TORONTO –
Trees Corporation (CBOE: TREE) (the “Company” or “Trees”), is pleased to announce its annual financial results for the fifteen month period ended March 31, 2023.
HIGHLIGHTS FOR THE FIFTEEN MONTHS ENDED MARCH 31, 2023 (the “CURRENT PERIOD”):
Corporate retail sales of $11.5 million for the Current Period;
System-wide sales(1) of $16.6 million in the Current Period;
20% growth in corporate same-store retail sales for the three months ended March 31, 2023 compared to the comparative period in 2022, and 20% System-wide(1) same-store sales growth over the same period;
Closing of the Company’s 5-store acquisition in B.C. completed in May 2023; and
14 Trees Cannabis branded stores currently operating on the date of this release.
“We are thrilled to report strong results with continued growth year over year in same store sales” said Jeff Holmgren, President and CFO of Trees. Mr. Holmgren added “With the closing of our 5 Trees brand licensed store acquisition in B.C. in May, our revenue and gross profit have increased substantially, creating momentum for continued growth ahead during a time where corporate consolidation opportunities have never been better.”
Consolidated Financial Statements and MD&A
The results discussed herein are a summary and are qualified in their entirety by reference to the Company’s annual consolidated financial statements and accompanying notes for fifteen months ended March 31, 2023 and the twelve month period ended December 31, 2022, and related management’s discussion and analysis of financial condition and results of operations, copies of which are available under the Company’s profile on SEDAR and the Company’s Investor Relations website at www.TreesCorp.ca.
Change to the Financial Year-End
During the twelve months ended December 31, 2022, the Company elected to change its fiscal year end to March 31 from December 31. The transition year presented herein is fifteen months and includes the period from January 1, 2022 to March 31, 2023. The Company’s objective was to obtain its annual financial statement audit during a less resource constrained time of the year. The interim and annual reporting periods of the transition year have been changed based on the new fiscal year end date. Comparative periods presented in these financial statements are not entirely comparable due to change in fiscal year end.
About Trees
Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded on the CBOE Exchange, Trees offers a differentiated retail experience, that aims to educate, amplify and unlock emerging consumer segments and need states that allows Trees to uniquely engage the 360-cannabis consumer. The Company currently has 14 Trees branded storefronts in Canada, including nine (9) stores owned and operated in Ontario and five (5) stores owned and operated in BC.
Non-IFRS Financial Measures
Throughout this MD&A, references are made to non-IFRS financial measures, including system-wide sales, same store sales, earnings before interest, taxes, and depreciation, and amortization (“EBITDA”). These measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a supplemental measure of the Company’s operating performance and therefore highlight trends in Company’s core business that may not otherwise be apparent when relying solely on IFRS measures. Management uses non-IFRS measures in measuring the financial performance of the Company.
System-wide retail sales represents the sum of the revenue reported to Trees by (i) brand licensed retail cannabis stores, which are subject to a brand license agreement providing Trees with a royalty interest, and (ii) Company-owned retail cannabis stores. Management believes this measure is useful to the investment community in evaluating brand scale and market penetration and is used by management of Trees to assess the financial and operational performance of the Company and the strength of the Company’s market position relative to its competitors.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute “forward-looking information” (“forward-looking information”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
Forward-looking statements in this document include, among others, statements relating to the Trees’ expectations regarding the closing of the transactions contemplated by the APA and receipt of regulatory approvals in connection therewith, expectations regarding the Company’s ability to unlock and capture emerging consumer segments across its platforms, expectations regarding the Company’s ability to engage its customers and new consumer segments and need states, the expectation that the Company will be successful in its growth strategy, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company’s business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company’s securities, regardless of its operating peers; (e) adverse changes in the public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.
The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.
The CBOE has neither approved nor disapproved the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release.
