BZAM Ltd., a Canadian cannabis company with facilities in BC and Ontario, reported its third-quarter financial results for 2023. The company posted $21 million in revenue, with $1.6 million in direct gross profit after expenses.
Direct gross profit is calculated before changes in the fair value of “biological assets”, i.e. cannabis plants.
The company’s net revenue increased significantly compared to the same quarter in 2022, when it was just under $10 million, and a smaller increase compared to Q2 2023, which saw just over $19 million in sales.
Direct gross profit for Q3 2023 was 8% before changes in “fair value of biological assets”, compared to 6% in Q3 2022 and 16% in Q2 2023. BZAM attributes the decrease from Q2 2023 primarily to “inventory cost provisions and the clean-up of old inventory through sales at or below cost.”
Quarter-on-quarter increases in net revenues for BZAM were powered by the increase in sales from its Highly Dutch brand, -ness vapes, and infused pre-rolls but were partly offset by the discontinuation of some low-margin SKUs.
The BZAM brands include core brands BZAM™, TGOD™, -ness™, Highly Dutch Organic™, TABLE TOP™, and partner brands Dunn Cannabis, FRESH, and Wyld.
Loss from operations was $12.9 million in Q3 2023, compared to $8.7 million for Q3 2022 and $12.1 million in Q2 2023.
In the most recent quarter, BZAM also received orders under its international distribution agreements in Germany, Australia, and the United Kingdom following the acquisition of its EU-GMP certification in Q2 2023. As of October 31, 2023, the company had delivered export orders to those three markets totalling $1.05 million.
After the quarter’s end, BZAM also received $1.79 million in borrowing from Stone Pine Capital Ltd., a company controlled by the BZAM’s largest shareholder and current Chairman, Bassam Alghanim. He invested another $5 million into BZAM earlier this year, as well.
BZAM’s share value has declined considerably in 2023, from about 60 cents in late November 2022 to about 15 cents in late November 2023.
