Gold Flora Corp.’s merger with TPCO Holding Corp., which closed in July, served to boost financial results for the combined company (OTC: GRAMF) for the third quarter ended Sept. 30.
The new entity, which continues to operate as Gold Flora, reported total revenue of $32 million, up 95% year-over-year, with a gross profit of $11.3 million, or 35% of its revenue. Adjusted gross margin for the period swelled to 57% in the quarter, totaling $18.1 million in adjusted gross profit when accounting for specific operational expenses and inventory adjustments.
The company’s financials were buoyed by a $49 million non-cash gain from its business merger with TPCO, a key move that contributed to a net income of $23 million.
Still, the company reported an adjusted EBITDA loss of $1.7 million, a reflection of the costs associated with the merger and other integration expenses. However, the company called the loss an investment in the firm’s future.
The company also reported achieving annualized cost savings of $30 million during the quarter, exceeding its initial targets through an overhaul encompassing payroll, real estate optimization, and a shift to lean more vertical.
The launch of Stately Distribution, a new sales and distribution arm, marked another move to drive growth and manage third-party brand partnerships effectively. The company also expanded the cultivation capacity of its Desert Hot Springs Campus by an additional 40,000 square feet and launched the CURRENT flower brand.
“While our peers may struggle with the considerable challenges that (the California) market presents, we view these as unique opportunities to establish an efficient operator that can thrive and succeed,” CEO Laurie Holcomb said in a statement.
“Our state-of-the-art indoor cultivation campus is one of our greatest differentiators; enabling us to reliably produce premium quality flower for use in our first-party branded products that we sell across all our retail stores. This true vertical integration has minimized our reliance on third-party biomass, manufacturing, and distribution suppliers, de-risking our operations and allowing us to extract margin across the supply chain while delivering the highest-quality products for our consumers,” she added.
Holcomb also noted the successful integration efforts post-merger, which resulted in cost savings and put the company on track for generating free cash flow in 2024. Additional synergies are expected to be realized in 2024.
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