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Goodness Growth Holdings Announces Second Quarter 2023 Results

– Q2 revenue of $19.2 million excluding discontinued operations increased 10.6% year-over-year –

– YTD results show meaningful progress with operational improvements –

– New Mexico divestiture, expanded presence in Maryland, and signed LOI for New York divestiture support focused strategy to drive performance –

MINNEAPOLIS, Aug. 14, 2023 (GLOBE NEWSWIRE) -- Goodness Growth Holdings, Inc. ("Goodness Growth" or the "Company") (CSE: GDNS; OTCQX: GDNSF), a cannabis company committed to providing safe access, quality products and great value to its customers, today reported financial results for its second quarter ended June 30, 2023. Key financial results are presented below in summary form with supporting commentary and discussion from management of certain key operating metrics which the Company uses to judge its performance. All currency figures referenced herein are denominated in U.S. dollars.

Summary of Key Financial Metrics           
Three Months Ended Six Months Ended
US $ in millionsJune 30, June 30,
 2023 2022 Variance 2023 2022 Variance
GAAP Revenue$20.2 $21.1 -4.2% $39.3 $36.7 7.0%
Revenue (excluding discontinued operations)$19.2 $17.4 10.6% $37.3 $31.1 19.8%
GAAP Gross Profit$9.3 $10.4 -10.0% $18.9 $12.9 46.6%
Gross Profit Margin46.2% 49.2% -300 bps 48.0% 35.0% 1,300 bps
SG&A Expenses$8.1 $8.6 -6.6% $15.2 $17.9 -15.0%
SG&A Expenses (% of Sales)39.9% 40.9% -100 bps 38.7% 48.7% -1,000 bps
Operating Income (Loss)($1.0) $0.3 -438.1% ($0.7) ($7.5) NM
Operating Income Margin-5.2% 1.5% -660 bps -1.7% -20.3% 1,860 bps
EBITDA$2.8 $1.1 156.5% $4.3 ($9.6) NM
EBITDA Margin14.1% 5.3% 880 bps 10.9% (26.0%) 3,700 bps

Management Commentary

Interim Chief Executive Officer Josh Rosen commented, “We continued to make progress executing our balance sheet and operational improvement plan during the second quarter, with continued revenue growth in our core markets, particularly Minnesota and Maryland, and improvements in key performance indicators. With respect to our focus and de-risking our balance sheet, we completed the divestiture of our former New Mexico operations for an immaterial consideration during the second quarter, and are working on definitive documents after executing an LOI for the divestiture of our New York operations. When coupled with our recent announcement related to supporting two additional retail locations in Maryland, we believe we are on the cusp of meaningfully improved cash flow performance. We are optimistic that we’ll be able to share additional details regarding the divestiture process for our New York assets during the third quarter and look forward to sharing more visibility into our future profitability expectations once this process is complete.”

Amber Shimpa, President and CEO of Vireo Health of Minnesota commented, “We have been pleased with the initial performance of our two Green Goods® stores in Maryland following the commencement of adult-use sales on July 1. We’re also excited about our ability to improve our penetration in Maryland with the recent execution of consulting, licensing and wholesale agreements with two additional retail stores during the third quarter. In Minnesota, we remain focused on driving better product at better prices for Minnesota patients, and have been particularly pleased with the support we’ve received from our partnership with Grown Rogue in achieving these important goals. Summer months in Minnesota are our most challenging of the year given the temperatures and humidity in our greenhouse environment, but we have been encouraged by improved production as compared to the prior year despite these seasonal headwinds.”

Core Market KPIs1           
Three Months Ended Six Months Ended
US $ in millionsJune 30, June 30,
 2023 2022 Variance 2023 2022 Variance
Total Harvest Pounds (Biomass)9,856 7,854 25.5% 18,031 13,197 36.6%
   % "A" Flower220.9% 16.8% 410 bps 19.0% 15.9% 310 bps
Total Retail Revenue$16.2 $14.7 10.2% $31.7 $26.2 21.0%
Same Store Sales Growth- - 10.4% - - 21.0%
Number of Stores in SSS Calculation14 - - 14 - -
Total Wholesale Revenue$3.0 $2.7 11.1% $5.6 $4.9 14.3%
1 Core Markets refer to the Company's operations in Maryland, Minnesota, and New York.
2 "A Flower" refers to produced biomass that meet the Company's highest internal standards for flower quality, size, and appearance.

