Advanced Flower Capital, formerly AFC Gamma, (NASDAQ: AFCG) announced its financial results for the fourth quarter and year ended Dec. 31, 2024.

AFC reported a net loss of $1 million, or 5 cents per basic weighted average common share, and distributable earnings of $6.3 million, or 29 cents per basic weighted average common share, for the fourth quarter of 2024. This fell from 2023’s fourth-quarter distributable earnings of $10 million or 49 cents. The company declared a dividend of 33 cents for the fourth quarter, which also fell from last year’s fourth-quarter dividend of 48 cents.

For the full year, the company reported GAAP net income of $16.8 million, or 78 cents per basic weighted average common share, and distributable earnings of $34.9 million, or $1.68 per basic weighted average common share. This was a drop from 2023’s distributable earnings of $41.4 million or $2.04.

The company’s interest income for 2024 was $51.9 million versus 2023’s interest income of $70.2 million. Total expenses fell from $22.3 million in 2023 to $17.2 million in 2024.

The company said in its filing that the interest income decreased by approximately $18.3 million, or 26%, for 2024 versus 2023.

“This decrease was driven by lower interest income of approximately ($17.9) million driven by Subsidiary of Private Company G, Private Company K and Private Company A on nonaccrual status during fiscal year 2024, lower interest income of approximately ($7.7) million driven by less capital deployed relating to loan exits and prepayments, partially offset by higher fee income of approximately $3.8 million driven by loan exits and prepayments during the year ended December 31, 2024, and higher OID income of approximately $3.5 million due to the acceleration of unaccreted OID of current year loan exits and prepayments during the year ended December 31, 2024, as compared to the year ended December 31, 2023, respectively.”

“We believe that the capital supply and demand imbalance in the cannabis sector will remain in the medium-term, given the Republican sweep in November and the lack of progress on Federal reform. This provides the opportunity for AFC to deploy capital into deals with strong risk adjusted returns,” stated Daniel Neville, AFC’s chief executive officer.

He added, “We continue to put capital preservation at the forefront of our investments and remain disciplined on providing debt capital in a challenging environment for operators. As we have done over the last year and plan to do in the coming year, we continue to focus on diversifying our portfolio and providing debt capital to operators who have previous success executing in the cannabis industry.”

AFC told investors that during 2024 it funded approximately $128.8 million of new loans and additional principal, had approximately $53.4 million of principal repayments of loans held at carrying value and sold $90 million in the aggregate of our investments in the Subsidiary of Public Company H and Subsidiary of Public Company M.

On March 11, the company declared a regular cash dividend of 23 cents per common share for the first quarter of 2025. This is a huge drop from last year’s first-quarter dividend of 48 cents per share.

Privately held multistate operator Story Cannabis received a second cash infusion from Florida-based Advanced Flower Capital (Nasdaq: AFCG), formerly known as AFC Gamma, to the tune of $15 million, which it intends to use to fund more expansion in Ohio.

The loan – which was technically awarded to an Ohio-specific subsidiary of Arizona-based Story – comes less than half a year after AFC also loaned Story $41 million to build out operations in Maryland in October.

AFC CEO Daniel Neville said in a press release that Story has proven itself as one of the more creditworthy companies in the U.S. marijuana trade, with a team that has “consistently executed in a volatile cannabis market.”

The new $15 million loan was secured by the value of licenses held by Story in both Ohio and Georgia, along with real estate the company owns in both states, as collateral. The funds will be used to purchase and build out new dispensaries in Ohio, Story said in a release.

Story also has a footprint in New Jersey, according to the company website.

The cash infusion news comes at a time when capital has been scarce for U.S. cannabis companies, with more and more companies choosing to rely on debt financing over selling equity stakes. Those financial struggles have also hit home for AFC, which reported a sharp decline in cannabis industry income in the third quarter last year.

Advanced Flower Capital Inc. (NASDAQ: AFCG), formerly known as AFC Gamma, reported sharply lower third-quarter earnings as profit plunged 91% from the second quarter and 82% year-over-year amid ongoing challenges with problem loans.

The Florida-based real estate investment trust posted net income of $1.4 million, down from $16.4 million in the previous quarter and $8 million in the year-ago period. Revenue fell to $10.5 million, missing the average analyst estimate of $12 million, according to Yahoo Finance data.

The revenue decline was mostly due to having multiple large borrowers on nonaccrual status, according to filings. As of Sept. 30, AFC’s portfolio included loans with aggregate commitments of approximately $349.5 million across 13 borrowers, with the top three borrowers representing about 56.5% of outstanding principal balances. The company maintained $122.2 million in cash and cash equivalents on its balance sheet.

One of the company’s largest borrowers was placed on nonaccrual status in March and subsequently entered receivership in November after its credit facility matured without repayment.

Another significant borrower, Subsidiary of Private Company G, which represents about 21% of loan commitments, was also placed on nonaccrual status.

“One of my top priorities when I joined AFC was to reinvigorate our origination engine, and I am proud to announce that we have surpassed our 2024 target of $100 million in new originations,” CEO Daniel Neville said in a statement.

AFC declared a regular cash dividend of 33 cents per common share for the third quarter, distributing an aggregate of $7.2 million to shareholders. The company reported distributable earnings of $7.2 million, or 35 cents per basic weighted average share.

Analysts expect revenue to decline further in the fourth quarter to $12.19 million, with estimates ranging from $9.8 million to $14.88 million. For the full year 2024, analysts project revenue of $57.35 million, down from $64.18 million in 2023.

The results come after AFC completed the spin-off of its commercial real estate arm into an independent publicly traded REIT, Sunrise Realty Trust Inc., in July. The company distributed one share of SUNS common stock for every three shares of AFC stock held by shareholders, according to filings.

In August, it closed an $11 million senior secured credit facility with Private Company Q in Georgia and expanded existing facilities for BeLeaf Medical and Sunburn Cannabis by $7.3 million combined. In October, it provided a $41 million senior secured credit facility to Story of Maryland, which helped the company exceed its 2024 origination target of $100 million. Most recently, it agreed in November to purchase $10 million in senior secured term loans to Subsidiary of Public Company S.

“This is our second transaction with Story Cannabis, a leading private multistate operator and a great example of the Cannabis 3.0 lending opportunities that we are excited to finance,” Neville said last month. “This is a proven team that knows how to scale and operate in cannabis.”

Neville said the company aims to continue identifying “high-quality operators in key markets” while building on recent momentum.