Executive Summary

Q3 2022 revenue was $18.9M (+41.0% YoY) with gross margin of 50.6% and adjusted EBITDA of $1.9M; sequentially, revenue fell versus Q2 ($21.1M), but margins held and adjusted EBITDA remained positive .
Net loss widened to $8.4M, driven by higher interest expense ($5.6M) and a $2.1M impairment, despite an improved operating loss of $0.2M versus $4.1M last year .
Management highlighted strong Minnesota margin performance after flower/edibles and increased wholesale volumes in New York; adult-use NY is now “expected next year,” a timing slip from earlier commentary, and the Verano transaction was repudiated with Goodness Growth pursuing damages—key stock reaction catalysts .
No numeric guidance was provided; liquidity improved with cash at $21.8M (vs. $17.0M in Q2 and $8.6M in Q1) aided by delayed draw proceeds .

What Went Well and What Went Wrong

What Went Well

Retail strength ex-Arizona: Retail revenue rose to $16.4M (+60.1% YoY) and wholesale to $2.5M (+56.1% YoY), with MD/MN/NY driving growth; “Margin performance in our home market of Minnesota has been especially strong…” (Kyle Kingsley) .
Margin recovery: Gross margin expanded to 50.6% (vs. 38.3% last year; 49.2% in Q2), aided by discontinuation of Arizona operations and Minnesota product mix .
Adjusted EBITDA turned positive: $1.9M in Q3 (vs. -$1.9M last year) with adjusted EBITDA margin of 10.1% (vs. -14.0% last year) .

What Went Wrong

Net loss widened: Q3 net loss was $8.4M (vs. $6.9M prior year), reflecting higher interest expense and impairment of long-lived assets ($2.1M) .
Other expenses surged: Total other expenses rose to $7.6M (vs. $2.2M last year), primarily due to interest expense on the credit facility and the impairment .
Legal overhang: Verano repudiated the acquisition agreement; Goodness Growth is seeking damages, introducing litigation uncertainty and potential costs .

Financial Results

Metric	Q1 2022	Q2 2022	Q3 2022
Revenue ($USD Millions)	$15.64	$21.09	$18.85
EPS ($USD, basic & diluted)	$(0.11)	$(0.05)	$(0.07)
Gross Margin (%)	15.9%	49.2%	50.6%
GAAP Gross Profit ($USD Millions)	$2.49	$10.37	$9.54
Operating Income (Loss) ($USD Millions)	$(7.76)	$0.31	$(0.19)
Net Income (Loss) ($USD Millions)	$(14.57)	$(6.18)	$(8.42)
Adjusted EBITDA ($USD Millions, non-GAAP)	$(2.61)	$2.33	$1.90
Adjusted EBITDA Margin (%)	(16.7%)	11.1%	10.1%
Revenue YoY (%)	+18.2%	+48.2%	+41.0%

KPIs and Drivers

KPI	Q1 2022	Q2 2022	Q3 2022
Retail Revenue ex-AZ ($USD Millions)	$12.4	$17.0	$16.4
Wholesale Revenue ex-AZ ($USD Millions)	$3.2 (ex-OH)	$2.7	$2.5
Inventory Valuation Adjustments ($USD Millions)	$3.47	$0.06	$0.13
Interest Expense, net ($USD Millions)	$4.60	$5.30	$5.57
Impairment of Long-Lived Assets ($USD Millions)	$5.31	$0.05	$2.11
Cash and Equivalents ($USD Millions)	$8.60	$16.97	$21.84

Notes: Q1 wholesale metric excludes Ohio rather than Arizona; Q2/Q3 retail/wholesale exclude Arizona as discontinued operations .

