Grown Rogue Reports Record March Sales of US$1.25M

Rhea-AI Summary

Grown Rogue International (CSE: GRIN, OTC: GRUSF) announced record sales of US$1.25M in March 2021, contributing to a pro-forma revenue of US$2.0M for Q1 2021. With a robust 66% cash margin, the annualized run rate now stands at US$15M. The company's Michigan partner, Golden Harvests, reported US$0.7M in sales, with Grown Rogue's nitrogen-sealed jars making up 40% of sales. As it aims for a 10% market share in Michigan, Grown Rogue highlights growth in branding and product quality, positioning itself favorably in the competitive cannabis market.

Positive

• Record sales orders of US$1.25M for March 2021.
• Pro-forma revenue of US$2.0M for Q1 2021 with a 66% cash margin.
• Annualized run rate projected at US$15M.
• Strong sales performance from partner Golden Harvests at US$0.7M.
• 40% of sales from proprietary nitrogen-sealed jars.

Negative

• None.

Grown Rogue International Inc. (“Grown Rogue” or the “Company”) (CSE: GRIN) (OTC: GRUSF), a multi-state cannabis company with operations and assets in Oregon and Michigan, reported record sales orders of US$1.25M for March 2021 as it scales production assets in both Oregon and Michigan.

The unprecedented month follows a record Q1 2021 pro-forma revenue¹ of US$2.0M with a 66%² cash margin. March sales represents 63% of the pro-forma revenue¹ in Q1 2021 which puts Grown Rogue on an annualized run rate of US$15M.

“This record month shows the tremendous progress our company and team have made over the past year as we scale our low cost, high margin business,” said Obie Strickler, Grown Rogue CEO. “March starts the recovery in pricing and consumer demand we have been tracking for several years. We are excited to continue setting record months as we move into the summer. That’s when we will begin harvesting from an additional 15,000 sq. ft. of fully constructed flower capacity expected to produce an additional 500 lbs. per month.”

The Company’s Michigan partner Golden Harvests, LLC (“Golden Harvests”), in which Grown Rogue holds an indirect option to acquire 60% of its equity, continues to perform exceptionally, with US$0.7M in total sales orders. Grown Rogue proprietary nitrogen sealed flower jars accounted for almost 40% of total monthly sales at an average price of US$3,297/lb. These branded products are quickly gaining traction and market share as Grown Rogue brings its innovation from the highly competitive Oregon market to Michigan.

The quality of the flower produced in Michigan by Golden Harvests -- through Grown Rogue’s proven methods -- has been recognized around the state, driving the above average price per pound Grown Rogue has traditionally received. In addition, other brands have sought Grown Rogue’s flower for their own branded flower. This furthers the Company’s brand awareness in Michigan, resulting in higher revenues and profitability, as branded flower typically sells for US$500 to US$1,000 per pound more than bulk flower. In March, Grown Rogue sold approximately 10% white label product in other brands jars as they work to minimize the lower valued bulk flower sales.

According to MarketScape, Golden Harvests was the 13^th top selling brand in Michigan during March, accounting for slightly more than 2% of the market. Like many early cannabis markets, there is high fragmentation. Grown Rogue is excited that Golden Harvests’ has obtained over 2% market share in Michigan as they work towards the goal of 10% market share in Michigan.

NOTES:

1.	The Company has provided unaudited pro-forma revenue information, which assumes that closed and pending mergers and acquisitions in 2020 and 2021 are included in the Company’s financial results as of the beginning of the quarterly and annual periods in 2020 for the Company and target companies.
2.	The Company has provided Cash Margin Analysis to demonstrate the methodology for calculating its non-IFRS production cost and margin metrics. Cash production costs of Grown Rogue products is calculated by taking the cost of finished cannabis inventory sold and deducting non-cash production costs, packaging and distribution costs, inventory write-offs and adjustments, and cost of products purchased from other Licensed Producers that were sold. Cash cost of sales per gram of dried cannabis sold is calculated by taking cash production costs of Grown Rogue products by total grams of dried cannabis sold in the period. Management believes these measures provide useful information as they remove noncash amortization and packaging costs and provide a benchmark of the Company against its competitors.

About Grown Rogue

Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight based product categorization, to create innovative products thoughtfully curated from “seed to experience.” The Grown Rogue family of products include sungrown and indoor premium flower, along with nitro sealed indoor and sungrown pre-rolls and jars.

FORWARD-LOOKING STATEMENTS

This press release contains statements which constitute “forward‐looking 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‐ looking 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 directi

FAQ

What were Grown Rogue's sales orders for March 2021?

Grown Rogue reported record sales orders of US$1.25M for March 2021.

What is Grown Rogue's pro-forma revenue for Q1 2021?

The company reported a pro-forma revenue of US$2.0M for Q1 2021.

What is Grown Rogue's projected annualized run rate?

Grown Rogue has an annualized run rate projected at US$15M.

How did Golden Harvests perform in March 2021?

Grown Rogue's partner, Golden Harvests, reported US$0.7M in total sales orders for March 2021.

What percentage of total sales did Grown Rogue's nitrogen-sealed jars account for?

Grown Rogue's nitrogen-sealed jars accounted for almost 40% of total monthly sales.