Other Events

On April 28, 2023, the Company closed on a U.S. $2.0 million tranche of a new convertible debt facility, which enables the Company to access up to U.S. $10.0 million in aggregate principal of convertible notes. Through today, the Company has drawn $5.0 million on this facility. The convertible loan has a term of three years and an annual interest rate of 12.0 percent, including 6.0 percent cash and 6.0 percent paid-in-kind. The initial tranche's principal amount of convertible notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into subordinate voting shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to U.S. $0.145. In connection with this financing, the Company issued 6,250,000 warrants to purchase subordinate voting shares of the Company to the lenders. The warrants have a term of five years with a strike price of U.S. $0.145.

On May 25, 2023, the Company entered into a strategic agreement with Grown Rogue International, Inc. whereby Grown Rogue will support Goodness Growth in the optimization of its cannabis flower products, with a particular focus on improving the quality and yield of top-grade “A” cannabis flower in Maryland and Minnesota. As part of this strategic agreement the Company is obligated to issue 10,000,000 warrants to purchase subordinate voting shares of Goodness Growth to Grown Rogue, with a strike price equal to a 25.0 percent premium to the 10-day volume weighted average price (“VWAP”) of Goodness Growth’s subordinate voting shares prior to the effective date of the agreement. Grown Rogue is also obligated to issue 8,500,000 warrants to purchase subordinate voting shares of Grown Rogue to Goodness Growth, with a strike price equal to a 25.0 percent premium to the 10-day VWAP of Grown Rogue’s subordinate voting shares prior to the effective date of the agreement. The warrants exchanged in the agreement will be issued with five-year terms to exercise.

On June 23, 2023, the Company divested all the assets and liabilities of Red Barn Growers, Inc., a New Mexico nonprofit organization effectively controlled by the Company’s subsidiary company, Vireo Health of New Mexico, LLC, to 37 Management Group, Inc., a New Mexico corporation.

On August 2, 2023, the Company announced that its Executive Chairman, Dr. Kyle Kingsley, voluntarily converted of all of his 65,411 Super Voting Shares and, in connection therewith, the Company issued to Dr. Kingsley 6,541,100 Subordinate Voting Shares of Goodness Growth’s capital stock. Dr. Kingsley originally acquired the Super Voting Shares in connection with the business combination of the Company completed on March 18, 2019. The voluntary conversion eliminated the Company’s previous class of Super Voting shares and was related to a recent financing undertaken by the Company.

On August 14, 2023, the Company announced that it has entered into consulting, licensing and wholesale agreements with two additional dispensaries in Maryland that are owned and controlled by HA-MD LLC and currently operate under the Ethos brand name. The agreements will result in the two Ethos dispensaries in Hampden and Rockville being, upon regulatory approval, rebranded to Green Goods® and include an option to acquire the two dispensaries if and when allowed by applicable law and regulations.

Balance Sheet and Liquidity

As of June 30, 2023, total current assets were $126.4 million, including cash on hand of $11.3 million. Total current liabilities were $157.0 million.

As of June 30, 2023, including the yet-to-be exchanged warrants in relation with the Company’s agreement with Grown Rogue International, Inc., and subordinate voting shares the Company has agreed to issue to lenders in connection with the fifth amendment to the Company’s credit facility, the Company had a total of 143,126,330 equity shares issued and outstanding on an as-converted basis, 223,608,947 shares outstanding on an as-converted, fully diluted basis, and 151,350,670 fully-diluted shares outstanding on the treasury method basis.

Conference Call and Webcast Information

Goodness Growth management will host a conference call with research analysts today, August 14, 2023, at 5:00 p.m. ET (4:00 p.m. CT) to discuss its financial results for its second quarter ended June 30, 2023. Interested parties may attend the conference call by dialing 1-888-414-4585 (Toll-Free) (US and Canada) or 1-646-960-0331 (Toll) (International) and referencing conference ID number 8663261.

A live audio webcast of this event will also be available in the Events & Presentations section of the Company’s Investor Relations website and via the following link:

About Goodness Growth Holdings, Inc.

