Halo Collective Reports Second Quarter 2022 Financial Results


All figures in USD unless stated otherwise

Toronto, August 16, 2022 – Halo Collective Inc. (“Halo” or the “Company”) (NEO: HALO) (OTCQB: HCANF) (Germany: A9KN) today announces its financial and operational results for the three and six months ended June 30, 2022 (“Q2 2022”).

Second Quarter 2022 Financial and Operational Highlights:

  • Revenue of $6.9 million, net of inter-company eliminations, down 24.8% compared to $9.1 million in Q2 2021. Revenue was impacted by a significant downturn in both the California and Oregon markets.
  • Total sales were 2.0 million grams, a 59.4% decrease compared to 5.0 million grams in Q2 2021. Flower sales decreased by 6.2% to 1.1 million grams compared to 1.2 million grams in Q2 2021, sales of pre-rolls increased by 11.5% to 257,245 grams compared to 230,655 grams in Q2 2021, no trim and fresh frozen sales, oils and extract sales decreased by 68.3% to 597,088 grams compared to 1.9 million grams in Q2 2021, and edibles sales decreased by 88.8% to 24,820 grams compared to 221,134 grams in Q2 2021.
  • The Company reported a gross profit of $2.1 million, or 31.9% gross margin, compared to gross profit of $2.2 million, or 24.1% gross margin, in Q2 2021.
  • Adjusted EBITDA[1] loss of $4.1 million compared to an Adjusted EBITDA loss of $4.4 million in Q2 2021.
  • The Company repaid $7.7 million in debt financing and raised $8.0 million from convertible debentures.
  • As of June 30, 2022, the Company had unrestricted cash available in the amount of $1.6 million.
  • In California, Halo has decided not to build out Ukiah Ventures and has sold the land associated with it. The sale of the land closed on June 30, 2022, resulting in a reduction of debt of $1.53 million, yielding net proceeds of approximately $588,000 including a seller note secured against the property for $400,000.
  • Halo received regulatory approval to open three Budega™ brand retail dispensaries in Los Angeles, California. The first location opened in North Hollywood on March 14, 2022, followed by a store in Westwood, which opened on May 27, 2022. Halo plans to open its flagship store in Hollywood in the latter half of 2022. These stores will increase distribution and market awareness of Halo’s proprietary brands and products in California.

On April 28, 2022, Halo Tek Inc. (“Halo Tek”), a wholly-owned subsidiary of the Company, filed a preliminary long form prospectus with the securities regulatory authorities in each of the provinces and territories of Canada, other than Québec, for the purpose of qualifying the distribution of all of the issued and outstanding common shares in the capital of Halo Tek held by Halo as a return of capital. As previously announced, on April 1, 2021, the Company intends to pursue a spin-off of certain of its software, device and intellectual property assets into Halo Tek. The spin-off of Halo Tek is expected to be completed by year end.

“The important work of defining the next phase of Halo’s evolution is well underway, as we leverage our strong positioning on the West Coast to effectively execute our vertically integrated, seed-to-sale strategy,” commented Katie Field, Executive Chairman and Chief Executive Officer. “We are sharpening Halo’s strategic focus, operating smarter, and have transitioned leadership to a new team who will carry out the refreshed plan. The goal is to leverage our existing assets with a focus on near-term payback, which has led us to take numerous actions across the Company to improve operations and shed non-productive assets.”

“During the quarter, we ramped up efforts in our brand sales business, specifically Hush and Budega which are resonating with West Coast consumers and continued the retail rollout in Los Angeles where we opened the second of three planned dispensaries. Meanwhile, we de-emphasized other areas such as bulk wholesale flower and trim sales which generated good revenue but yielded lower profitability. And, we have made the decision to walk away from other parts of the plan altogether such as the Ukiah Ventures buildout and Canadian retail.”

“Our efforts to do more with less are already paying off. In the second quarter, we maintained steady gross margins despite the downward pressure on wholesale pricing and volumes across our markets. We have also made progress reducing Halo’s indebtedness through debt paydowns.”

Concluded Ms. Field, “Importantly, we are transforming the Company into a focused West Coast operator amidst market conditions in California and Oregon that continue to be very challenging, but longer-term, are expected to be fertile grounds for significant growth and profitability for well-positioned companies such as Halo. I am highly confident that Halo is on the right path as a leader in these attractive markets. The initiatives we are undertaking, including those in the second quarter, will strengthen the Company and ultimately enhance shareholder value.”

