Halo reports 74% year-over-year revenue growth and highest adjusted gross profit since 2019

Not for Distribution to U.S. Newswire Services or For Dissemination in the United States

All figures in USD unless stated otherwise

This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated May 4, 2021, to its short form base shelf prospectus dated September 2, 2020


Toronto, August 16, 2021 – Halo Collective Inc. (“Halo” or the “Company”) (NEO: HALO) (OTCQB: HCANF) (Germany: A9KN) today announced its financial and operational results for three months ended June 30, 2021 (“Q2 2021”).

Second Quarter 2021 Financial Highlights:

  • Revenue of $9.1 million, up $3.9 million, or 74.3%, compared to $5.2 million in Q2 2020, including the sale of over 4.3 million grams of cannabis products principally to dispensaries in Oregon and California, a 302% year-over-year increase.
  • Organic revenue growth was 36%[1].
  • Gross profit of $2.2 million, or 24.1% gross margin, an increase from $1.0 million, or 19.6% gross margin, for Q2 2020. Adjusted gross profit1 was $2.5 million, or 27.8% gross margin, compared to $1.2 million, or 40.1% gross margin, in Q2 2020.

“Halo delivered its highest gross profit adjusted for fair value gains or losses in biological assets and impairments since 2019 due to continued strong revenue growth and revenue optimization efforts to drive higher-quality sales,” said CEO and Co-Founder Kiran Sidhu. “We continue to generate strong organic and inorganic growth due to the popularity of our premium products, improved brand recognition and enhanced operational efficiency. Our operating expenses are significantly elevated as we support both the Halo Tek and Akanda operations over the next few months, but we anticipate significant decreases in overheads by the end of the year, helping to position the Company to achieve positive EBITDA in Q4 2021.”

Mr. Sidhu continued, “The proposed spin-off of Halo Tek, and the reorganization of our international assets into Akanda, are key strategic actions we are taking to sharpen our strategic focus as a leading U.S. multi-state operator (MSO) focused on Oregon and California. We continue to execute our growth plan with a model centered around building out cultivation capacity in Oregon and California and our retail network with an aim to open or acquire up to 10 operational California dispensaries this year. Additionally, there are numerous emerging cannabis businesses within the Halo Collective portfolio that we intend to scale. We expect these additional emerging operations will become an incremental source of value creation for Halo stakeholders towards the end of 2021 with significant impact in 2022.”

Philip Van Den Berg, CFO and Co-Founder continued, “The Q2 results demonstrate that we are on track toward our goal of profitability. We are reducing our full year 2021 revenue guidance from $75 million to $65 million. Our dispensaries should be online over the next 120 days, contributing at a full run rate by year end. Meanwhile, we expect to improve overall profitability by the opening of our three Los Angeles dispensaries, significantly reducing core U.S. overheads, and executing on the strategic actions related to the Halo Tek and Akanda transactions.”

Second Quarter 2021 Financial Results


Revenues in Q2 2021 were $9.1 million compared to $5.2 million in Q2 2020, a 74.3% increase. Total sales were 4,349,317 grams (Q2 2020: 1,083,066 grams), a 302% increase. The average mix price was $2.10 per gram (Q2 2020: $4.84 per gram), a 56.6% decline, explained by a higher proportion of lower priced flower, pre-rolls, trim and fresh frozen in comparison with Q2 2020. Organic revenue growth was 36%.

Revenue growth was mixed across the Company’s subsidiaries which include ANM Inc. (“ANM”), the owner of the Company’s facility in Oregon, Mendo Distribution and Transportation LLC (“MDT”), the owner of the facility in Ukiah, Coastal Harvest LLC (“Coastal Harvest”), Halo’s extraction facility in California, and Halo Winberry Holdings, LLC (“Halo Winberry”), which operates a one-acre grow outside of Eugene, OR. ANM reported revenues of $3.9 million, a 3.9% decrease over Q2 2020. MDT reported revenues of $1.9 million, a 66.9% increase over Q2 2020. Coastal Harvest reported revenues of $0.3 million compared to nil for Q2 2020. Halo Winberry reported revenues of $3.5 million. Halo Winberry’s results were not included in the three months ended June 30, 2020.

Gross Profit

The Company reported a gross profit of $2.2 million (Q2 2020: gross profit of $1.0 million), with a reported gross margin of 24.1% (Q2 2020: 19.6%). Adjusted for the loss on biological assets, gross profit was $2.5 million (Q2 2020: $1.2 million), with an adjusted gross margin of 27.8% (Q2 2020: 40.1%).

Liquidity and Cash Balance

As of June 30, 2021, Halo had available cash in the amount of $5.9 million and approximately $538,000 in restricted cash. During the quarter, a total of 80,665,090 shares were issued in connection to the at-the-market public offering for gross proceeds of $4.2 million (C$5.1 million).


