4Front Ventures Corp (OTCMKTS:FFNTF) has released its Q3 2020 financial results in which Pro Forma revenue was up 18% sequential to $22.3 Million and up 170% YoY.
Recreational sales launch in Massachusetts boosted revenue
During the quarter IFRS sales grew 25% to $12.4 million and adjusted EBITDA was $3.7 million. The company continued to witness robust revenue trends across its portfolio led by a recreational sales launch in Massachusetts and the re-opening of Mission South Chicago in July. In Washington State that company reported records sales as prices increased. At the beginning of August, the company has achieved positive operating cash flow and is poised to demonstrate substantial operating leverage going forward.
4Front had $8.5 million in cash and cash equivalents as of September 30, 2020, with total debt of $76.5 million. This string balance sheet will support continued growth through 2021. Most importantly, 4Front closed an oversubscribed bought deal of $13.2 million led by Beacon Securities. Equally the company entered a definitive sales and purchase agreement with a subsidiary of Innovative Industrial Properties Inc. The agreement provides for the sale and leaseback of the company’s cultivation and production facilities in Georgetown Massachusetts and Tumwater, Washington for an all-cash sale price of around 30 million.
The company plans to use the proceeds to pay down outstanding senior secured debt to Gotham Green Partners affiliates. The sale and the proceeds of the recently closed bought deal leave the company with $16 million in cash and long-term debt of $43 million due in May 2024.
4Front expanding in Illinois
Most importantly the company is planning to significantly expand its Illinois manufacturing and cultivation presence. It has one of the cultivation licenses in the state allowing for around 210,000 sq. ft. of the flowering canopy and it is in the process of acquiring acreage for building a cultivation facility and ultra-modern manufacturing facility to add to its established presence in the state. In Q4 the company is set to open a fourth retail store in Illinois’ Calumet City.