Jay-Z-backed Parent Company's revenue beats on hot weed demand

Aug 16 (Reuters) – Californian pot producer TPCO Holding Corp, better known as Parent Company, beat estimates for quarterly revenue on Monday, helped by surging demand for weed-infused products.

The cannabis industry has seen red-hot sales after people turned to marijuana during the pandemic for relaxation and entertainment, while hopes of U.S. federal legalization of weed have also benefited the sector.

Backed by rapper Jay-Z, TPCO was formed earlier this year with the merger of a blank-check firm and three Californian cannabis companies. It sells edibles, vape concentrates and other pot-related products from a range of brands including Monogram by Jay-Z, Deli, Fun Uncle and Mirayo.

On Monday, TPCO said it now has a wholesale distribution network of more than 450 dispensaries in California, and also announced the acquisition of an extra consumer delivery hub in Sacramento.

The new hub will service 2.4 million more residents of the greater Sacramento area, expanding TPCO’s service availability to about 70% of California’s population, the company said in a statement.

Net sales for the reported quarter stood at $54.2 million, surpassing Refinitiv IBES estimates of $50.7 million, thanks to a 7.2% growth in the direct-to-consumer business and a 22.6% jump in wholesale.

TPCO also said it expects to shift sales to more higher-margin product categories, with its focus on driving stronger direct-to-consumer sales. (Reporting by Arunima Kumar in Bengaluru; Editing by Devika Syamnath)