- Net revenue, increased to $19.7 million in Q2 2024 from $13.0 million in Q2 2023, a 51.0% increase.
- Gross profit, before fair value adjustments, increased to $7.1 million in Q2 2024 from $4.0 million in Q2 2023, a 77.2% increase.
- Delivered a twelfth consecutive quarter of positive Adjusted EBITDA1 of $3.5 million.
All financial results are reported in Canadian dollars, unless otherwise stated.
MONTREAL, QUÉBEC – April 29, 2024 – Cannara Biotech Inc. (“Cannara”, “the Company”, “us” or “we”) (TSXV: LOVE) (OTCQX: LOVFF) (FRA: 8CB0), a ver cally integrated producer of premium-grade cannabis and deriva ve product offerings at affordable prices with two mega facili es based in Quebec spanning over 1,650,000 sq. ., today announced its fiscal second quarter 2024 financial and opera ng results for the three and six-month periods ended February 29, 2024. The full set of condensed interim consolidated financial statements for the three and six-month periods ended February 29, 2024, and the accompanying management’s discussion and analysis can be accessed by visiting the Company’s website at investors.cannara.ca, and/or accessing its profile pages on SEDAR+ at www.sedarplus.ca.
“This past quarter, despite a challenging market environment, Cannara continued to demonstrate continued positive execution towards becoming one of the leading cannabis companies in Canada. With our tenth grow zone now opera onal, our annual produc on capability has increased to 33,500 kg, underlining our dedica on to increasing capacity to meet the growing market demand for our product,” expressed Zohar Krivorot, President & CEO. “Our footprint is expanding robustly across Alberta and BC, bolstered by the introduction of new SKUs and the approval from the Manitoba Liquor & Lotteries Corporation, paving the way for a stronger market presence in Q3 2024. The outpouring of positive feedback from our diverse clientele across Canada reaffirms our success in delivering unparalleled premium quality at affordable pricing. My gratitude goes to our dedicated team, whose relentless pursuit of operational excellence positions Cannara on our strategic objective of becoming Canada’s premier cannabis producer.”
“I am thrilled to share a remarkable 68% surge in our year-over-year revenues for the six months ended February 29, 2024, a testament to our growing influence in the Quebec, Ontario, Alberta, and BC markets,” noted Nicholas Sosiak, CFO. ” With a sharp focus on efficiency, we’ve seen our gross profit margin increase to 36.3% from 30.9%, alongside a notable 8.7% increase in adjusted EBITDA to $3.5 million and free cash flow2 of $1.2 million in Q2 2024 compared to the negative cash flow in the same period of prior year. Some headwinds were faced this quarter, including a net loss of $3.4 million primarily due to non-cash fair value changes, which is expected to reverse next quarter following improvements in our cultiva on yields, in addition to a minimum adjusted EBITDA covenant breach on our term loan, for which a waiver was successfully obtained in addition to removing this EBITDA covenant from our term loan conditions for future periods. Our proactive steps towards streamlining assets align with our ambition to fortify our financial foundation as we relentlessly stay focused on gaining market share and becoming the leader in Canada, the second largest cannabis market in the world. As for our long-term vision, we do see our future extend beyond our borders where Cannara is a globally recognized brand synonymous with excellence and value in cannabis.”
FINANCIAL HIGLIGHTS & SELECTED FINANCIAL INFORMATION
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CONTACT
Nicholas Sosiak, CPA, CA
Chief Financial Officer
nick@cannara.ca
Zohar Krivorot
Founder & Chief Executive Officer
zohar@cannara.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
ABOUT CANNARA
Cannara Biotech Inc. (TSXV: LOVE) (OTCQX: LOVFF) (FRA: 8CB0), is a vertically integrated producer of affordable premium-grade cannabis and cannabis-derivative products for the Canadian markets. Cannara owns two mega facilities based in Québec spanning over 1,600,000 sq. ft., providing the Company with 100,000 kg of potential annualized cultivation output. Leveraging Québec’s low electricity costs, Cannara’s facilities produce premium-grade cannabis products at an affordable price. For more information, please visit cannara.ca.
CAUTIONARY STATEMENT REGARDING “FORWARD-LOOKING” INFORMATION
This news release may contain “forward-looking information” within the meaning of Canadian securities legislation (“forward-looking statements”). These forward-looking statements are made as of the date of this MD&A and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements with respect to the anticipated benefits of DTC eligibility of the Common Shares and the completion of the Olymbec Share Issuance.
Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to, the Company and its operations, its projections or estimates about its future business operations, its planned expansion activities, anticipated product offerings, the adequacy of its financial resources, the ability to adhere to financial and other covenants under lending agreements, future economic performance, and the Company’s ability to become a leader in the field of cannabis cultivation, production, and sales.
In certain cases, forward-looking statements can be identified by the use of words such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur” or “be achieved” or the negative of these terms or comparable terminology. In this document, certain forwardlooking statements are identified by words including “may,” “future,” “expected,” “intends” and “estimates.” By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in, or implied by, such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors which are discussed in greater detail under “Risk Factors” in the Company’s AIF available on SEDAR+ at www.sedarplus.ca and under the “Investor Area” section of our website at https://www.cannara.ca/en/investor-area.
Other risks not presently known to the Company or that the Company believes are not significant could also cause actual results to differ materially from those expressed in its forward-looking statements. Although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, readers are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Certain assumptions were made in preparing the forward-looking information concerning the availability of capital resources, business performance, market conditions, as well as customer demand. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.
1 Adjusted EBITDA is a non-GAAP financial measure. For more details see the Non-GAAP Measures, Non-GAAP Ra sec on of this news release.
2 Free cash flow is a non-GAAP financial measure. For more details see the see the Non-GAAP Measures, Non-GAAP Ra os and Segment Measures os and Segment Measures sec on of this news release.