Goodness Growth Holdings, Inc. is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. The Company is evolving with the industry and is in the midst of a transformation to being significantly more customer-centric across its operations, which include cultivation, manufacturing, wholesale and retail business lines. Today, the Company is licensed to grow, process, and/or distribute cannabis in four markets and operates 14 dispensaries in three states. For more information about Goodness Growth Holdings, please visit

Additional Information

Additional information relating to the Company’s second quarter 2023 results will be available on EDGAR and SEDAR later today. Goodness Growth refers to certain non-GAAP financial measures such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in circumstances in which the Company believes that doing so provides additional perspective and insights when analyzing the core operating performance of the business. These measures do not have any standardized meaning and may not be comparable to similar measures presented by other issuers. Please see the Supplemental Information and Reconciliation of Non-GAAP Financial Measures at the end of this news release for more detailed information regarding non-GAAP financial measures.

Contact Information

Investor Inquiries:Media Inquiries:
Sam GibbonsAmanda Hutcheson
Chief of Staff, VP Investor RelationsSenior Manager, Communications
(612) 314-8995(919) 815-1476

Forward-Looking Statement Disclosure

This press release contains “forward-looking information” within the meaning of applicable United States and Canadian securities legislation. To the extent any forward-looking information in this press release constitutes “financial outlooks” within the meaning of applicable United States or Canadian securities laws, this information is being provided as preliminary financial results; the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Forward-looking information contained in this press release may be identified by the use of words such as “should,” “believe,” “estimate,” “would,” “looking forward,” “may,” “continue,” “expect,” “expected,” “will,” “likely,” “subject to,” “transformation,” and “pending,” variations of such words and phrases, or any statements or clauses containing verbs in any future tense. These statements should not be read as guarantees of future performance or results. Forward-looking information includes both known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company or its subsidiaries to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements or information contained in this press release. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein and in our Annual Report on Form 10-K filed with the Securities Exchange Commission. Our actual financial position and results of operations may differ materially from management’s current expectations and, as a result, our revenue, EBITDA, and cash on hand may differ materially from the values provided in this press release. Forward-looking information is based upon a number of estimates and assumptions of management, believed but not certain to be reasonable, in light of management’s experience and perception of trends, current conditions, and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, the reader should not place undue reliance on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to: risks related to the timing and content of adult-use legislation in markets where the Company currently operates; current and future market conditions, including the market price of the subordinate voting shares of the Company; risks related to epidemics and pandemics; federal, state, local, and foreign government laws, rules, and regulations, including federal and state laws and regulations in the United States relating to cannabis operations in the United States and any changes to such laws or regulations; operational, regulatory and other risks; execution of business strategy; management of growth; difficulties inherent in forecasting future events; conflicts of interest; risks inherent in an agricultural business; risks inherent in a manufacturing business; liquidity and the ability of the Company to raise additional financing to continue as a going concern; the Company’s ability to meet the demand for flower in Minnesota; risk of failure in the lawsuit with Verano and the cost of that litigation; our ability to dispose of our assets held for sale at an acceptable price or at all; and risk factors set out in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, which is available on EDGAR with the U.S. Securities and Exchange Commission and filed with the Canadian securities regulators and available under the Company's profile on SEDAR at

The statements in this press release are made as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements or forward-looking information to reflect events or circumstances after the date of such statements.

Supplemental Information

The financial information reported in this news release is based on unaudited financial statements for the fiscal quarters ended June 30, 2023, and June 30, 2022. All financial information contained in this news release is qualified in its entirety with reference to such financial statements. To the extent that the financial information contained in this news release is inconsistent with the information contained in the Company’s audited financial statements, the financial information contained in this news release shall be deemed to be modified or superseded by the Company’s audited financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws.

(Amounts Expressed in United States Dollars, Unaudited and Condensed)

