- As another cannabis earnings season comes to a close, the financial results from some of the smaller U.S. multi-state operators (MSOs) have fallen under the radar, despite posting awe-inspiring numbers.
- A perfect example of an under-the-radar company that recently posted stellar earnings is Hollister Biosciences, which saw its Q4 and full-year 2020 revenue skyrocket +3,243% and +2,960% year over year, respectively.
- Hollister followed that up with a blowout Q1 2020 earnings report, which saw the company’s revenue surge another +97% over Q4 (+2,332% YoY) and featured net income of $2 million and adjusted EBITDA of $2.8 million.
- In addition to Hollister’s strengthening fundamentals, the rapidly rising cannabis MSO also holds a significant stake in the burgeoning psychedelics industry, making HOLL stock one of the more unique, “best of both worlds” investment opportunities.
Hollister Biosciences (CSE: HOLL) (OTC: HSTRF) (FRA: HOB) got its start in its namesake town, Hollister, California. The company sells a wide variety of cannabis products throughout California, including hash-infused pre-rolls and celebrity-endorsed medical tinctures. In March 2020, the company acquired Venom Extracts, a leading cannabis concentrate company based in Arizona.
Hollister has since brought Venom’s highly sought-after products to the California marketplace. It was the sale of Venom’s products across the two states that drove Hollister’s strong financial results, with Venom accounting for 95% of revenues. With Arizona recently beginning sales of recreational cannabis products, the company expects to see significant revenue growth from Venom’s line of products, which are available in 95 dispensaries statewide.
With that said, let’s take a look at some of the highlights from Hollister’s most recent earnings reports.
- Q4 revenue of $11.7 million, up +18% quarter over quarter and +3,243% year over year.
- Full-year 2020 revenue of $30.6 million, up +2,960% year over year.
- 4,000 kg of Venom concentrates sold in Arizona, #1 market share (30%).
- Licensing agreement for medical tinctures with legendary comedian Tommy Chong.
- Partnership with Easy Rider magazine to release Easy Rider-branded cannabis products systemwide.
- Partnership with Tactical Relief to develop medical cannabis for veterans.
- Partnership with Heavy Brands to sell artist-sponsored Heavy Grass products.
- Q1 2021 revenue $23.1 million, up +97% from the previous quarter and up +2,332% compared to last year’s Q1.
- Q1 2021 net income of $2 million, a substantial improvement compared to Q1 2020’s net loss of $2.2 million.
- Q1 2021 adjusted EBITDA of $2.8 million, another significant improvement compared to Q1 2020’s adjusted EBITDA loss of $1.1 million.
- Closed a brokered private placement of Special Warrants raising gross proceeds of CDN $7.9 million.
- Announce its direct-to-consumer delivery platform, Dreamy Delivery, was the official delivery platform of the 2021 Emerald Cup Awards.
A Piece of the Psychedelic Pie
Hollister made headlines last May after the cannabis company announced it closed its acquisition of AlphaMind Brands, a growth stage psychedelics firm developing a portfolio of certified legal mushroom-based natural health products. With operations in Canada and the United States, AlphaMind has an impressive portf0lio of “ready to ship” products SKU’s, including Cordyceps, Lion’s Mane, Shiitake, Oyster, and Reishi Mushroom based: liquid tinctures, capsules, concentrated mushroom powders, teas and chocolate. AlphaMind’s unique formulations are developed by research-driven initiatives alongside industry experts.
With cannabis and psychedelics arguably the two hottest investment sectors currently, Hollister’s move to diversify its operations has made its stock a unique option for investors. With exposure to both the cannabis and psychedelics sectors, combined with the company’s rapidly strengthening fundamental position and low market cap relative to its peers, Hollister’s stock has emerged as one of the more attractive investment opportunities on the market today.
Hollister Biosciences became an MSO just over a year ago when it purchased Venom Extracts. The combined company has strong and growing operations in both Arizona and California. In particular, Arizona starting recreational sales will provide a huge boost to Hollister’s topline revenue. Despite posting very impressive 2020 numbers, Hollister expects 2021 to be even better. The company’s recently released Q1 2021 financial results certainly back up that claim. With Hollister posting a 97% quarter over quarter and 2,332% year over year increase in Q1 2021 revenue to go along with $2 million in net income and adjusted EBITDA of $2.8 million, the sky is the limit for Hollister Biosciences.
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