Delta 9 Cannabis Inc closes out 1Q with $12.5M in revenue after transformative acquisition of Uncle Sam's retail stores
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Delta 9 closes out 1Q with $12.5M in revenue after transformative acquisition of Uncle Sam's retail stores

The acquisition turned Delta 9 into a leading retailer of cannabis products in Canada with 35 operating retail stores

inside a delta 9 cannabis store
Delta 9 ended the quarter in a strong financial position, with cash of $11.5 million

Delta 9 Cannabis Inc posted net revenue of $12.5 million in the first quarter of 2022 after closing its acquisition of 17 new cannabis retail stores.

The acquisition represents an “attractive” revenue multiple of around 0.68 times annualized revenue, Delta 9 said, adding that it expects the transaction to be earnings accretive in 2022 and 2023.

The deal turned Delta 9 into a leading retailer of cannabis products in Canada with 35 operating retail stores.

READ: Delta 9 Cannabis projects 1Q revenue of $12.4M-$12.6M, full results to come Monday

"Delta 9 recorded a transformative first quarter of 2022, closing on our 17-store acquisition of Uncle Sam's Cannabis as well as a $42 million balance sheet restructuring through a $10 million strategic investment and $32 million credit facility," said John Arbuthnot, CEO of Delta 9, in a statement.

Arbuthnot acknowledged “a degree of seasonality” and industry headwinds relating to supply chain issues and overall weakness in the Canadian cannabis market that affected its bottom line at the beginning of 2022, which caused revenue to decline slightly from $13.2 million in 1Q 2021.

However, Arbuthnot told shareholders that the company “remain(s) bullish that the remainder of 2022 looks to be a promising year for Delta 9."

The firm posted an adjusted EBITDA loss of $1.7 million versus adjusted EBITDA of $6,199 in the year-ago period.

Delta 9 ended the quarter in a strong financial position, with cash of $11.5 million, working capital of $15 million, and total assets of $106.9 million.

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