 June 30,      December 31,  
 2023  2022 
Current assets:       
Cash$11,346,063  $15,149,333 
Accounts receivable, net of allowance for doubtful accounts of $349,575 and $453,860, respectively 4,946,269   4,286,072 
Inventory 19,783,582   20,508,023 
Prepayments and other current assets 1,910,514   2,544,532 
Warrants Receivable 1,248,224    
Assets Held for Sale 87,132,328   4,240,781 
Total current assets 126,366,980   46,728,741 
Property and equipment, net 24,279,582   89,606,932 
Operating lease, right-of-use asset 2,126,179   6,110,787 
Notes receivable, long-term 3,750,000   3,750,000 
Intangible assets, net 8,048,913   8,776,946 
Goodwill    183,836 
Deposits 383,645   2,312,161 
Deferred tax assets 995,000   1,687,000 
Total assets$165,950,299  $159,156,403 
Current liabilities       
Accounts Payable and Accrued liabilities$27,089,821  $14,928,780 
Long-Term debt, current portion 53,869,962   11,780,000 
Right of use liability 888,327   1,680,294 
Liabilities held for sale 75,146,975   1,319,847 
Total current liabilities 156,995,085   29,708,921 
Right-of-use liability 9,673,146   79,757,994 
Other long-term liabilities 215,237    
Convertible debt, net 3,093,196    
Long-Term debt 3,898,443   46,248,604 
Total liabilities$173,875,107  $155,715,519 
Stockholders’ equity       
Subordinate Voting Shares ($- par value, unlimited shares authorized; 86,721,030 shares issued and outstanding)     
Multiple Voting Shares ($- par value, unlimited shares authorized; 348,642 shares issued and outstanding)     
Super Voting Shares ($- par value; unlimited shares authorized; 65,411 shares issued and outstanding)     
Additional Paid in Capital 181,321,847   181,321,847 
Accumulated deficit (177,880,963)  (177,880,963)
Total stockholders' equity$3,440,884  $3,440,884 
Total liabilities and stockholders' equity$177,315,991  $159,156,403 

(Amounts Expressed in United States Dollars, Unaudited and Condensed)

 Three Months Ended   Six Months Ended 
 June 30,  June 30, 
 2023     2022  2023  2022 
Revenue$20,196,556  $21,090,148  $39,284,980  $36,728,720 
Cost of sales               
Product costs 10,275,584   10,663,251   19,853,795   20,346,228 
Inventory valuation adjustments 589,676   59,871   579,676   3,526,788 
Gross profit 9,331,296   10,367,026   18,851,509   12,855,704 
Operating expenses:               
Selling, general and administrative 8,059,427   8,625,439   15,216,262   17,903,408 
Stock-based compensation expenses 2,037,204   1,098,008   3,712,798   1,740,513 
Depreciation 117,681   163,127   277,191   319,224 
Amortization 159,028   172,267   318,794   344,533 
Total operating expenses 10,373,340   10,058,841   19,525,045   20,307,678 
Gain (loss) from operations (1,042,044)  308,185   (673,536)  (7,451,974)
Other income (expense):               
Impairment of long-lived assets    (54,739)     (5,367,915)
Gain (loss) on disposal of assets (2,747,881)     (2,747,881)  168,359 
Gain (loss) on sale of property and equipment    (10,930)     (10,930)
Interest expenses, net (7,744,794)  (5,297,823)  (14,879,584)  (9,899,622)
Other income (expenses) 5,798,335   (82,769)  5,820,648   1,117,224 
Other income (expenses), net (4,694,340)  (5,446,261)  (11,806,817)  (13,992,884)
Loss before income taxes (5,736,384)  (5,138,076)  (12,480,353)  (21,444,858)
Current income tax expenses (1,652,871)  (965,000)  (3,377,871)  (2,340,000)
Deferred income tax recoveries 60,000   (80,000)  123,000   3,035,000 
Net loss and comprehensive loss (7,329,255)  (6,183,076)  (15,735,224)  (20,749,858)
Net loss per share - basic and diluted$(0.06) $(0.05) $(0.12) $(0.16)
Weighted average shares used in computation of net loss per share - basic & diluted 128,126,330   128,111,328   128,126,330   128,111,328 

(Amounts Expressed in United States Dollars, Unaudited and Condensed)