Actuals vs Consensus (Q3 2022)

Metric	Actual	Consensus	Surprise
Revenue ($USD Millions)	$18.85	N/A	N/A
EPS ($USD)	$(0.07)	N/A	N/A

Consensus estimates from S&P Global were unavailable for GDNSF due to missing mapping coverage; therefore beats/misses cannot be assessed this quarter.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adult-use New York timing	2022–2023	“Could begin in second half of 2022”	“Expected launch next year”	Lowered/Delayed
Revenue/Margins/EBITDA	2022–2023	Not provided	Not provided	Maintained (no numeric guidance)
Capital Expenditure	2022–2023	Not provided	Not provided	Maintained (no numeric guidance)

Earnings Call Themes & Trends

No Q3 2022 transcript was available in the document corpus; the company did host a call on Nov 15, 2022 with webcast details provided . The thematic evolution below is based on management’s press releases.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2022)	Trend
Minnesota product expansion & margins	Began smokeable flower (Mar 1); strong retail performance	Edibles became a tailwind; “margin performance … especially strong”	Strengthening
New Mexico adult-use ramp	Adult-use began Apr 1; expected to contribute to growth	Continued growth cited in operating markets	Positive, stable
New York adult-use timeline & expansion	Expected 2H’22; expansion progressing	“Expected next year” and wholesale volume increases	Slipped timing; operational build-out continues
Legal/regulatory (Verano transaction)	Pending transaction expected to close in Q4	Verano repudiated; GG seeking damages in B.C. court	Negative/legal uncertainty
Product innovation	HiColor™ chews launched in NY; MN gummies launched	Boundary Waters pre-rolls launched	Ongoing brand development
Liquidity	Cash $8.6M (Q1)	Cash $21.8M (Q3), aided by delayed draw	Improving

Management Commentary

“Our third quarter results reflect continued revenue growth across each of our operating markets in Maryland, Minnesota, New Mexico, and New York, as well as consistency of our gross margin performance as compared to the prior quarter.” – Kyle Kingsley, M.D., CEO .
“Margin performance in our home market of Minnesota has been especially strong following the commencement of flower and edibles sales earlier this year…” – Kyle Kingsley, M.D., CEO .
“We reiterate that we believe this termination was unlawful and we will be seeking significant damages through the judicial process in British Columbia.” – On Verano litigation .
“Excluding Arizona operations, we estimate that second quarter pro forma gross margins would have been approximately 55.0 percent.” – Prior quarter context .
“The recent launch of flower sales in Minnesota’s medical market is going exceptionally well… and we also expect the recent transition to adult-use sales in New Mexico to contribute to stronger sales growth…” – Q1 setup .

Q&A Highlights

The Q3 earnings call transcript was not available in the document corpus; however, a call and webcast were held on Nov 15, 2022 (conference ID 2214400), with details and link provided by the company .
No additional Q&A details or clarifications can be cited without a transcript; any guidance commentary should rely on press releases above .

Estimates Context

Wall Street consensus from S&P Global (EPS and revenue) was unavailable for GDNSF this quarter due to missing CIQ mapping coverage; consequently, we cannot assess beats/misses versus consensus. Coverage gaps are common for small-cap/OTC cannabis names [GetEstimates error].
Portfolio implications: Use actual results and trajectory to frame expectations; monitor for any initiation of coverage or mapping updates that could formalize consensus.

Key Takeaways for Investors

Margin recovery is real: Gross margin at 50.6% and adjusted EBITDA positive for a second straight quarter signal operational improvement driven by Minnesota edibles/flower and Arizona discontinuation .
Sequential revenue softness: Q3 revenue of $18.9M trailed Q2’s $21.1M; watch for holiday/Q4 dynamics and NY wholesale traction to re-accelerate .
Interest cost and impairments remain headwinds: Elevated interest expense ($5.6M) and $2.1M impairment widened net loss; refinancing/deleveraging would be a lever for EPS trajectory .
Liquidity improved: Cash rose to $21.8M, supported by delayed draw proceeds; current assets of $53.9M vs. current liabilities of $26.3M provide near-term flexibility .
Legal resolution is a binary catalyst: Verano repudiation and GG’s damages pursuit introduce event risk; case outcome and any strategic alternatives could drive volatility .
NY adult-use timing slipped: From “2H 2022 possible” to “expected next year”; build-out continues with wholesale gains, but revenue ramp timing moved out—adjust expectations accordingly .
Focus on retail/wholesale mix: Sustaining ~$16–17M retail and ~$2.5–2.7M wholesale ex-AZ supports margin resiliency; track MN product mix and NY wholesale volumes for continued strength .

Vireo Growth Inc. (GDNSF)·Q3 2022 Earnings Summary