Vireo Growth Inc. (CSE: VREO; OTCQX: VREOF) has released its first quarter 2025 results, showing stable performance across its established markets and setting the stage for a significant transformation through upcoming merger transactions. The company, which has its roots in medical cannabis and now operates in several U.S. states, continues to focus on operational discipline while preparing to expand its footprint.
For the quarter ending March 31, 2025, Vireo reported revenue of $24.5 million, a 1.9 percent increase from the $24.1 million recorded in the same period last year. This growth, while modest, reflects the company’s ability to maintain momentum in a challenging and evolving sector.
Gross profit for the quarter reached $12.4 million, up slightly from $12.2 million a year ago, resulting in a gross margin of 50.6 percent, nearly unchanged from the prior year. The company’s adjusted EBITDA, a key measure of operational performance, rose to $6.6 million from $6.1 million, representing an 8.5 percent increase and a margin improvement to 26.8% from 25.2%.
Operating income, however, saw a notable decline, dropping to $2.0 million from $4.8 million in the previous year. This shift was largely due to an increase in selling, general, and administrative (SG&A) expenses, which climbed to $7.5 million, up 6 percent year-over-year. As a percentage of sales, SG&A expenses rose to 30.5 percent from 29.3 percent.
Vireo’s CEO, John Mazarakis, described the quarter as in line with expectations, highlighting continued growth in Maryland and a steady showing in Minnesota. New York presented a mixed picture, with medical sales declining but adult-use sales beginning at the company’s indoor facility. This development in New York’s adult-use market could offer new growth opportunities as the segment matures.
The company’s focus now turns to closing its pending merger transactions, which are expected to begin in the second quarter. These deals are anticipated to enhance Vireo’s profitability profile and market reach.
As of March 31, Vireo reported total current assets of $128.5 million and cash on hand of $86.3 million. The company’s current liabilities stood at $13.3 million, providing a solid liquidity position as it moves forward with its merger strategy. Vireo had 472,078,412 shares outstanding at quarter-end, based on a share price of $0.45.
On March 21, 2025, Vireo announced it had filed its Definitive Information Circular for its proposed merger transactions. These include the acquisition of Wholesome Cannabis and the Arches technology platform in Utah, for which regulatory approvals have already been secured. The company has also received the necessary shareholder approvals and is working to satisfy the remaining closing conditions. Management expects these transactions to close during the second quarter of 2025.
The mergers are expected to provide proforma financial benefits, with details available in the company’s filings. The integration of these businesses is likely to further strengthen Vireo’s operational base and support its long-term strategy.
Vireo Growth Inc. remains positioned to capitalize on opportunities in both medical and adult-use cannabis markets. The company’s approach, which is to empower local market leaders and maintain a disciplined capital allocation, has helped it navigate a complex regulatory environment and shifting consumer demand.
For those interested in a deeper dive into Vireo’s first quarter results, the company will host a conference call and webcast for analysts and investors. Details are available on the company’s investor relations website https://investors.vireogrowth.com.
