4Front Ventures Corp (OTCMKTS:FFNTF) posted revenues of $16.950 in Q1 2020. Its system-wide proforma sales surged to $23.7 million (up 36% QoQ) in Q1 2020.
Expects recreational license
4Front reported excellent growth in all sectors of its business despite ongoing coronavirus pandemic. Cannabis operations are essential at this difficult juncture. The company reaches compliance with the regulatory issues with CCC (Cannabis Control Commission). It expects to receive a recreational license from CCC to commence operations in Massachusetts locations.
4Front expects to complete expansions of manufacturing facilities in Illinois and Massachusetts in Q4 2020. The phase 1 expansion expects to triple the output at its Illinois facility and double the production in George town, Massachusetts operations.
Reduction in corporate overheads
4Front achieved a 40% reduction in corporate expenses and expects to maintain positive cash flow in H2 2020.
In Washington operations, the company’s debt is $80.1 million by the end of Q1 2020. It maintains a cash balance of $11.5 million. The company holds a real estate that comprises 176,000 Sq. Ft. facility for production, cultivation, and distribution operations in Washington.
CEO of 4Front, Leo Gontmakher, said the company focused on economical production and cultivation operations in targeted states. In Q1 2020, 4Front strengthened its balance sheet and streamlined cost structure. All these efforts help the company expedite growth in states like California, Michigan, Massachusetts, Illinois, and Washington.
Leo further said its resolution with CCC in Massachusetts paved the way for obtaining adult-use licensing. The company plans to achieve significant growth across all of its business arms, apart from maintaining positive cash flow this year.
With expansion nearing completion in Illinois and Massachusetts, 4Front expects to commence construction at California location towards the end of this year. Leo said he wants to replicate the success achieved in Washington in all other states of its operation.
The team at 4Front is experienced in processing, cultivation, and packaging to distribute high-quality cannabis products. It is capable of operating in competitive environments with a larger scale.
Raises funds of $5.8 million
4Front raised funds of $5.8 million through a private placement of its convertible debt. The company has upsized the funding from the previous $4 million. Its notes can be exchanged into the subordinate voting shares at $0.25.