Unrivaled Brands (OTCQX:UNRV) Inc, a multi-state vertically integrated company focused on the cannabis sector, reported that it had made significant progress on its previously-disclosed, 100-day turnaround plan.
The Santa Ana, California-based company has operations in California and Oregon. In California, Unrivaled operates three dispensaries with direct-to-consumer delivery, two cultivation facilities, and several popular company-owned brands. In Oregon, Unrivaled operates a state-wide distribution network, brands and outdoor and greenhouse cultivation.
In a statement, Unrivaled Brands Chairman Eric Baum said: “In the company’s initial communication to shareholders in May, we indicated our immediate focus was on our 100-day plan to stabilize operations, protect our performing assets, create a sustainable debt position, and put us on a path to profitability in an increasingly challenging industry and troubled California market.”
READ: Unrivaled Brands posts 907.5% revenue jump in 1Q thanks to transformation plan
He added: “I am pleased to announce progress against this plan - though humbly recognize that there is still significant work ahead of us.”
In March, the company conducted a thorough review of Unrivaled's balance sheet and determined the health of each of its business units.
“In the second quarter, we took decisive action to meaningfully reset the cost structure including tightening operations, improving financial systems and controls, and restructuring our debt,” said Baum. “We have since closed several underperforming assets…reducing our SG&A run rate by about $5 million a year.”
Baum revealed that Unrivaled’s strategy is to now focus on operations in Oregon, its retail stores in Oakland and Santa Ana, and the marketing and licensing of Korova, one of the most sought-after brands on the West Coast. High potency Korova products are currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana, said the company.
Unrivaled noted that it had achieved the following:
- Outsourcing distribution: In June last year, Unrivaled partnered with a top North American cannabis distributor with strong fulfillment infrastructure, to distribute its brands, while simultaneously exiting third-party distribution engagements which were affecting cash flow;
- Closing underperforming retail: Unrivaled closed underperforming retail locations in Los Angeles, San Leandro, and Sacramento. Wherever possible the assets from these sites have been deployed to support other business operations and the firm is marketing the closed assets and licenses;
- Reduction in management and workforce: As of August 1, 2022, Unrivaled’s headcount is 188, compared to 338 at the end of the first quarter. The reduction has come mainly from site closures and reduction of corporate headcount. Overall, payroll has been reduced by 40%;
“Moving forward, we are focused on stabilizing and growing operations, improving the balance sheet and debt restructuring,” said Baum. “We are also actively reviewing options for additional sources of capital and potential mutually beneficial partnerships.”
Unrivaled said it was considering experienced candidates for CEO and is expected to share updates in the coming weeks and months.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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