 June 30, 
 2023     2022 
Net loss$(15,735,224) $(20,749,858)
Adjustments to reconcile net loss to net cash used in operating activities:       
Inventory valuation adjustments 579,676   3,526,788 
Depreciation 277,191   319,224 
Depreciation capitalized into inventory 1,294,065   1,314,056 
Non-cash operating lease expense 327,692   558,083 
Amortization of intangible assets 318,794   344,533 
Stock-based payments 3,712,798   1,740,513 
Warrants receivable (1,248,224)   
Interest Expense 3,223,635   2,162,218 
Impairment of long-lived assets    5,367,915 
Deferred income tax (123,000)  (3,035,000)
Accretion 593,063   2,521,196 
Loss (gain) on sale of property and equipment    10,930 
Loss on disposal of Red Barn Growers 2,909,757    
Loss (gain) on disposal of assets (161,727)   
Gain on disposal of royalty asset    (168,359)
Change in operating assets and liabilities:       
Accounts Receivable (60,197)  (1,986,315)
Prepaid expenses 608,486   (1,031,442)
Inventory (1,737,376)  (1,612,556)
Accounts payable and accrued liabilities 3,150,425   870,373 
Change in assets and liabilities held for sale (91,247)   
Net cash used in operating activities$(2,161,413) $(9,847,701)
PP&E Additions$(2,478,645) $(3,917,948)
Proceeds from sale of Red Barn Growers net of cash 439,186    
Proceeds from sale of property, plant, and equipment 125,000   372,815 
Proceeds from sale of royalty asset    236,635 
Deposits (260,545)  (403,281)
Net cash provided by (used in) investing activities$(2,175,004) $(3,711,779)
Proceeds from long-term debt, net of issuance costs$  $16,355,643 
Proceeds from convertible debt, net of issuance costs 3,497,462    
Debt principal payments      
Lease principal payments (987,953)  (980,713)
Net cash provided by (used in) financing activities$533,147  $15,374,930 
Net change in cash$(3,803,270) $1,815,450 
Cash, beginning of period$15,149,333  $15,155,279 
Cash, end of period$11,346,063  $16,970,729 


 Three Months Ended          
 June 30,         
 2023  2022  $ Change  % Change  
MN$11,479,371  $9,928,201  $1,551,170  16 %
NY 2,279,635   2,792,734   (513,099) (18)%
NM 911,969   2,340,575   (1,428,606) (61)%
MD 2,472,124   1,979,982   492,142  25 %
Total Retail$    17,143,099  $    17,041,492  $          101,607                    1 %
AZ$  $1,344,620  $(1,344,620) (100)%
MD 1,837,145   1,565,835   271,310  17 %
NY 1,176,585   909,521   267,064  29 %
NM 39,727      39,727  100 %
MN    228,680   (228,680) (100)%
Total Wholesale$      3,053,457  $      4,048,656  $         (995,199)               (25)%
Total Revenue$    20,196,556  $    21,090,148  $         (893,592)                 (4)%
AZ and NM Revenue$(951,696) $(3,685,195) $2,733,499  (74)%
Total Revenue excluding AZ and NM$    19,244,860  $    17,404,953  $       1,839,907                  11 %


 Six Months Ended         
 June 30,         
 2023  2022  $ Change  % Change  
MN$22,198,288  $16,592,289  $5,605,999  34 %
NY 4,641,577   5,651,627   (1,010,050) (18)%
NM 1,964,285   3,263,928   (1,299,643) (40)%
MD 4,810,749   3,945,871   864,878  22 %
Total Retail$    33,614,899  $    29,453,715  $       4,161,184                  14 %
AZ$  $2,355,683  $(2,355,683) (100)%
MD 3,401,020   2,828,423   572,597  20 %
NY 2,229,334   1,418,759   810,575  57 %
NM 39,727      39,727  100 %
MN    672,140   (672,140) (100)%
Total Wholesale$      5,670,081  $      7,275,005  $      (1,604,924)               (22)%
Total Revenue$    39,284,980  $    36,728,720  $       2,556,260                    7 %
AZ and NM Revenue$(2,004,012) $(5,619,611) $3,615,599  (64)%
Total Revenue excluding AZ and NM$    37,280,968  $    31,109,109  $       6,171,859                  20 %

Reconciliation of Non-GAAP Financial Measures

Goodness Growth management occasionally elects to provide certain non-GAAP financial measures such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). EBITDA is a non-GAAP measure and does not have a standardized definition under GAAP. The following information provides reconciliations of the supplemental non-GAAP financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.

Reconciliation of Net Loss to EBITDA

 Three Months Ended   Six Months Ended 
 March 31,  June 30, 
 2023  2022  2023  2022 
Net income (loss)$(7,329,255) $(6,183,076)  (15,735,224)  (20,749,858)
Interest expense, net 7,744,794   5,297,823   14,879,584   9,899,622 
Income taxes 1,592,871   1,045,000   3,254,871   (695,000)
Depreciation & Amortization 276,709   335,394   595,985   663,757 
Depreciation included in cost of goods sold 559,978   613,863   1,294,065   1,314,056 
EBITDA (non-GAAP)$2,845,097  $1,109,004   4,289,281   (9,567,423)



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