California marijuana producer TPCO Holding Corp., better known as Parent Company, beat estimates for quarterly revenue on Monday, August 16, as demand exploded for THC-infused products during the pandemic. The Jay-Z-backed company also said Clorox Co., executive Troy Datcher would replace Steve Allan as its chief executive officer without giving a reason for the change. Formed earlier in the year with the merger of a blank-check firm and three Californian cannabis companies, TPCO sells edibles, vape concentrates, and other smoking accessories.
The marijuana industry has seen an increase in sales during the pandemic as people turn to cannabis for relaxation and entertainment, while hopes of U.S. federal legalization of marijuana have also benefited the sector. Parent Company has tried to capitalize on the increased demand by expanding its wholesale distribution network, which now spans more than 450 dispensaries in California. The company also announced the purchase of a consumer delivery hub in Sacramento on Monday for an undisclosed amount, a move that is expected to help extend its reach to about 70% of California’s population.
The new hub will service about 2.4 million more residents of the greater Sacramento area. Net sales from the quarter were $54.2 million, more than a Refiniteve IBES estimate of $50.7 million, thanks to strong growth in the company‘s direct-to-consumer and wholesale businesses. The company says it expects to shift sales to more higher-margin product categories, with a goal of driving stronger direct-to-consumer sales. It’s amazing to see how much business is booming for Parent Company, who knows what’s in store, and what their next moves will be.