Schwazze released its financial and operational performance for Q3. During the third quarter of 2023, total revenue saw an 8% rise, reaching $46.7 million, compared to $43.2 million in the corresponding quarter of the previous year. This report provides an insight into the company's growth and challenges during this period.
The details of Schwazze's financial situation in Q3 2023 were laid out in their recent report. The Q3 report ending on Sep. 30, 2023, highlighted revenue growth, primarily attributed to new store expansion and increased wholesale revenue. However, this growth was partially counteracted by pricing pressure stemming from the influx of new licenses in New Mexico. Operating expenses for Q3 2023 amounted to $12.5 million, up from $11.4 million in the same quarter the previous year, mainly driven by higher SG&A expenses linked to the addition of 28 stores in Colorado and New Mexico that are still in the ramp-up phase.
Further developments were pointed out by Schwazze CEO Nirup Krishnamurthy. "We continued to increase our retail footprint during the quarter to a total of 63 stores in Colorado and New Mexico while further integrating our recently-acquired assets in both states," said Nirup Krishnamurthy, CEO of Schwazze according to a press release by Schwazze. "We also generated a 41% increase in our wholesale business year-over-year as we are gaining momentum in New Mexico and improved penetration in Colorado. When looking at wholesale penetration, Schwazze now sells into seven of the ten largest operators in Colorado and New Mexico with its expanding product portfolio.
Krishnamurthy also addressed some challenges faced in the market, particularly in New Mexico. "In New Mexico, cannabis operators are navigating increased competition as a result of new licenses. While legal cannabis sales in the state were up 19% year-over-year in Q3, total store count was up 76%, leading to lower revenue on a per store basis. In response to these market dynamics, we are strategically investing in the retail experience and remain committed to attracting and retaining our customers and patients there," said Krishnamurthy, according to a press release by Schwazze.
A brief introduction of Schwazze is also provided for better context. Schwazze operates as a cannabis retail operator with a focus on the regional market, employing data-driven strategies, according to the Schwazze website.