The state of Nevada is in a bit of a bind.
There isn’t much to do in quarantine if you’re unemployed and worried about if you’re going to get sick, what you’re going to eat next, and where you’re going to live next month, and there’s nothing you can do about it. So staying home and smoking cannabis makes a certain sort of sense in a Bobby McFerrin Don’t-Worry-Be-Happy kind of way.
And if CLS Holdings USA’s (CLSH.C) Q4 retail numbers are any indication, then large numbers of Nevada’s unemployed population have decided to do just that. The company pulled in $1.5 million in revenue with a margin of 54.3% in Q4 2020, despite economic calamity brought by heavy COVID-19 restrictions in Nevada.
At first glance, one would think that these numbers were nothing to write home about, but these Q4 results are strong for a company operating in a state suffering one of the heaviest hits of the pandemic.
“Our achievements in November wouldn’t have been possible without the dedication and great work of all members of our team. We also operated one less day in November to allow our team to enjoy the Thanksgiving holiday with their families. We’re looking forward to a strong finish to 2020,” said Andrew Glashow, president and COO of CLS Holdings USA.
The COVID-19 pandemic has put regulators in a peculiar situation where they have to balance economic survival with constituent safety, and nowhere is that pressure felt more acutely than Nevada.
Their entire economy is based on outside visitors and the pandemic has forced their Governor Steve Sisolak to place restrictions on public gatherings in Las Vegas casinos due to bounces and spikes in COVID-19 cases last month. They rolled back occupancy limits in casinos, restaurants and bars to 25% from 50% and reduced the cap on public-gathering sizes, including at entertainment venues, to 50 people from 250. Nevada presently has a 13% unemployment rate, which is the second in the United States behind Hawaii.
Sisolak is doing the sensible thing here, especially given that the state set an all new record for 2,416 new cases in one day last month, which threatens to tank their overtaxed health-care system.
Tourism is stifled, but CLSH’s retail division, Oasis Cannabis and their wholesale division, City Trees, have doubled down on the local community with promotional prices in response to the economic challenges. November also included the highest Black Friday retail numbers for the company, pulling in $50,487.
CLS Nevada November 2020 financial highlights:
- November 2020 net revenue increased by 38.9% over November 2019, while Gross Margin increased by 8.1% over the same time period. These results also represent a 112% increase in net revenue over November 2018.
- The average order size at Oasis Cannabis increased by 47.1% over November 2019, from $37.35 to $54.93 in November 2020.
- Oasis Cannabis saw a 27% year over year increase in single day sales on Black Friday compared to 2019.
- CLS wholesale division, City Trees, released a new limited edition concentrate product with renowned regional cultivator, State Flower.
The company’s October figures improved by 32% over their figures from the previous year. They outpaced statewide industry growth, and increased their net revenue by over 74% for the same time period, according to industry analysts BDS Analytics. Trends showed a 27% increase in sales in concentrates in October over 2019 as well, which comes as welcome news to the company as they expand their extraction and branding operations.
Admittedly, it’s mixed news. Cannabis is up while the rest of the state is down. But hopefully the vaccine rolled out earlier this month gets produced to scale fast enough that we can curtail any lasting damage and find a suitable new normal that works for everyone.