Decibel reports net loss of $1.8 million in 2023, increased revenue from exports

| Sarah Clark

Decibel Cannabis generated a net loss of $1.8 million in 2023, from $177 million in net sales, with adjusted net income of $8 million, according to its most recently released financial report

The cannabis producer reported that its net revenue for the three and twelve months ended December 31, 2023, were $27.7 million and $116 million, respectively. 

These figures represent an 8% and 46% increase from the same reporting periods in 2022, driven largely by increased demand for cannabis derivative products, the expansion of Decibel’s manufacturing capacity, the launch of the Vox and General Admission Edibles brands, and branded sales to Israel.

Adjusted EBITDA for the same periods was $5.1 million and $25.9 million, respectively, a decrease of 34% and an increase of 49% over the comparative periods. 

Decibel’s net recreational sales in Canada for the three and twelve months ended December 31, 2023, were $24.8 million and $105.8 million, respectively: an increase of 15% and 54% over the same reporting periods in 2022.

International sales for the three and twelve months ended December 31, 2023, were $1.4 million and $3.7 million respectively, compared to $1.9 million in the three and twelve month comparative periods for 2022.

The company also notes that its sales into the Israel market may be impacted by the ongoing Israel-Hamas war and domestic challenges in Israel, such as possible measures to curb international shipments of cannabis to the country.

Decibel recently signed a supply agreement with a new Israeli cannabis company, with the potential for an annual commitment of 1,000 kg of cannabis. 

The company also reports that an Israeli customer defaulted on its payments for cannabis, leading Decibel to provision $1.6 million of receivables, which it is currently pursuing. 

In March of 2024, Decibel expanded its export footprint when it completed its first cannabis export to Australia, and says it has received its first purchase order for vapes to be exported to Australia.

Decibel operates three facilities: one in Creston, BC, one in Battleford, SK, and one in Calgary, AB.  

The company has entered into supply agreements for derivative products with Alberta Gaming, Liquor and Cannabis (AGLC), the Ontario Cannabis Retail Association (OCRA), the British Columbia Liquor Distribution Board (BCLDB), the Manitoba Liquor & Lotteries Corporation (MBLL), and Cannabis New Brunswick. Decibel is also registered as a cannabis supplier in Saskatchewan.

Decibel has two cannabis derivative product brands: Pressed by Quest and General Admission. It also has four dried cannabis brands, with two positioned as premium brands, Qwest and Qwest Reserve, and two positioned as core-segment and value-segment brands, Blendcraft by Qwest and General Admission.

The company sold its control of cannabis retail chain Prairie Records to Fire and Flower Inc., a wholly owned subsidiary of 2759054 Ontario Inc. d.b.a. FIKA, for $3 million. Prairie Records has six cannabis retail stores in operation in Saskatchewan and Alberta, three in each province. 

Earlier this month, BC-based We Grow BC Ltd and Alberta-based Westleaf Labs, now operating as Decibel Cannabis, filed a notice of civil claim in a BC Supreme Court for $834,901, arguing that BC-based Seven Elk Shipping’s actions resulted in the seizure of their product by US border officials.

“The Company’s fourth quarter financial results delivered another year of growth across all metrics and I look forward to working with the team to continue to build on this success,” said Benjamin Sze, Decibel’s new Chief Executive Officer.