83 million, or $0.08 per share.
GGB reported cash, cash equivalents, and
short-term investments for the period ending March 31, 2019, of
$33.6 million. This total was higher than the company's cash
stockpile in the prior quarter of $31.5 million.
Green Growth Brands makes its money in two ways.
The company sells cannabis products and cannabidiol (CBD)
GGB's direct-to-consumer cannabis business
generates most of its revenue, with Q1 sales of $4.4 million.
Wholesale cannabis revenue in the quarter totaled $688,590. In
addition, the company made $462,117 from sales of CBD products in
The company isn't anywhere close to profitability
yet. GGB's total operating expenses in Q1 topped $17 million.
Roughly half of that amount was spent on general and administrative
functions. The company also incurred substantial legal and
professional fees of nearly $6.2 million.
Other key developments for GGB during the first
Investors can probably expect aggressive
expansion efforts by Green Growth Brands in the future. The company
will likely move ahead quickly with launches of new CBD retail
stores throughout the U.S.
GGB will also almost certainly closely watch the
progress of the U.S. Food and Drug Administration (FDA) in
establishing regulations for CBD products. The FDA is set to hold a
public hearing as an initial step in defining those regulations on
May 31. While it will take a while for the regs to be finalized,
Green Growth Brands could benefit over the long run from clarity
regarding the legal status of CBD products.
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Keith Speights has no
position in any of the stocks mentioned. The Motley Fool has no
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