TREES Corp (Colorado) (CANN)·Q4 2019 Earnings Summary

Executive Summary

• General Cannabis (CANN) guided to record FY 2019 revenue of approximately $6.0 million, up “more than 30%” year over year, while delaying the 10‑K filing to no later than May 14, 2020 due to COVID‑19 disruptions .
• Management executed a strategic pivot: expanding Next Big Crop (NBC) and discontinuing the Security (Iron Protection Group) and Consumer (Chiefton, STOA Wellness) segments to focus capital on higher‑margin operations; CFO Brian Andrews retired, with Controller Jessica Bast expanding responsibilities and later appointed PFO/PAO .
• FY19 narrative emphasized acquisition pipeline enabled by Colorado HB‑1090 and cultivation asset purchases (e.g., SevenFive Farm; multiple term sheets), with financing steps including note exchanges, warrants and refinancing to strengthen the balance sheet .
• No earnings call transcript was filed for Q4 2019; Wall Street consensus estimates via S&P Global were unavailable for this microcap at the time of inquiry (see Estimates Context) .

What Went Well and What Went Wrong

What Went Well

• “General Cannabis Corp enjoyed record revenue in 2019… expect to report revenues… approximately $6.0 million, up more than 30% from the prior year,” led by NBC cultivation consulting; management highlighted NBC’s market share gains in design, construction and management .
• Q3 activity showed strong Operations momentum: segment revenues rose 142% year over year to $834,334, with Operations division profitable year‑to‑date; management cited licensing consulting, additional management contracts, and expanded grow design/build .
• Strategic repositioning: “plans to expand operations around… Next Big Crop… while shedding several non‑core business units,” and repayment/refinancing actions to strengthen the balance sheet ahead of 2020 growth plan .

What Went Wrong

• Security segment headwinds persisted: clients “forego guard services” and slower‑than‑expected California growth, producing continued revenue declines and pressured cost of services .
• Consumer segment softness: Chiefton revenue weakened; STOA early ramp; management cut Consumer overhead by ~$350–400K to right‑size costs amid lower product sales and mix shift toward lower‑margin products .
• COVID‑19 disruptions: limited facility access and delayed collaboration with auditors forced the company to rely on SEC’s 45‑day relief to postpone the FY2019 10‑K filing .

Financial Results

Note: Q4 2019 specific quarterly figures were not disclosed in the filings reviewed. FY 2019 revenue commentary and prior quarters are shown for trend context.

Revenue, Net Loss, and Loss per Share (prior quarters)

Segment Revenue Breakdown (prior quarters)

FY 2019 Context

KPIs and Margins

Guidance Changes

Earnings Call Themes & Trends

No Q4 2019 earnings call transcript was available. Themes tracked across Q2 press release, Q3 press release, and Q4 stockholder letter:

Management Commentary

• “General Cannabis Corp enjoyed record revenue in 2019… approximately $6.0 million, up more than 30% from the prior year, led especially by… Next Big Crop (NBC)” — Stockholder letter, March 30, 2020 .
• “Plans to expand operations around… Next Big Crop… while shedding several non‑core business units” — Press release, January 3, 2020 .
• “Security revenues have continued to be negatively impacted by customers deciding to forego guard services and slower than expected growth in California” — Q3 press release, November 8, 2019 .
• “Equipment and product sales continue to rise; increased revenue from licensing application consulting; additional management contracts; expansion of… grow facility design and construction” — Q3 press release, November 8, 2019 .

Q&A Highlights

• No earnings call transcript or Q&A was filed or found for Q4 2019; investor communications for the quarter occurred via the March 30, 2020 8‑K and stockholder letter .

Estimates Context

• Wall Street consensus estimates via S&P Global (EPS, revenue) for Q4 2019 were unavailable at the time of inquiry due to coverage/technical limitations; therefore, no beat/miss analysis versus consensus can be provided .

Key Takeaways for Investors

• FY2019 marked a revenue record (~$6.0M expected), driven by NBC; the pivot to NBC should improve mix and margins versus prior multi‑segment model .
• Strategic exit of Security and Consumer businesses reduces complexity and near‑term drag, freeing capital and attention for core consulting and acquisition‑driven operations .
• Colorado HB‑1090 creates a structural opening for public‑company ownership of cannabis assets; term sheets and the SevenFive Farm acquisition efforts signal an acquisitive strategy in 2020 .
• Balance sheet actions (note exchanges, warrants, refinancing) plus continued overhead reductions indicate a focus on liquidity and financial flexibility ahead of asset purchases .
• Security and Consumer exits reflect candid assessment of segment economics; expect reduced volatility from guard services cyclicality and consumer product margins/working capital intensity .
• COVID‑19 introduced reporting delays and operational risks; the firm relied on SEC relief for its 10‑K timing—monitor execution cadence and any further pandemic‑related impacts .
• With no Q4 call or consensus, stock reaction will hinge on disclosed 10‑K details, evidence of closing acquisitions, and NBC contract flow; near‑term trading likely sensitive to capital raises and regulatory approvals .