Earnings release
Page 1
Grown Rogue Reports Fourth Quarter and Annual 2024 Results Medford, Oregon, March 31, 2025 – Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a craft cannabis company born from the amazing terroir of Oregon’s Rogue Valley, is pleased to report its fourth quarter and full year results ended December 31, 2024. The Company changed its fiscal year-end from October to December during 2024, affecting year-over-year comparison periods, including making year-over-year quarterly comparisons less relevant. All financial information is provided in U.S. dollars unless otherwise indicated. 2024 Operational and Financial Highlights: • Revenue of $27.0M compared to $23.4M in the year ended October 31, 2023, an increase of 16% • Adjusted EBITDA of $9.7M compared to $7.6M in the year ended October 31, 2023, an increase of 27% • Adjusted EBITDA margin of 35.8% compared to 32.7% in the year ended October 31, 2023 • Grown Rogue Received Licensing Approval in New Jersey and Closed Option 1 to Acquire 44% of ABCO Garden State, LLC (“ABCO”), with agreements in place to own up to 70%, pending regulatory approval • Commenced sales of Grown Rogue flower and pre-rolls in New Jersey in December and, as of mid-March, are selling into approximately half of the 205 dispensaries in the state • Increased ownership of Michigan operations from 60% to 80% • Convertible lenders voluntarily converted $3.1M of outstanding convertible debentures not due until 2027 • Announced the termination of the advisory agreement with Vireo Growth Inc. (formerly Goodness Growth Holdings, Inc.) • Subsequent to year-end, the Company appointed Andrew Marchington as Chief Financial Officer and Josh Rosen as Chief Strategy Officer • Subsequent to year-end Nile, the Company's affiliated dispensary located in West New York, New Jersey, opened in February 2025, with its grand opening event planned for Saturday, March 29 • Subsequent to year-end, the Company closed a US$7.0M credit facility at ~9% interest 2024 Fourth Quarter Financial Highlights: • Revenue of $5.7M and adjusted EBITDA of $2.6M • Adjusted EBITDA margin of 46.9%
Page 2
Management Commentary “This was another productive year for Grown Rogue with growth in both revenue and aEBITDA showing the continued execution by our team in competitive markets against a backdrop of price compression that was most pronounced in the back half of the year. Our core markets of Oregon and Michigan performed well in 2024 with strong market share increases in both markets. Our sales in OR and MI grew 10% and 13%, respectively, while state sales in OR were flat and MI were up 8%, indicating continued strong demand for our flower and pre-roll products. Our state-level EBITDA margins in 2024 were affected by lower pricing, particularly in Oregon, but we remain relentlessly focused on offsetting this competitive environment with strong cost controls, operational efficiencies and yield improvements. We continue to see pricing pressure early in 2025, most significantly in Michigan and we’re optimistic that we’ll see this pressure subside as we move through the year. Fortunately, our strong execution and resulting margin profile makes us resilient.,” said Obie Strickler, CEO of Grown Rogue. “I’m so proud of everyone on the Grown Rogue team for both maintaining the focus on continuous improvement in our existing operations and simultaneously delivering against an aggressive go-to-market timeline in New Jersey. Augmenting our team as we grow, while retaining and growing our core talent, is the linchpin of our success. I believe we’re doing a remarkable job of executing against the things we control. Our near-term focus remains on continuous operational improvements, construction of phase two at the New Jersey facility, the buildout of our facility in Illinois, and our ongoing measured pursuit of new markets. Our recently announced credit facility supports these growth initiatives on attractive terms by industry standards. We continue to believe that high-quality, low-cost cannabis cultivation, that delights consumers, is a protectable moat when done at the proper scale,” continued Mr. Strickler. “I want to personally thank all our customers, the entire Grown Rogue team, and our supportive partners and shareholders for each doing their part to help Grown Rogue achieve our goal of becoming a nationally recognized craft flower company in the U.S. I look forward to providing future updates, most notably as we actively increase our penetration in the New Jersey market.” Oregon Market Highlights ($USD Millions) Oregon FY 2024 FY 2023* +/- % Revenue 12.1 11.0 +10% aEBITDA 3.6 4.4 -18% aEBITDA Margin % 30.0% 40.1% -1010 bps
Page 3
* FY 2023 data is from November 2022 to October 2023 Michigan Market Highlights ($USD Millions) Michigan FY 2024 FY 2023* +/- % Revenue 12.9 11.4 +13% aEBITDA 5.8 5.3 +8% aEBITDA Margin % * FY 2023 data is from November 2022 to October 2023 44.5% 46.7% -220 bps Michigan operations are through Golden Harvests, LLC.
