AFC Gamma posts $20.9M net income for 2023 despite fourth quarter loss

Florida-based cannabis financier AFC Gamma Inc. (Nasdaq: AFCG) this week reported a $20.9 million net income for all of 2023, despite losing $9.2 million in the final three months of the year.

The profit allowed the marijuana-focused financial lender to announce distributable earnings for shareholders of $41.4 million for 2023, or $2.04 per common share. For the fourth quarter, AFC Gamma distributed $9.8 million in dividends, it reported, and for the full year, it distributed $40.9 million in dividends.

Annual net income levels dropped precipitously compared to 2022, however, when the company reported profit of $35.9 million. The company didn’t also offer any explanation for the fourth-quarter swing to a nearly $10 million loss after posting $8 million in net income for the third quarter.

Revenues were also down substantially year-over-year for the fourth quarter, to $15.9 million from $19.7 million in 2022.

Still, newly minted CEO Daniel Neville – who just joined AFC Gamma in October – said the company “has made significant progress on portfolio management initiatives in the fourth quarter and into 2024 in spite of a challenging cannabis backdrop.”

Neville said that in the coming year, AFC Gamma will focus on a “return to being a pure play cannabis lender following the completion of the spin-off of our commercial real estate portfolio.”

“We continue to see lending opportunities with the emergence of Cannabis 3.0 operators that have clean capital stacks and are looking to build or expand,” Neville said in a release. “As an early mover and one of the leading debt providers in the cannabis industry, AFC Gamma is uniquely positioned to capitalize on these opportunities and deploy capital at attractive risk-adjusted returns.”

At the close of the year, AFC Gamma had $466.5 million in total assets, including $121.6 million in cash, against $146.5 million in total liabilities.

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