Zenabis Touts 61% Increase In Cannabis Revenue In Q3

Canadian cannabis company Zenabis Global Inc. reported Friday that its net revenue amounted to CA$19 million in the third quarter.

That’s a sequential increase of 61%.

Zenabis CEO Shai Altman credited the revenue growth to Cannabis 2.0 products, which the company launched during the quarter.

The Vancouver-based company also experienced growth in its "international bulk channels," and achieved market share growth in the Canadian recreational market, Altman explained.

Earnings Breakdown

• Propagation segment net revenue was CA$4.7 million compared to CA$4.4 million in the same quarter last year
• Consolidated net revenue for the quarter amounted to CA$23.7 million, down by 13% sequentially
• Gross margin (before fair value changes to biological assets and inventories) for the cannabis segment was CA$8.9 million, accounting for 46.9% of net revenue
• Cost of goods sold per gram of cannabis sold amounted to CA$1.29, versus CA$1.57 in the prior period
• Positive consolidated adjusted EBITDA of CA$3.5 million, compared to CA$3.4 million in the prior quarter
• Consolidated net loss totaled CA$17.0 million or CA$0.03 per share, fully diluted, up by 8.2% compared to the second quarter of this fiscal year

Over the quarter, Zenabis partnered with Canveda Inc. Under the purchase deal, the company agreed to supply a minimum of 300 kg and a maximum of 1,000 kilograms of cannabis flower per quarter.

In addition, the company finalized a CA$7.6 million equity marketed offering. Zenabis utilized the proceeds from the offering to prepay and repay particular debt obligations.

In the meantime, earlier this year, the company slashed its workforce by 25% as part of the plan to increase efficiencies and decrease expenses and cash outlays by roughly $2 million.