Page 4
Financial Statements and aEBITDA reconciliation Consolidated Statements of Financial Position December 31, 2024 December 31, 2023 October 31, 2023 $ $ $ ASSETS Current assets Cash and cash equivalents (Note 18) 4,682,221 6,804,579 8,858,247 Accounts receivable (Note 18) 1,596,912 1,642,990 2,109,424 Biological assets (Note 3) 1,554,622 1,723,342 1,566,822 Inventory (Note 4) 4,769,776 5,021,290 4,494,257 Prepaid expenses and other assets 864,009 420,336 392,787 Notes receivable (Note 6.3) 7,189,635 - - Total current assets 20,657,175 15,612,537 17,421,537 Warrants asset (Note 13.2) 4,855,795 8,820,897 8,753,266 Other Investments (Note 6.1 and 6.2) 1,810,363 - - Notes receivable (Notes 6.3) 2,613,969 2,449,122 1,430,526 Property and equipment (Note 8) 11,870,220 1,761,382 1,361,366 Intangible assets and goodwill (Note 9) 1,257,668 725,668 725,668 Deferred tax asset (Note 20) 250,620 246,294 470,358 TOTAL ASSETS 43,315,810 29,615,900 30,162,721 LIABILITIES Current liabilities Accounts payable and accrued liabilities 2,107,619 1,358,962 2,359,750 Current portion of lease liabilities (Note 7) 736,453 925,976 824,271 Current portion of long-term debt (Note 10) 227,679 780,358 1,285,604 Current portion of convertible debentures (Note 11) 1,945,226 - - Current portion of business acquisition consideration payable (Note 5) 536,881 360,000 360,000 Derivative liability (Notes 11.1.1, 11.2 and 11.2.1) 12,504,175 7,471,519 7,808,500 Income tax payable (Note 20) 1,907,177 873,388 366,056 Total current liabilities 19,965,210 11,770,203 13,004,181 Lease liabilities (Note 7) 4,475,490 1,972,082 2,094,412 Long-term debt (Note 10) 1,001,681 82,346 102,913 Business acquisition consideration payable (Note 5) 1,693,540 - - Convertible debentures - 2,459,924 2,412,762 Other non-current liabilities (Note 20) 269,883 - - TOTAL LIABILITIES 27,405,804 16,284,555 17,614,268 EQUITY Share capital (Note 12) 38,499,491 24,593,422 24,593,422 Contributed surplus (Notes 13 and 14) 9,025,541 8,186,297 8,081,938 Accumulated other comprehensive loss (125,930) (108,069) (114,175) Accumulated deficit (32,847,334) (20,353,629) (20,996,449) Equity attributable to shareholders 14,551,768 12,318,021 11,564,736
Page 5
Non-controlling interests (Note 23) 1,358,238 1,013,324 983,717 TOTAL EQUITY 15,910,006 13,331,345 12,548,453 TOTAL LIABILITIES AND EQUITY 43,315,810 29,615,900 30,162,721 Consolidated Statements of Comprehensive Income (Loss) Year ended Two months ended Year ended December 31, 2024 December 31, 2023 October 31, 2023 $ $ $ Revenue Product sales (Note 2.1.6.1) 25,029,634 3,542,037 22,424,169 Service revenue (Note 2.1.6.2) 1,987,631 96,050 929,016 Total revenue 27,017,265 3,638,087 23,353,185 Cost of goods sold Cost of finished cannabis inventory sold (12,827,041) (1,404,323) (11,155,676) Costs of service revenue (206,669) (89,210) (308,641) Gross profit, excluding fair value items 13,937,355 2,144,554 11,888,868 Realized fair value loss amounts in inventory sold (3,358,862) (460,647) (2,573,151) Unrealized fair value gain amounts on growth of biological assets 2,816,943 686,867 3,355,797 Gross profit 13,441,636 2,370,774 12,671,514 Expenses Amortization of property and equipment 939,727 186,415 578,641 General and administrative (Note 19) 10,075,360 1,437,353 6,465,877 Share-based compensation 1,306,607 104,359 346,113 Total expenses 12,321,694 1,728,127 7,390,631 Income from operations 1,119,942 642,647 5,280,883 Other income and (expense) Interest expense (379,161) (69,164) (370,616) Accretion expense (2,042,556) (216,493) (1,026,732) Other income (expense) 1,938,713 49,678 441,487 Gain on extinguishment on note receivable 156,165 - - Unrealized gain (loss) on derivative liability (12,768,905) 336,981 (4,563,498) Unrealized gain on warrants asset 3,094,413 400,016 129,113 Loss on equity investment in associate (169,637) - - Gain (loss) on disposal of property and equipment 50,057 (87,699) (182,025) Total other income (expense), net (10,120,911) 413,319 (5,572,271) Income (loss) before taxes (9,000,969) 1,055,966 (291,388) Income tax (Note 20) (1,695,825) (383,539) (370,932) Net income (loss) (10,696,794) 672,427 (662,320)
Page 6