In Q2 2021, ANM, the owner of the Company’s facility in Oregon, sold 1,104,474 grams of shatter, cartridge oil, live resin, tinctures and gummies, flower, and pre-rolls (Q2 2020: 963,091 grams), a 14.7% decrease. Sales of oil and extracts were 467,874 grams (Q2 2020: 571,389 grams), a 18.1% decrease. The wholesale price of oils, extracts and edibles increased by 3.0% to $6.57 per gram (Q2 2020: $6.38 per gram). Flower sales in Q2 2021 were 502,478 grams (Q2 2020: 270,357 grams), a 85.9% increase. The wholesale price of flower increased by 12.7% to $1.21 per gram (Q2 2020: $1.07 per gram). Pre-roll sales were 134,122 grams (Q2 2020: 121,345 grams), a 10.5% increase. The wholesale price of pre-rolls increased by 41.6% to $1.90 per gram (Q2 2020: $1.34 per gram). The average mix-price across all products was $3.56 per gram equivalent (Q2 2020: $4.25 per gram), a 16.2% decrease.


In Q2 2021, MDT, the owner of the facility in Ukiah, sold 1,603,369 grams of distillate, live resin, gummies and pre-rolls (Q2 2020: 119,464). The average price decreased 88.2% to $1.19 (Q2 2020: $10.09).

Halo Winberry

Halo Winberry sold 1,223,679 grams of oil and extracts, shatter, live resin, edibles, flower, pre-rolls and trim at an average mix-price of $2.90 per gram. Prices ranged from $14.26 per gram for oil, $13.02 for live resin, $0.36 for extracts (balm, lotions), $0.72 for edibles, $1.61 for flower, $14.83 for pre-rolls to $0.33 per gram for trim.

Updated Full Year Outlook

Due to unexpected permitting delays with the opening of the Company’s dispensaries in Westwood, Hollywood and the NOHO Art District due in part to delays at the Bureau of Cannabis Control in Los Angeles, Halo is adjusting its full-year 2021 revenue expectation to $65 million down from $75 million as previously guided[2]. Management continues to expect that the Company will be EBITDA positive in the fourth quarter. In addition, the Company expects its dispensaries to open before the end of the year and to contribute in full to 2022 revenue. Halo’s revised revenue guidance implies 200% year-over-year revenue growth compared to $21.6 million in 2020.

Earnings Conference Call

Halo will also host a conference call at 4:15 p.m. Eastern Time on Tuesday, August 17, 2021 to discuss its results. A live audio webcast will be available for registration. A replay of the call will be accessible by telephone until 11:59 p.m. Eastern Time on Tuesday, August 24, 2021.

Live audio webcast: http://www.directeventreg.com/registration/event/9444809

Dial-In Number: 1-800-585-8367 or 1-416-621-4642 (North America Toll Free)

Conference ID: 9444809

Replay Dial-in Number: 1-800-585-8367 (North America Toll Free)

Replay Password: 9444809

Additional Information

Complete results are reported in the Company’s consolidated financial statements for the three months ended June 30, 2021 (the “Consolidated Financial Statements”) and associated management’s discussion and analysis (the “Q2 2021 MD&A”).

[1] See “Non-IFRS Financial Measures“.

[2] See “Financial Outlook“.


About Halo Collective Inc.

Halo is a leading, vertically integrated cannabis company that cultivates, extracts, manufactures, and distributes quality cannabis flower, oils, and concentrates, and has sold approximately eleven million grams of oils and concentrates since inception. The Company continues to expand its business and scale efficiently, partnering with trustworthy leaders in the industry who value Halo’s operational expertise in bringing a host of quality products to market.

Halo currently operates in the United States in Oregon and California, Canada, Southern Africa in the Kingdom of Lesotho, and the United Kingdom. The Company sells cannabis products principally to dispensaries in the U.S. under its brands Hush, Winberry, Mojave, and Exhale, and under license agreements with Papa’s Herb®, DNA Genetics, Terphogz, and FlowerShop*, a cannabis lifestyle and conceptual wellness brand that includes G-Eazy as a partner and key member.

As part of continued expansion and vertical integration in the U.S., Halo boasts several grow operations throughout Oregon and two planned in California. In Oregon, the Company has a combined 11 acres of owned and contracted outdoor cultivation, including East Evans Creek, a six-acre grow site in Jackson County with four licenses owned and operated by Halo and two third-party licenses under contract to sell all of their product to Halo; Winberry Farms, a one-acre grow; and William’s Wonder Farms, a three-acre grow site in Applegate Valley, under contract to sell all of its product to Halo pending the closing of Halo’s acquisition of its licenses and business assets.

