Last year may have been tumultuous for most of us, but for Inner Spirit Holdings Ltd. (Inner Spirit), the gloomy clouds had a silver lining. According to financial results released last week, the company reported an increase in system-wide retail sales of 258% over 2019, bringing in a cool $105.3 million across all franchised and corporate-owned stores.
“Inner Spirit certainly didn’t experience anything near a normal retail environment in 2020 due to the ongoing pandemic,” said Darren Bondar, President and CEO of Inner Spirit. “Our Spiritleaf franchise partners and employees have been instrumental in keeping the organization focused and able to serve our communities and our customers to the best of our ability and in a safe manner at all times. These efforts enabled us to achieve many goals in 2020 as we became the largest single-brand cannabis retailer in the country while delivering a truly authentic Spiritleaf experience to our customers.”
In the 2020 financial year, Inner Spirit not only achieved its goals but blew some of its previous records out of the water. In 2019, the company reported total revenue of only $7.8 million, while the following year, revenue skyrocketed to $26.8 million. This translates to a gross profit of $12.7 million, more than three times higher than in 2019.
The substantial increase in revenue and profits are credited to a few factors. First, Inner Spirit opened 30 stores in 2020, expanding its retail footprint through corporate-owned and franchised locations in British Columbia, Alberta, Saskatchewan, Ontario, and Newfoundland and Labrador. This helped bump up system-wide sales, and franchise royalties and advertising fees collected from franchisees added $4.2 million to the company’s coffers. On top of that, Inner Spirit managed to pare down operating losses before expenses from $6.4 million in 2019 to just $0.1 million in 2020, bringing its total net loss to $3.1 million, compared to $11.3 million the year before.
“We’re able to expand the Spiritleaf network organically due to the support and dedication of our franchise partners, employees, customers, strategic partners, and investors,” said Bondar. “We have developed a strong business model that attracts entrepreneurs to invest their hard-earned capital in the Spiritleaf opportunity and to represent the brand in their communities.”
The company reports that as of April 1, there are a total of 82 Spiritleaf locations across the country, including 25 in Ontario, with more on the way, and they hope to have 100 stores by the end of 2021.
Photo credit Aaron Kurmey.