Entourage Health Corp. reported a net loss and comprehensive loss of nearly $8.4 million from $13.6 million in revenue and $9.5 million in net revenue for the three months ended September 30, 2024 (Q3 2024).
Revenue was up from the previous quarter (Q2 2024) and the same quarter in the previous year (Q3 2023), which the company says is primarily due to an increase in bulk B2B sales.
The company sold nearly twice as much cannabis at twice the price compared to the same quarter last year. Kilograms equivalent sold rose by 59% to 6,246 kilograms compared to Q3 2023, while the weighted average cost per gram of inventory on hand increased by 93% from $0.58 to $1.12.
Net loss and comprehensive loss were also down from the previous year Q3 2023, and the previous quarter, which the company attributes in part to a recent increase in its adult use sales with the introduction of new products and operational enhancements.
Of the $9.5 million in net revenue, $3 million were medical sales, $5.5 million were adult-use sales, and about $1.1 million were bulk sales. Medical sales were down year-over-year by 7%, and adult-use sales declined by just 1%. There were no recorded bulk sales in the same quarter in the previous year.
The company says the decrease in medical sales is due to lower patient renewal rates and reduced basket sizes, which it says is consistent with seasonality experienced in previous years.
The average selling price per gram for medical sales was $2.85 in the most recent quarter, $1.91 for adult use sales and $0.46 in bulk sales. The average selling price for medical use was up 5% and down 5% for adult use year-over-year. The average selling price (net of excise taxes) per gram declined from $2.23 in Q3 2023 to $1.53 in Q3 2024.
The company attributes the overall decline in the selling price for adult-use cannabis to the higher proportion of sales in its value-focused Dime Bag brand.
“Our increase in net revenue for Q3 reflects the success of our strategic shift into different markets, allowing us to diversify and tap into new opportunities,” said Vaani Maharaj, CFO of Entourage. “While the adult-use and medical segments faced shifts in market dynamics, initiatives like the launch of our Dime Bag value brand are helping us address evolving consumer needs and expand into new segments. These efforts demonstrate our adaptability and commitment to growth in a competitive industry.”
The company’s selling, general and administrative expenses, including salaries and benefits, dropped by 32% year-over-year.
The company sells under the brands Color Cannabis, Saturday Cannabis, and Dime Bag, and under Starseed Medicinal in the medical cannabis stream. It also sells products under its health and wellness brand Syndicate Cannabis.
As of September 30, 2024, Entourage held adult-use distribution agreements in Ontario, Quebec, Alberta, Manitoba, Saskatchewan, and British Columbia. The company sells dried cannabis flower, pre-rolls, vapes, cannabis oils, topicals, edibles, and a “micro inhaler”.
Entourage is now producing over two million cannabis pre-rolls per month.
