MEDFORD, Ore. – Grown Rogue International Inc., a craft cannabis company, reported first quarter results ended March 31, 2025. The Company changed its fiscal year-end from October to December during 2024. All financial information is provided in U.S. dollars unless otherwise indicated.
First Quarter 2025 Highlights
- Closed US$7.0mm credit facility at approximately 9% interest with a national, FDIC- insured commercial bank
- The remaining convertible lenders converted $3.3mm of outstanding convertible debentures not due until 2027, saving approximately $0.3mm in annual interest expense
- Nile, the Company’s affiliated dispensary located in West New York, New Jersey, opened in February 2025, with its grand opening event in April.
- Developed an infused pre-roll processing lab in Oregon and soft launched infused pre-rolls in Oregon.
Management Commentary
“In October 2023 we announced our entry into the New Jersey market, driving growth and the expansion of our foundation built on properly scaled, low-cost, high-quality flower production,” said CEO Obie Strickler. “The first quarter of 2025 marked our first full quarter of New Jersey sales where we are showing strong month-to-month improvement in sales penetration, re-order rates, quality, yield, and cost control. I am particularly pleased with our financial results, with ABCO reporting $1.8M in revenue and 43% Adjusted EBITDA margins while only approximately at 25% sell-through of the facilities’ full capacity. We expect to complete Phase II construction, bringing our full capacity to 1,000 to 1,200lb of whole flower, in late 2025.
“As part of our growth plan and the goal to enter one new state each year, we have been investing in our team and systems, which is reflected in our corporate expenses. I am particularly proud of our team’s resilience and grit as we navigate pricing pressure in both Oregon and Michigan which affects our current profitability in both markets, yet we’re maintaining Adjusted EBITDA margins in the mid 30% range. I remind our team frequently, and it’s important for our shareholders as well, that these high-pressure competitive environments are what we are built for and historically when we’ve made some of our biggest efficiency and quality improvements. Despite year-over-year pricing pressure greater than 20% in both markets, this rising competition plays to our strengths and creates more opportunities for us to grab market share and further our brand awareness. We always have room for improvement, and while total pounds harvested, yield per square foot, and cost per pound produced were all positive year over year in both Oregon and Michigan, we saw a downtick in our “A” flower production in Michigan that we have identified and are correcting. While we don’t have a crystal ball with respect to pricing, we expect our operational improvements to materialize in our KPIs as we move through the year. We believe our overhead investments position us well to support New Jersey and the next 2-3 states, starting with Illinois where construction has already begun.
“Although our team is never satisfied, I believe we’re doing a remarkable job of executing against the things we control. Our near-term focus remains on continuous operational improvements, construction of phase two at the New Jersey facility, the buildout of our facility in Illinois, and our ongoing pursuit of additional markets and opportunities. We continue to believe that high-quality, low-cost, cannabis flower cultivation, that delights customers, is a protectable moat.”
According to CFO Andrew Marchington, “To help investors understand our business, we’re providing historical Adjusted EBITDA performance by segment calculated consistent with how we’re reporting the first quarter of 2025 with a bridge to our previous methodology in the tables below. We migrated to what we anticipate will be a more conservative and consistent methodology. With this change and the disclosure of our operational KPIs, our goal is to give investors an accurate view of how our business is performing in line with how we view business performance internally. Because we continue to report under IFRS, the main adjustments relate to the fair-value adjustments for financial instruments and inventory that affect our cost of goods sold, which reflects how we evaluate our business internally. Our new methodology avoids other adjustments except for stock-based compensation. And as a reminder, given the complexity of our financial reporting with respect to ABCO in New Jersey, we are providing quarterly selected unaudited financial information for ABCO and pro forma performance metrics.”
About Grown Rogue
Grown Rogue International Inc. (CSE: GRIN | OTC: GRUSF) is a craft cannabis company operating in Oregon, Michigan, and New Jersey and under development in Illinois. The Company’s strategy is to pursue capital efficient methods to expand into new markets, bringing craft-quality product at fair prices to more consumers. The Company also continues to make modest investments to improve outdoor craft cultivation capabilities in preparation for eventual interstate commerce.
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