Other comprehensive income (items that may be subsequently reclassified to profit & loss) Currency translation gain (loss) (17,861) 6,106 (4,562) Total comprehensive income (loss) (10,714,655) 678,533 (666,882) Gain (loss) per share attributable to owners of the parent – basic (0.05) 0.00 (0.00) Weighted average shares outstanding – basic 209,441,725 182,005,886 172,708,792 Gain (loss) per share attributable to owners of the parent – diluted 0.01 0.00 0.00 Weighted average shares outstanding – diluted 237,428,458 214,046,728 172,708,792 Net income (loss) for the period attributable to: Non-controlling interest 606,848 29,607 (129,279) Shareholders (11,303,642) 642,820 (533,041) Net income (loss) (10,696,794) 672,427 (662,320) Comprehensive income (loss) for the period attributable to: Non-controlling interest 606,848 29,607 (129,279) Shareholders (11,321,503) 648,926 (537,603) Total comprehensive income (loss) (10,714,655) 678,533 (666,882) Consolidated Statements of Cash Flows Year ended Two months ended Year ended December 31, 2024 December 31, 2023 October 31, 2023 $ $ $ Operating activities Net income (loss) (10,696,794) 672,427 (662,320) Adjustments for non-cash items in net income (loss): Depreciation of property and equipment 939,727 186,415 578,641 Amortization of property and equipment included in costs of inventory sold 1,980,597 209,985 1,757,672 Unrealized fair value gain amounts on growth of biological assets (2,816,943) (686,867) (3,355,797) Realized fair value loss amounts in inventory sold 3,358,862 460,647 2,573,151 Deferred income taxes (4,326) 224,064 (470,358) Share-based compensation 1,306,607 104,359 344,593 Accretion expense 2,042,556 216,493 1,026,732 Loss on equity investment in associate 169,637 - - Gain on extinguishment on note receivable (156,165) - - (Gain) Loss on disposal of property and equipment (50,057) 87,699 182,025 Unrealized (gain) loss on fair value of derivative liability 12,768,905 (336,981) 4,563,498 Unrealized gain on warrants asset (3,094,414) (400,016) (129,113) Currency translation gain (loss) (17,861) 6,106 (2,210)
Page 7
5,730,331 744,331 6,406,514 Changes in non-cash working capital (Note 15) 1,394,111 (513,222) (677,163) Net cash provided by operating activities 7,124,442 231,109 5,729,351 Investing activities Purchase of property and equipment and intangibles (1,739,014) (126,690) (1,456,782) Acquisition of Canopy Management and Golden Harvests (801,436) - - Dividend issued from Golden Harvests, LLC to minority owner (530,000) - - Cash advances and loans made to other parties (7,898,136) (1,018,596) (1,430,526) Repayment of notes receivable principal and interest 484,160 Equity investment in ABCO Garden State LLC (1,980,000) - - Repayment of bridge note 266,417 - - Net cash used in investing activities (12,198,009) (1,145,286) (2,887,308) Financing activities Proceeds from convertible debentures - - 8,000,000 Proceeds from exercise of warrants 4,657,460 - - Proceeds from exercise of stock options 359,958 - - Proceeds from sales of membership units 787,500 - - Payment of debt and equity issuance costs (126,914) - - Repayment of long-term debt (1,230,093) (568,166) (1,631,830) Repayment of convertible debentures (521,953) (126,978) (261,006) Payments of lease principal (974,749) (444,347) (1,673,344) Net cash provided by (used in) financing activities 2,951,209 (1,139,491) 4,433,820 Change in cash and cash equivalents (2,122,358) (2,053,668) 7,275,863 Cash and cash equivalents, beginning 6,804,579 8,858,247 1,582,384 Cash and cash equivalents, ending 4,682,221 6,804,579 8,858,247
Page 8
Year ended December 31 Two months ended December 31 Year ended October 31 Adjusted EBITDA Reconciliation 2024 ($) 2023 ($) 2023 ($) Net income (loss), as reported (10,696,794) 672,427 (662,320) Add back realized fair value amounts included in inventory sold 3,358,862 460,647 2,573,151 Deduct unrealized fair value gain on growth of biological assets (2,816,943) (686,867) (3,355,797) Add back amortization of property and equipment included in cost of sales 1,980,598 209,985 1,757,672 (8,174,277) 656,192 312,706 Add back interest and interest accretion expense, as reported 2,421,717 285,657 1,397,348 Add back amortization of property and equipment, as reported 939,727 186,415 578,641 Add back share-based compensation 1,306,607 104,359 346,113 Deduct unrealized gain/add back