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A Look at Greenlane Holdings’ Risk Factors
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A Look at Greenlane Holdings’ Risk Factors

Greenlane Holdings Inc. (GNLN) sells cannabis accessories, cannabis compound cannabidiol (CBD), liquid nicotine products, as well as other house brands.

Let’s take a look at the company’s latest financial performance and risk factors. (See Greenlane Holdings stock charts on TipRanks)

Greenlane’s Financial Performance

Total revenues were $34.7 million in Q2, up 7.1% year-over-year. Core revenues, or non-nicotine revenues, increased 14.9% to $34.5 million, while Greenlane Brands’ revenues came in at $9.0 million, up 62.5% year-over-year.

The gross profit margin was 22.4% in Q2 versus 21.0% in the year-ago quarter.

Greenlane Holdings’ Risk Factors

According to the new Tipranks Risk Factors tool, Greenlane’s main risk category is Legal & Regulatory, which accounts for 27% of the total 88 risks identified.

Greenlane has updated its risk profile to introduce one new risk factor under the Tech & Innovation category.

Under the Technology sub-category, the company said, “The implementation of new ERP system could create significant disruptions to our business.”

The company announced in 2020 that it has started implementing a new multi-year enterprise resource planning (ERP) system to replace the company’s other existing key financial systems.

Though the ERP installation is scheduled to be finished in 2021, the firm highlights that due to the project’s complexity and resource requirements, the implementation could be delayed.

Greenlane further warns that if the new ERP system’s deployment in the United States and Europe is delayed, the firm would experience significant interruptions, which will negatively impact its financial performance.

On the brighter side, the overall sector average for the Finance & Corporate risk factor is 39%, higher than the average risks in that category for Greenlane, which is 23.9%.

Analysts’ Take

On September 1, Greenlane announced the completion of its merger with KushCo Holdings, a provider of ancillary products and services to the legal cannabis industry.

In response to the merger, Cowen analyst Vivien Azer initiated a Buy rating on the stock with a price target of $5 (90.1% upside potential).

Azer commented, “Combined, the company will be a clear leader in the ancillary cannabis space where distinct customer bases should provide a platform for cross-selling opportunities and scale in addition to cost efficiencies.”

Overall, the stock has a Moderate Buy consensus rating based on 2 Buys.

The average GNLN price target is $5.50, reflecting 12-month upside potential of 109.1% from current levels. 

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