LAFAYETTE — Indoor cannabis agriculture engineering and dispensary design firm Urban-gro Inc., (Nasdaq: UGRO) saw its sales tumbles and losses mount in the fourth quarter of 2022.
The company posted sales of $17.3 million in the most recently completed quarter, down from $19 million in the fourth quarter of 2021.
“This decrease from the prior year period was driven by lower equipment systems revenue of $13.3 million, primarily reflecting significantly reduced equipment demand in the U.S. cannabis market as a result of ongoing state-level regulatory delays in the license-awarding process, as well as the lack of movement on passing key legislation impacting the industry,” the company said.
Those negative impacts were partially offset by new revenue generated by the acquisitions of Houston-based engineering firm Dawson Van Orden Inc. and Georgia-headquartered 2WR+ Partners LLC, the parent company of architecture and interior design firm MJ12 Design Studio.
Urban-Gro recorded a 2022 fourth quarter net loss of $4.2 million, compared to a net loss of $600,000 in the same period of 2021.
While year-over-year sales were up slightly for the full 2022 fiscal year — $67 million compared to $62.1 million — net losses grew from $900,000 in 2021 to $15.3 million in 2022.
Despite this performance, UB CEO Bradley Nattrass said that “2022 was a successful year for Urban-gro.”
In a prepared statement, Nattrass said, “Despite headwinds we encountered in the cannabis sector, we continued to execute our long-term strategy by adding new capabilities and expertise to our business both organically and through the acquisitions of the construction management company, Emerald, and the engineering firm, DVO.
“Further, we advanced the business forward by successfully expanding our reach in terms of diversifying both our markets and service capabilities. We strengthened the depth in our leadership team both through our acquisitions and with the appointment of a new, design-build experienced COO, and marked our geographic expansion with the opening of our first European office. Our unique value-added model, which includes our talented team of experts, integrated solutions, and sector diversification, differentiates us as a company that can continue to deliver growth in a turbulent environment.”
Looking ahead, Urban-gro expects revenues of $100 million to $120 million in 2023.