In California, the Company is building out Ukiah Ventures, a planned 30,000 sq. ft. indoor cannabis grow and processing facility, which will include up to an additional five acres of industrial land to expand the site. Recently, Halo partnered with Green Matter Holding in California to purchase a property in Lake County, developing up to 63 acres of cultivation, comprising one of the largest licensed single-site grows in California. Halo also plans to expand its operations in California by opening three dispensaries in North Hollywood, Hollywood, and Westwood, one of which may house a FlowerShop* branded experience.

In Canada, Halo acquired three KushBar retail cannabis stores located in Alberta as a first in its planned entry into the Canadian market, leveraging its Oregon and California brands. With the KushBar retail stores as a foundation, the Company plans to expand its foothold in Canada.

Halo has also acquired a range of software development assets, including CannPOS, Cannalift, and CannaFeels, as well as a discrete sublingual dosing technology, Accudab. The Company intends to spin-off these assets, and its intellectual property and patent applications into its subsidiary Halo Tek Inc. Halo expects to complete a distribution to shareholders on a record date to be determined by Halo.

Halo has recently announced its intention to reorganize its non-U.S. operations into a newly formed entity called Akanda Corp., whose mission will be to provide high-quality and ethically sourced medical cannabis products to patients worldwide. Akanda will seek to deliver on this promise while driving positive change in wellness, empowering individuals in Lesotho, and uplifting the quality of the lives of employees and the local communities where it operates, all while limiting its carbon footprint. Akanda will combine the scaled production capabilities of Bophelo Bioscience & Wellness Pty. Ltd., Halo’s Lesotho-based cultivation and processing campus located in the world’s first Special Economic Zone (SEZ) containing a cannabis cultivation operation, with distribution and route-to-market efficiency of Canmart Ltd., Halo’s UK-based fully approved pharmaceutical importer, and distributor that supplies pharmacies and clinics within the U.K. With a potential maximum licensed canopy area of 200 hectares (495 acres), Bophelo has scalability that is arguably unmatched in the world today.

For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com

Connect with Halo Collective: EmailWebsite | LinkedIn | Twitter | Instagram

Contact Information

Halo Collective Inc.
Investor Relations

Non-IFRS Financial Measures

Organic Revenue and Adjusted Gross Profit are non-IFRS financial measures that the Company uses to assess its operating performance and does not have any standardized meaning prescribed by IFRS. Management defines Organic Revenue as internal growth the company generates from its operations, measured by same-store or comparable sales. Management defines Adjusted Gross Profit as Gross Profit adjusted for fair value gains or losses on biological assets, and impairments included in cost of goods sold. These non-IFRS measures are provided to assist management and investors in determining the Company’s operating performance. The Company also believes that securities analysts, investors and other interested parties frequently use their non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. As other companies may calculate these non-IFRS measures differently than the Company, these metrics may not be comparable to similarly titled measures reported by other companies. For a reconciliation of Adjusted Gross Profit please refer to “Non-IFRS Measures” in the Q2 2021 MD&A, which is available on the Company’s SEDAR profile at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking information may relate to anticipated events or results including, but not limited to the expected results of operations and changes to operating expenses currently expected by management, the number of stores to be added by the end of the year, management’s plans regarding its portfolio of cannabis businesses, revenue outlook, the expected contribution from the Company’s California dispensaries and the expected opening date thereof, the time and place for the Company’s earnings call, the Company’s expansion plans regarding Canada, the expected size and capabilities of the final facility planned at Ukiah Ventures, the size of Halo’s planned cultivation facility in Northern California, and the ability of Bophelo and Canmart to serve the U.K. market, the proposed spin-off with Halo Tek Inc. and Halo’s proposed plans to re-organize its non-U.S. operations via Akanda Corp.

By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: inability of management to successfully integrate the operations of acquired businesses, changes in the consumer market for cannabis products, changes in the expected outcomes of the proposed changes to Halo’s operations, delays in obtaining required licenses or approvals necessary for the build-out of Oregon operations, dispensaries or Canadian operations, the proposed spin-out with Halo Tek Inc. or the proposed re-organization with Akanda Corp., delays or unforeseen costs incurred in connection with construction, the ability of competitors to scale operations in Northern California, delays or unforeseen difficulties in connection with the cultivation and harvest of Halo’s raw material, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company’s annual information form dated March 31, 2021 and other disclosure documents  available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.

Financial Outlook

This press release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for the Company’s forecasted revenue and EBITDA for the twelve and three month period ending December 31, 2021, respectively and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements” above and assumptions with respect to market conditions, pricing, and demand. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management have approved the financial outlook in this press release and believe that it has been prepared on a reasonable basis and such financial outlook is being provided for the purpose of providing further information about the Company’s future business operations. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements” above, it should not be relied on as necessarily indicative of future results.


This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Related Posts