Kelowna-based Avant Brands Inc. announced its audited financial results for the fiscal year ended November 30, 2023.

The company behind the BLK MKT brand brought in record gross revenue of $30.2 million in the year leading up to November 30, 2023, but still recorded a net loss of almost $5.2 million. Net loss from operations alone was $1.5 million in the same period, compared to $8.5 million in the previous year.

This represents a year-over-year increase in gross revenue compared to 2022 and a decline in net loss of $6.6 million for the year leading up to November 30, 2022.

In the most recent report, net revenue was $26.3 million from the sale of 7,105 kg of cannabis, while the cost of sales was nearly $17.3 million. The company paid $3.8 million in federal excise taxes. 

The increase in net sales is attributed to a $1.4 million sales growth in recreational revenue and a $5 million sales growth in international export/wholesale.

Recreational cannabis sales accounted for 60% of net sales during the year ended November 30, 2023, with export and B2B sales comprising 39% of total revenue. Avant has exported to Israel, Australia, and Europe. Companies exporting to Israel have faced recent pushback from the industry and government there. Avant says it completed “significant” sales to Israel and Australia in the year ending November 2023, and it is preparing to fulfil further orders with existing export clients, as well as being in discussions with new potential clients.

While Avant undertakes some B2B sales, it says its primary focus is on selling flower it produces in-house. It sells an array of its products like BLK MKT, Tenzo, Flowr, Cognōscente, and Treehugger brands into markets across Canada, including BC, Saskatchewan, Manitoba, Ontario, Quebec, and Atlantic Canada. It sells products in Alberta through its online medical cannabis portal (www.greentecmedical.ca).

Avant operates six production facilities in BC, Alberta, and Ontario, including four in BC.

The overall weighted average selling price of cannabis sold decreased by 25% to $4.23 per gram. Non-medical cannabis sales averaged $6.31 a gram for the year ended November 30, 2023, compared to $7.18 per gram in the comparative period of the prior year. 

Avant says the decrease in the average selling price is primarily due to price compression in the industry combined with product sales and a $300,000 sales provision.

Like many other cannabis companies, the cost of operations increased for Avant compared to the same period in 2022. Operating expenses increased by $1.8 million, or 26%, over the prior year’s comparative period. Avant says this is due to higher regulatory fees, performance bonuses, and estimated professional and audit fees. 

The cannabis producer says it has a yield-per-plant of 63-99 grams of flower and 10-32 grams of trim. It says the fair value of its cannabis is $3.69 per gram of flower and $0.2 per gram of trim.

Since its inception, the Company has incurred losses and has an accumulated deficit of $65,913 as of November 30, 2023, which has been funded primarily by the issuance of equity, convertible debentures, secured credit facilities, and advances from related parties. 

“There is a material uncertainty related to these conditions that may cast significant doubt on the Company’s ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business,” it reports in its financial statement. “The Company’s ability to continue as a going concern depends upon its ability to generate profitable operations or raise adequate financing in the future.”

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