Indiva reports net revenue of $37.6 million in 2023, despite losses due to HC’s lozenge determination

| Sarah Clark

Ontario’s Indiva reported net revenue of $37.6 million in 2023 as part of its most recent quarterly and annual report for 2023, an 11.3% year-over-year increase.

This increase in revenue was primarily due to the increase in the company’s edibles sales, which were $32.7 million, or 87.2% of sales. This was despite what Indiva says was a $4.6 million loss in revenue due to lower sales from its Wana Sour Gummies and the loss of lozenge revenue following Health Canada’s determination that such products were not compliant. 

On May 30, 2023, Indiva and Canopy Growth Corporation entered into a contract manufacturing agreement whereby Canopy received control of all distribution, marketing, and sales of Wana branded products in Canada, and Indiva received the exclusive right to manufacture and supply those branded products in Canada to Canopy for a period of five years.

Losses from lozenges reduced Indiva’s net revenue in Q4 2023 by greater than $1 million compared to Q4 2022.

Still, the company says these losses were offset by growth in its Pearls by Grön brand line and the introduction of its No Future gummies and vapes, which accounted for greater than $6.7 million of incremental revenue in the quarter. Net revenue from No Future gummies in the last fourth quarter of 2023 was greater than 200% of the loss of Indiva’s lozenge revenue.

Increased profits also came from an 11.3% year-over-year decline in operating expenses, which the company attributes to lower marketing and sales expenses, lower research and development expenses, and lower share-based compensation.

Indiva’s EBITDA was $1.6 million, or 4.2% of net revenue in 2023, compared to a loss of $4.8 million in 2022. Adjusted EBITDA increased to a profit of $2.4 million compared to a loss of $1.5 million in the previous year, attributed to higher sales, improved margins, and lower operating expenses.

The company also wrote off $500,000 worth of old cannabis, as well as lozenges, which could not be sold following Health Canada’s determination that they were edibles, not “ingestible extracts”

Since then, Indiva launched its 55-and 25-packs of Blips, an “ingestible extract” in Alberta and BC, with the Ontario launch slated for June 2024.

Comprehensive net loss for Indiva in fiscal year 2023, excluding one-time expenses and non-cash charges, was $4.4 million, compared to a loss of $8.4 million in fiscal year 2022.

Indiva’s edibles enjoy a significant market share across several provinces, with around 25% in Ontario, Alberta, and BC in the fourth quarter of 2023, based on figures from data platform Hyfire.

Using those same figures, Indiva says its Pearls by Grön gummies ranked as number two in the edibles category based on sales with a 14.5% share and ranked as number one with a 17.4% share based on units sold in Q4 2023. 

Its No Future gummies, launched in late Q3 2023, ranked as the seventh most popular edible based on sales and ranked fifth based on units sold.

Indiva’s Bhang chocolates represented 32.6% of cannabis chocolate sales in the same time period, ranking as the top-selling product in this category based on units sold and second based on sales. 

In 2023, Indiva began supplying Tilray Brands, Inc.’s medical platform with Indiva products and signed a non-exclusive agreement with Valiant Distribution Cannabis, a subsidiary of Canna Cabana Inc., for the distribution of its products in the province of Saskatchewan. 

In 2023, Indiva also amended the terms of its existing non-revolving term loan facility with SNDL Inc. and entered into a supply agreement with SNDL whereby SNDL would supply Indiva with certain distillate products exclusively. 

Indiva reports that it expects net revenue and margins to decline on a sequential basis in Q1 2024, which it attributes to seasonality, and remain flat year-over-year, but also expects to generate record net revenue and record EBITDA in 2024.