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How Are U.S. Companies Faring?

How Are U.S. Companies Faring?

  • Categories:News
  • Time of issue:2020-12-25 18:54
  • Views:

(Summary description)Publicly traded cannabis firms have different levels of profits and cash on hand

How Are U.S. Companies Faring?

(Summary description)Publicly traded cannabis firms have different levels of profits and cash on hand

  • Categories:News
  • Time of issue:2020-12-25 18:54
  • Views:
Information

Publicly traded cannabis firms have different levels of profits and cash on hand

 

Cash on hand represents how much of a cushion a company has readily available to maintain operationseven in the face of losses. Companies with high cash-burn rates, such as Denver-based Schwazze (see page 18), are at higher risk of missing out when expansion opportunities arise or not being able to respond to adverse conditions.

 

Having a high level of cash on hand doesnt necessarily mean a company is operating well. California-based Terra Tech Corp., for example (see page 18), has a relatively low level of cash on hand, but that level has been steady over the past three report-ing periodsmeaning the company has been operating within its means.

 

When compared to the other publicly traded marijuana firms (see page 18), Florida-based Trulieve is an anomaly. In addition to being able to build its significant cash reserve over the past three reporting periods, it has maintained a profitable operation over time.

 

The companys net profits decreased during the first six months of 2020, primarily because of a decision not to do a spring plant, which resulted in less product inventory. Even with the declining trend, the company has remained above the crucial break-even line.

 

Publicly traded cannabis firms have different levels of profits and cash on hand

 

Cash on hand represents how much of a cushion a company has readily available to maintain operationseven in the face of losses. Companies with high cash-burn rates, such as Denver-based Schwazze (see page 18), are at higher risk of missing out when expansion opportunities arise or not being able to respond to adverse conditions.

 

Having a high level of cash on hand doesnt necessarily mean a company is operating well. California-based Terra Tech Corp., for example (see page 18), has a relatively low level of cash on hand, but that level has been steady over the past three report-ing periodsmeaning the company has been operating within its means.

 

When compared to the other publicly traded marijuana firms (see page 18), Florida-based Trulieve is an anomaly. In addition to being able to build its significant cash reserve over the past three reporting periods, it has maintained a profitable operation over time.

 

The companys net profits decreased during the first six months of 2020, primarily because of a decision not to do a spring plant, which resulted in less product inventory. Even with the declining trend, the company has remained above the crucial break-even line.

 

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