unrealized loss on derivative liability, as reported 12,768,905 (336,981) 4,563,498 Deduct gain / add back loss on disposal of property plant and equipment (50,057) 87,699 - Deduct unrealized gain on warrants asset, as reported (3,094,413) (400,016) (129,113) Deduct gain on extinguishment on note receivable (156,165) Add back income tax expense, as reported 1,695,825 383,539 370,932 EBITDA 7,657,869 966,864 7,440,125 Compliance costs 1 - - 83,747 One time compensation payments 264,336 - - Additional compliance costs associated with year end change 79,091 - - Costs associated with acquisition of Golden Harvests 2 603,000 20,000 110,000 New production location startup costs 3 887,897 - - Non recurring legal and transaction costs 187,342 - - Adjusted EBITDA 9,679,535 986,864 7,633,872 1Costs for professional services pertaining to prior periods as a result of efforts to bring the Company's disclosures current with the Securities & Exchange Commission. The Company's required disclosures were brought current, and over-the-counter trading resumed in the United States. 2 Costs associated with the Company's acquisition of the Michigan assets. 3 During the year ended December 31, 2024, we incurred 887,897 in pre -opening labor costs associated with the investment in New Jersey.
Page 9
Segmented Adjusted EBITDA Oregon Michigan Services Corporate Consolidated Revenue 12,093,606 12,936,028 1,258,131 729,500 27,017,265 Costs of revenue (7,125,199) (5,701,841) (206,670) - (13,033,710) Gross profit 4,968,407 7,234,187 1,005,261 729,500 13,983,555 Net fair value ("FV") adjustments 210,468 (752,387) - - (541,919) Gross profit 5,178,875 6,481,800 1,005,261 729,500 13,441,636 Operating expenses: General and administration 2,603,427 2,762,657 - 4,709,276 10,075,360 Depreciation and amortization 115,851 641,120 - 182,756 939,727 Share based compensation - - - 1,306,607 1,306,607 Other income and expense: Interest and accretion (241,572) (73,361) - (2,106,784) (2,421,717) Loss on disposal or property and equipment 5,280 44,777 - - 50,057 Gain on extinguishment on note receivable - - - 156,165 156,165 Unrealized (loss) gain on derivative liability - - - (12,768,905) (12,768,905) Unrealized (loss) gain on warrants asset - - - 3,094,413 3,094,413 Other income and expense 2,878 238,848 800,000 896,987 1,938,713 Net income (loss) before tax 2,226,183 3,288,287 1,851,461 (16,366,900) (9,000,969) Tax - - - 1,695,825 1,695,825 Net income (loss) after tax 2,226,183 3,288,287 1,851,461 (18,062,725) (10,696,794) Net FV adjustments (210,468) 752,387 - - 541,919 Amortization of property and equipment included in cost of sales 1,254,370 726,228 - - 1,980,598 Amortization of property and equipment 115,851 641,120 - 182,756 939,727 Share-based compensation - - - 1,306,607 1,306,607 Gain on extinguishment on note receivable - - - (156,165) (156,165) Unrealized derivative liability - - - 12,768,905 12,768,905 Loss on disposal of property plant and equipment (5,280) (44,777) - - (50,057) Unrealized warrants asset - - - (3,094,413) (3,094,413) Interest and accretion 241,572 73,361 - 2,106,784 2,421,717 Income tax - - - 1,695,825 1,695,825 EBITDA before one-time adjustments 3,622,228 5,436,606 1,851,461 (3,252,426) 7,657,869 Add back to EBITDA: One time compensation payments - - - 264,336 264,336 Additional compliance costs - - - 79,091 79,091 Eliminated management fees - - - - 46,200 Costs associated with acquisition of Golden Harvests - 323,000 - 280,000 603,000 New production location startup costs - - - 887,897 887,897 Non recurring legal and transaction costs - - - 187,342 187,342 Adjusted EBITDA 3,622,228 5,759,606 1,851,461 (1,553,760) 9,679,535
Page 10
