Auxly Cannabis Group Inc. reported $43.4 million in net revenues from cannabis sales in the three months ended June 30, 2024, and net income of $2 million in its Q2 2024 report.
Net revenues were up 33% over the same period of 2023, which Auxly attributes to its increased focus on the sale of cannabis flower and vape products. This was partially offset by what it says was price compression in the adult-use recreational market.
This is the second in the past eight quarters that the company has reported net income rather than a net loss.
Net income increased 116% from Q2 2023, which the company says is mostly due to improved operational stability from the consolidation of its dried flower and pre-roll manufacturing to the Auxly Leamington greenhouse facility following the sale of its Ottawa facility.
In addition to its wholesale bulk cannabis sales, the company sells cannabis products under the brands Parcel, Back Forty, Foray, Dosecann, and Kolab Project, including dried flower, pre-rolls, vapes, edibles, and concentrates. It sells products in all Canadian provinces and two territories, Yukon and the Northwest Territories.
In May 2024, Auxly also launched its first branded product in Quebec: Back Forty large format 0.75g three-pack pre-rolls.
Although Auxly’s offices are based in Toronto, the company’s primary cannabis facility is in Charlottetown, PEI, for cannabis processing, analytical testing and research under the federal Cannabis Act. Auxly also operates a cultivation and processing facility in Leamington, Ontario. In May 2024, it sold its Auxly Ottawa facility for $1.7 million.
The company does not have any currently active international operations.
Excise taxes on Auxly’s $43.3 million in sales for the three months ended June 30, 2024, were $14.3 million. The Company says it will have insufficient cash to fund its operations for the next 12 months if its sales do not improve or decline.
In a company press release, Hugo Alves, CEO of Auxly, commented: “After our best start to a year ever, we are thrilled to report our best Q2 in history, with exceptional financial performance setting a new Q2 record in revenue and all-time records in gross margin and adjusted EBITDA. Our commitment to product quality, innovation and operational efficiency continues to drive our success. We are particularly proud of our significant gains in market share across all three of our core product categories, especially in the vapor segment where we are currently leading the growing all-in-one category, securing an impressive 32% share of the market.
“This success is a testament to the collective efforts of our talented and dedicated employees, who work hard every day to create quality cannabis products that help our consumers live happier lives. We will be expanding the all-in-one vape portfolio with new flavour profiles under Back Forty throughout the second half of the year, while also launching a new innovative vape format under our Kolab Project brand, available in September. These achievements reflect our drive for continued growth and innovation, our dedication to reaching new financial milestones and delivering exceptional results for our shareholders. As we look ahead, we remain passionately committed to our consumers, focused on surpassing expectations, leading with excellence and achieving sustainable, profitable growth.”
