StateHouse Reports Fourth Quarter and Year-End 2022 Financial Results

FY 2022 revenue increased 80% to $108.2 million with a 62% improvement in annual gross profit to $42.1 million

Expects to achieve positive EBTIDA in 2023 and maintains focus to become cash flow positive before the end of 2023

SAN DIEGO and TORONTO, May 05, 2023 (GLOBE NEWSWIRE) -- StateHouse Holdings Inc. (“StateHouse” or the “Company”) (CSE: STHZ) (OTCQX: STHZF), a California-focused, vertically integrated cannabis enterprise, today announced its financial results for the three- and twelve-month periods ended December 31, 2022 (“Q4 2022” and “FY 2022”, respectively), and provided additional business updates. The consolidated financial statements for Q4 2022 and FY 2022, as well as the corresponding management’s discussion and analysis are available for download from the Company’s investor website, statehouseholdings.com, and on the Company’s SEDAR profile. Unless otherwise indicated, all dollar amounts in this press release are denominated in U.S. currency.

Management Commentary

“2022 was a foundational year for StateHouse, as we came together to realize our full combined potential as a unified business and a leading California-focused cannabis company,” said Ed Schmults, Chief Executive Officer of StateHouse. “The substantial integration work we have completed in this past year has strongly positioned us to execute on the considerable opportunities ahead in California. This market presents unique challenges that we are successfully navigating, thanks to our fully integrated supply chain and ability to leverage our industry leading scale to accelerate our growth initiatives.”

“We anticipate realizing additional synergies throughout 2023 to further reduce costs, optimize operations, and improve profitability to deliver long-term value for our shareholders. With these initiatives underway we are on track to deliver on our target of positive EBITDA⁽¹⁾⁽³⁾ in 2023 and to generate positive cash flow before the end of the year⁽³⁾.”

“It was a year of progress for us, and I want to sincerely thank our amazing team. They completed a significant amount of integration work in short order to get us where we are. I expect our efforts to continue to drive improvements in our business over the next year as we strive to become the leading operator in California.”

Q4 2022 & FY 2022 Highlights

• Total net revenues were $108.2 million for FY 2022, an increase of 79.4% compared with $60.3 million in FY 2021. Total net revenues for Q4 2022 increased 68.8% to $25.5 million, compared with $15.1 million in Q4 2021.
• Gross profit before adjustments for biological assets for FY 2022, increased 61.3% to $42.1 million compared to $26.1 million in gross profit for FY 2021. Gross profit before adjustments for biological assets for Q4 2022, increased 124% to $10.8 million, compared with $4.8 million in Q4 2021.
• Consolidated gross margins were 39.3% of revenues for FY 2022 and 42.4% for Q4 2022, compared to 37.1% of revenues in FY 2021 and 32.1% for Q4 2021.
• Retail revenues were $63.0 million, representing 58.1% of total sales for FY 2022, an increase of $24.3 million compared to FY 2021. 
• FY 2022 cultivation yields in the Company’s Salinas facility were up 101.0% over FY 2021 due to improved practices.
• Strengthened the senior management team with the appointments of Kavi Bhai, as Chief Financial Officer, Shawn Shevlin as VP of Operations and Megan Gordon as VP of Wholesale Sales, to the team.
• Entered a strategic partnership with one of California’s largest cannabis distributors, under which the Company is outsourcing all its distribution. The partnership is expected to result in significant cost savings⁽²⁾ for the Company, through lower headcount and reduction in costs related to insurance, fuel, truck leasing, banking fees, bad debts, and overtime pay.