NOTES: 1. The Company’s “aEBITDA,” or “Adjusted EBITDA,” is a non- IFRS measure used by management that does not have any prescribed meaning by IFRS and that may not be comparable to similar measures presented by other companies. The Company defines “EBITDA” as the Company’s net income or loss for a period, as reported, before interest, taxes, depreciation and amortization, and is further adjusted to remove transaction costs, stock-based compensation expense, accretion expense, gain (loss) on derecognition of derivative liabilities, the effects of fair -value accou nting for biological assets and inventory, as well as other non-cash items and items not representative of operational performance as reported in net income (loss). Adjusted EBITDA is defined as EBITDA adjusted for the impact of various significant or unus ual transactions. The Company believes that this is a useful metric to evaluate its operating performance. NON-IFRS FINANCIAL MEASURES EBITDA and aEBITDA are non-IFRS measures and do not have standardized definitions under IFRS. The Company has also provided unaudited pro-forma financial information, which assumes that closed and pending mergers and acquisitions in 2021 are included in the Company’s financial results as of the beginning of the quarterly and annual periods in 2021. The Company has provided the non-IFRS financial measures, which are not calculated or presented in accordance with IFRS, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non- IFRS financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein. Accordingly, the following information provides reconciliations of the supplemental non- IFRS financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with IFRS. About Grown Rogue Grown Rogue International Inc. (CSE: GRIN | OTC: GRUSF) is a craft cannabis company operating in Oregon, Michigan, New Jersey and Illinois , focused on delighting customers with premium flower and flower-derived products at fair prices. The Company’s roots are in Southern Oregon, where it has proven its capabilities in the highly competitive and discerning Oregon market. The Company’s passion for quality product and value, combined with a disciplined approach to growth, prioritizes profitability and return on capital without sacrificing quality. The Company’s strategy is to pursue capital efficient methods to expand into new markets, bringing craft-quality product at fair prices to more consumers. The Company also continues to make modest investments to improve outdoor craft cultivation capabilities in preparation for eventual interstate commerce. For more information, visit www.grownrogue.com. FORWARD-LOOKING STATEMENTS T his press release contains statements which constitute “forward -l ooking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward - l ooking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and include information regarding: (i) statements regarding the future direction of the Company (ii) the ability of the Company to successfully achieve its business and financial objectives, (iii) plans for expansion of the Company and securing applicable regulatory approvals, and (iv) expectations for other economic, business, and/or competitive factors . Investors are cautioned that forward -l ooking information is not based on historical facts but instead reflect the Company’s management’s expectations, estimates or projections concerning the business of the
Page 11
Company’s future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward -l ooking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward -l ooking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; and in particular in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; or adverse changes in the application or enforcement of current laws; compliance with extensive government regulation and related costs, and other risks described in the Company’s public disclosure documents filed on Sedar. S hould one or more of these risks or uncertainties materialize, or should assumptions underlying the forward -l ooking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward -l ooking information except as otherwise required by applicable law. T he Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational cannabis marketplace in the United States through its indirect operating subsidiaries. Local state laws where its subsidiaries operate permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company's business are disclosed in the Company’s Listing Statement filed on its issuer profile on SEDAR+ at www.sedarplus.ca . Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. For further information on Grown Rogue, please visit www.grownrogue.com or contact:
Page 12
Obie Strickler Chief Executive Officer obie@grownrogue.com Jakob Iotte Vice President of Investor Relations jakeiotte@grownrogue.com( 458) 226-2662