Cannara Biotech Inc. announced its fiscal third quarter 2024 financial and operating results for the three and nine-month periods ended May 31, 2024, with $19.5 million in revenue and just over $2 million in net income.
Just under $1 million of the company’s net revenue in Q3 2024 came from its two Quebec cannabis operations, with the rest from its real estate operation.
Cannara owns and operates two Quebec‐based cultivation facilities. The first, in Farnham, is 635,000 sq ft, of which 170,000 sq ft is licensed for cultivation and 414,000 sq ft of leased warehouse space.
The second, a greenhouse facility in Valleyfield, is home to 600,000 sq ft of growing space and a 200,000 sq ft rooftop greenhouse.
Cannara sells products under the brands Tribal, Nugz, and Orchid CBD, under which they sell an array of dried flower, vapes, concentrates, pre-rolls, and accessories. The company reports a 9.7% market share in Quebec, 2.9% in Ontario, 3.13% in Alberta, 0.82% in BC and 0.40% in Saskatchewan in the most recent quarter.
Out of the $26 million in revenue from cannabis sales in Q3 2024, the company owed just over $8 million in excise tax. Although revenue after tax was still $18.3 million, operations costs and expenses pared this down to $992,177 in net income.
This was a decrease from the same quarter in 2023, which saw $20 million in revenue from sales of goods from its cannabis operations but just under $4.2 million in net income from cannabis operations. This was due to much higher segment operating income and lower losses from changes in fair value of inventory sold.
“The cannabis industry is navigating a highly competitive landscape with significant price compression due to challenging conditions,” stated Nicholas Sosiak, Chief Financial Officer of Cannara.
“Despite these pressures, Cannara’s resilience is evident in our increased net revenues of $19.5 million versus this time last year and our thirteenth consecutive quarter of positive Adjusted EBITDA, totalling $2.8 million this quarter. We also achieved an operating income of $3.6 million and generated $1.2 million in free cash flow this quarter. While price compression has impacted our growth quarter over quarter, we believe current industry conditions are unsustainable for many of our competitors with less scale and higher costs.
“We fully expect a return to stronger pricing and demand as those who cannot compete cease to operate. Cannara’s ability to generate positive cash flows in this environment helps us navigate these dynamic market conditions and is a testament to our strength to succeed. We are investing in sales and marketing to expand our distribution and capture more market share from competitors, setting the stage for future success as market conditions improve. Our focus remains committed to profitable growth and steady cash flow, delivering high-quality, innovative products to Canadians through our leading brands.”
