(Reuters) - Californian pot producer TPCO Holding Corp, better known as Parent Company, beat estimates for quarterly revenue on Monday as demand surged for weed-infused products during the pandemic.
The Jay-Z-backed company also said Clorox (NYSE:CLX) Co executive Troy Datcher would replace Steve Allan as its chief executive officer, without giving a reason for the change.
Formed earlier this year with the merger of a blank-check firm and three Californian cannabis companies, TPCO sells edibles, vape concentrates and other pot-related products.
The cannabis industry has seen a boom in sales during the pandemic as people turned to marijuana for relaxation and entertainment, while hopes of U.S. federal legalization of weed have also benefited the sector.
TPCO has tried to capitalize on the demand surge by expanding its wholesale distribution network, which now spans more than 450 dispensaries in California.
It also announced the purchase of a consumer delivery hub in Sacramento on Monday for an undisclosed sum, a move that is expected to help extend its reach to about 70% of California's population.
Net sales for the quarter were $54.2 million, more than a Refinitiv IBES estimate of $50.7 million, thanks to strong growth in the company's direct-to-consumer and wholesale businesses.
TPCO said it expected to shift focus to more higher-margin product categories, with a goal of driving stronger direct-to-consumer sales.
Its strong results were mirrored by multi-state cannabis operator Ayr Wellness Inc, which raised its annual outlook after posting a more than threefold rise in second-quarter revenue.
Ayr also said it would acquire Cultivauna LLC, the owner of Levia-branded cannabis-infused seltzers and water-soluble tinctures, for $20 million in cash and stock.