CLS Holdings USA, Inc.

CLS Holdings said Q3 fiscal 2022 revenue was $5,588,266, up 23% from $4,544,082 in Q3 fiscal 2021. Consolidated gross margin was 51.7% versus 45.2% a year ago. City Trees revenue was $2,255,037, up 94.4% from $1,159,940, with gross margin improving to 56.0% from 39.5%. Oasis revenue was $3,333,229, down 1.5% from $3,384,138, while dispensary transactions rose 5.2% to 66,016 from 62,754. For the first nine months, revenue was $16.5 million, up 24.7% from $13.2 million, and gross margin was 51.6% versus 51.0%. Management did not provide formal quarterly or full-year financial guidance, but said it expects first harvests from the Tribal partnership in Q3 and Q4, pre-roll automation to begin June 1, and a goal of 150,000 pre-roll units per month once ramped.

Jeffrey Binder struck an upbeat, long-term tone, saying the company has “consistently grown revenue,” “dramatically narrowed our losses,” and maintained margins. He emphasized community involvement, organic growth, and a “high” future for CLS, while calling out the company’s broad Nevada distribution and the importance of operating responsibly in a difficult industry. His remarks focused more on culture, resilience, and the privilege of operating in cannabis than on detailed financials.

Charlene Soco focused on the reported numbers: Q3 revenue of $5.588 million, 23% growth year over year, and consolidated gross margin of 51.7%, up from 45.2%. She also highlighted City Trees’ revenue surge to $2.255 million and margin expansion to 56.0%, while Oasis posted $3.333 million in revenue and a small margin improvement to 48.7%. For the nine-month period, revenue reached $16.5 million and gross margin improved modestly to 51.6%. She did not discuss cash balances, debt, or capital allocation specifics on the call.

Analysts asked how CLS is taking share in a tougher Nevada market, and management answered that real-time dispensary data, aggressive but selective purchasing, and vendor relationships are helping it offer better pricing and attract more traffic. On demand and pricing, Andrew Glashow said he does not think end-market demand has bottomed, but customers are more price-sensitive; he noted basket size is down about 5% to 6% while customer traffic is up about 5% to 6%. On City Trees, management said the momentum is sustainable because of its production facility, shelf presence in over 70% of Nevada dispensaries, rising order rates, and repeat business from both its own brand and third-party brands.