Cannara Biotech Revenues Rise as Expansion Brings in More Profit

Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) posted meaningful rises in net revenues for its fiscal second quarter results ending Feb. 28.

The vertically integrated Canadian producer reported a 76% revenue increase, reaching $13 million, compared to the same period last year. The increase is attributed to the company’s expanding workforce and increased growing capacity.

“In the past quarter, Cannara achieved unprecedented revenue, bolstered gross profits, and enhanced adjusted EBITDA, reflecting our unwavering commitment to executing the growth strategy we envisioned from the start,” president and CEO Zohar Krivorot said in a statement. “Our market share has made significant strides in

According to estimated sales data from Trellis Distribution Insights, Cannara achieved a market share of 9.3% in Quebec and 3% in Ontario in March 2023. The company said success in these areas is due to product quality and customer satisfaction. The company is set to launch 17 new SKUs in Ontario this summer and is preparing to enter the Alberta market.

“When compared to the second quarter of 2022, our financial performance across all metrics has seen substantial improvement,” CFO Nicholas Sosiak said. “This remarkable growth led to the expansion of our workforce, which was crucial in activating additional growing zones.”

Cannara reported a positive operating income of $600,000 for the quarter, an increase of 250% compared to the same period in 2022.

In addition, the company delivered its eighth consecutive quarter of positive adjusted EBITDA, reporting $3.2 million for the quarter, a 1500% increase compared to the same period in 2022, and $4.9 million for the first half of fiscal year 2023, a 346% increase compared to the same period in 2022.

The net loss for the quarter was $600,ooo – a 50% improvement versus a net loss of $1.2 million for the same period in 2022. However, without the $1.4 million inventory write-down, the company would have achieved a net income figure of $800,000 for the quarter.

Cannara also reported an increase in free cash flow, with $1.9 million for the quarter, up 850% compared to the same period in 2022, and $3.8 million for the first half of fiscal year 2023, a 171% increase compared to the same period in the prior year.

The company has $25.6 million in working capital as of Feb. 28, including $4.1 million of cash on hand.

In addition to expanding its market share, Cannara designed and launched a new line of apparel and accessories for sale on its platform. The initiative is aimed at diversifying its revenue streams and catering to a broader audience.

And as the company continues to “purposively build out our product offerings across our three flagship brands and enter new markets,” Krivorot said, the company also launched an online community channel to engage and support their customers.

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