Schwazze’s 2023 Earnings: Focus on Dispensary Growth

The TDR Three Takeaways on Schwazze:

  1. Schwazze reported revenue of $172.4 million in FY 2023, up from $159.4 in FY2024.
  2. With a 31% adjusted EBITDA margin in 2023 shows operational efficiency.
  3. Schwazze expanded its dispensary count by over 50%, enhancing its retail strategy, yet revenue only went up 8.1%

In 2023, Schwazze, formally known as Medicine Man Technologies (OTC: SHWZ, CBOE: SHWZ) showed encouraging financial and operational performance despite the challenges in the highly competitive cannabis markets of Colorado and New Mexico. The company reported a total revenue of $172.4 million, marking a substantial growth from the previous year. This increase is attributed to Schwazze’s strategic focus on retail expansion, improved operating cash flow, and enhanced customer experience.

Schwazze’s aggressive retail strategy, which resulted in a more than 50% increase in its store footprint to 63 dispensaries, played a role in this achievement. This expansion was critical in maintaining the companies competitive edge, especially in a market characterized by intense competition and pricing pressures. The company’s interim CEO, Forrest Hoffmaster, highlighted the importance of Schwazze’s investments in elevating customer experience as a driver for outpacing the market growth in the fourth quarter.

The financial progress  of Schwazze is shown by its adjusted EBITDA of $53.4 million or 31% of revenue, underscoring the company’s operational efficiency. In addition, the generation of $12.2 million in operating cash flow in FY 2023 reflects Schwazze’s financial management and operational effectiveness.

Despite the pressures from the proliferation of new licenses leading to increased competition and aggressive pricing strategies, particularly in New Mexico, Schwazze has continued to focus on cost optimization and asset utilization. This approach, coupled with a balanced pricing and promotional strategy, has allowed the company to work through the challenging market conditions successfully.

Looking forward, Schwazze remains optimistic about the regulatory momentum in the cannabis industry and is committed to continuing its efforts to elevate the customer experience, improve loyalty programs, and enhance retail assets. With a proven track record of executing in competitive markets, Schwazze is poised for further growth and profitability in 2024. Want to keep up to date with all of TDR’s research and news, subscribe to our daily Baked In newsletter.  

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Schwazze reports a solid financial performance in 2023, with revenue of $172.4M and a 31% adjusted EBITDA margin, highlighting growth and efficiency.

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