Cannara Biotech’s Q3 2024 Results: 27.6% Revenue Surge and Positive Net Income
The TDR Three Key Takeaways on Cannara Biotech’s Q3 2024 Financial Report:
- Significant Revenue Increase: Gross cannabis revenues rose by 27.6% to $26.2 million, driven by new provincial entries and product launches.
- Beats 2023 Revenue in 9 Months: Gross cannabis revenue is higher than FY 2023 already.
- Canadian Market Remains Highly Competitive: Gross Profit Margins decreased from 38% in Q3 2023 to 29% in Q3 2024
Cannara Biotech Inc.(TSXV:LOVE, OTC:LOVFF) Q3 2024 financial results highlight a strong performance with a significant 27.6% increase in gross cannabis revenues, reaching $26.2 million. Net revenues, after excise taxes, also saw a substantial rise to $19.5 million, a 22.6% increase from the previous year. This growth is attributed to Cannara’s strategic expansion into new provinces and the introduction of new SKUs. The company has already surpassed 2023 FY Revenue of $57.26M in nine months, with 2024 FY revenue of $58.56M.
Cannara achieved its thirteenth consecutive quarter of positive Adjusted EBITDA at $2.8 million. Operating income for the quarter was $3.6 million, reflecting strong cash flow generation and strategic cost management. The company had overall positive net income for both the last quarter and for the overall first nine months of the year. The positive net income was net income after all taxes and expenses were paid without adjustment.
The Canadian market place though is still highly competitive. The one challenge for investors to watch is the sliding Gross Profit Margins. Gross profit percentage before fair value adjustments in Q3 2024 was 29% compared to 38% in Q3 2023. This has been attributed to an increase in the cost of goods sold and pressure on margins.
Progress in Cannara’s Strategic Plan included:
- Cannara received approval from the Manitoba Liquor & Lotteries Corporation to sell its cannabis products in Manitoba in March 2024. By the end of May 2024, Cannara completed its first sale in the province with 35 product listings.
- Cannara completed its latest pheno-hunt program, introducing three new genetics for its brands: Neon Sunshine and Bubble Up under Tribal, and Guava Jam under Nugz. The company is now focusing on its FY 2025 pheno-hunt program to discover more exotic genetics.
- In January 2024, Cannara’s Board decided to sell an unused parcel of land and an adjacent building under construction at its Valleyfield site. On April 24, 2024, the land was sold for $2.1 million, resulting in a $2.0 million gain, while the building is still being marketed.
- Cannara launched its Tribal Cuban Linx pre-rolls with the Nova Scotia Liquor Corporation (NSLC) for a 4/20-themed promotion. Following its success, the NSLC accepted the SKU and plans to introduce a 28g offering of Cuban Linx in early Fall 2024, with more SKUs expected in the future.
- In Q3 2024, Cannara’s unique brand portfolio led to a positive consumer response, especially in Quebec, where market share increased from 7.8% to 11.6% by June. Cannara plans to focus on strategic production expansion, product innovation, and enhancing distribution and sales velocity in its provincial portfolios.
Cannara Biotech’s Q3 2024 results show strong growth and progress in the company’s strategic plan within the highly competitive Canadian market.