Second Quarter 2022 Financial Results


Q2 2022 revenues were $6.9 million, net of inter-company eliminations, compared to $9.1 million Q2 2021, a 24.8% decrease. In Q2 2022, Oregon generated $3.8 million in revenue compared to Q2 2021 revenue of $7.5 million. In Q2 2022, the California wholesale business generated revenues of $2.1 million compared to $1.6 million in Q2 2021, an 32.1% increase. The first Budega retail location in North Hollywood, which opened in March 2022, added revenues of $289,307 in Q2 2022. Kushbar was consolidated in July of 2021 and added revenues of $687,986 in Q2 2022.

Total Q2 2022 sales were 2.0 million grams compared to sales of 5.0 million grams in Q2 2021, a 59.4% decrease. Between Q2 2022 and Q2 2021 Flower sales decreased by 6.2%, sales of pre-rolls increased by 11.5%, oils and extract sales decreased by 68.3% and edibles sales decreased by 88.8%.

Gross Profit

The Company reported a gross profit of $2.1 million, or 31.9% gross margin, compared to gross profit of $2.2 million, or 24.1% gross margin, in Q2 2021. For Q2 2022, Oregon generated $1.4 million in gross profit with a 37.4% gross margin, compared to Q2 2021 gross profit of $2.1 million with a 27.6% gross margin.

Liquidity and Cash Balance

As of June 30, 2022, the Company had available cash in the amount of $1.6 million. On March 16, 2022, the Company entered into an additional financing agreement of C$65.0 million with Global Tech Opportunities 6 in the form of convertible debentures.

Additional Information

Complete results are reported in the Company’s consolidated financial statements for the three and six months ended June 30, 2022, and associated management’s discussion and analysis (the “Q2 2022 MD&A”).

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

About Halo Collective Inc.

Halo is focused on the United States West Coast, where it has vertically integrated operations covering the entire value chain from seed to sale. Halo cultivates, extracts, manufactures, and distributes quality cannabis flower, pre-rolls, vape carts, edibles, and concentrates. Halo sells these products under a portfolio of brands, including Hush™, Winberry Farms™, its retail brand Budega™, and license agreements with Papa’s Herb®, DNA Genetics, and FlowerShop*. In addition, Halo has opened two dispensaries in Los Angeles under the Budega™ brand in North Hollywood and Hollywood, with plans to open one more in Hollywood in the third quarter of 2022.

In the non-THC sector, Halo is expanding into health and wellness categories, including CBD and functional supplements such as nootropic nutraceuticals and non-psychotropic mushrooms. Halo, through a series of acquisitions, has product offerings in the form of beverages (H2C Beverages), dissolvable strips (Dissolve Medical), capsules (Hushrooms™), and topical supplements (Hatshe) with proposed national distribution via a strategic agreement with SWAY Energy Corporation.

Halo has successfully acquired and integrated a variety of companies which were subsequently reorganized to create Akanda Corp. (NASDAQ: AKAN), an international medical cannabis and wellness company, of which Halo currently owns 12,674,957 common shares worth approximately $12 million as of August 15, 2022. Halo has also acquired a range of software development assets, including CannPOS, Cannalift, CannaFeels, and a discrete sublingual dosing technology, Accudab. Halo intends to reorganize these entities (including their intellectual property and patent applications) into a subsidiary called Halo Tek Inc. and to complete the distribution of the shares of Halo Tek Inc. to shareholders on record at a date to be determined.

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

Adjusted EBITDA is a non-IFRS financial measure that the Company uses to assess its operating performance and does not have any standardized meaning prescribed by IFRS. Management defines Adjusted EBITDA as earnings (loss) before interest, tax, depreciation, and amortization, as adjusted for non-cash items. Adjusted EBITDA is 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 Adjusted EBITDA in the evaluation of companies, many of which present similar metrics when reporting their results. As other companies may calculate Adjusted EBITDA differently than the Company, Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We caution readers that Adjusted EBITDA should not be substituted for determining net loss as an indicator of operating results, or as a substitute for cash flows from operating and investing activities. For a reconciliation of Adjusted EBITDA, please refer to “Non-IFRS Measures” in the Q2 2022 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 Company’s plans regarding its flagship dispensary in Hollywood, including the expected opening date thereof; the ability of the Hollywood stores to increase the distribution and awareness of the Company’s products; the proposed spin-off with Halo Tek and the expected timing thereof; the Company’s plans regarding its strategic priorities for 2022; and management’s expectations regarding the ability of the Company’s strategic refocusing to enhance shareholder value.

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, the proposed spin-out with Halo Tek Inc., 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, 2022 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.


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.


This press release includes trademarks, such as “Budega”, “Hush”, “Winberry Farms” and “Hushrooms” which are protected under applicable intellectual property laws and are the property of Halo. Solely for convenience, our trademarks referred to in this news release may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we will not assert our rights to these trademarks, trade names and services marks to the fullest extent under applicable law. Trademarks which may be used in this press release, other than those that belong to Halo, are the property of their respective owners.

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