Lotus Cannabis Finding Success Growing Premium Dried Flower
Quality, consistency and yield are the holy grails of cannabis cultivation.
But, producing quality strains consistently is very difficult. This is because high-quality strains are often high maintenance and require expert cultivators.
The actual plant should be protected from damage because of external natural abrasions to grow a pristine bud. The temperature and humidity have to be optimal and adjusted according to where the strain can thrive. It requires constant monitoring so that it can be watered at the right time and can be trimmed when needed.
The Canadian-licensed cannabis producer has grown a lineup of unique cultivars and sold over 1 million grams of premium-craft cannabis. Its first strain, “Kalifornia,” has achieved great success at stores across Canada.
Lotus attributes its success to its top-of-the-line facility, plant genetics and experienced production team.
A Customer Favorite
Kalifornia is an indica-dominant strain, bred from crossing Nepali OG with 88 G-13 Hashplant. Its aroma and tasting notes bring to mind dense buds with earthy and spicy undertones. The strain is sold across Canada through its collaboration with Kolab Project.
Kolab Kalifornia was recently successful in attaining a top 100 listing from the Ontario Cannabis Store (OCS) that ensures it’s always in stock.
With a strong THC level of over 22%, the product is also one of 18 featured on the OCS’s page Peak THC.
Success in Numbers
To understand just how successful the strain has proved to be for Lotus, we need to look at the numbers. All the financial information below is provided in Canadian dollars.
For the fiscal year-end August 31, 2019, to August 31, 2020, Lotus sold approximately 1,211,000 grams of cannabis for a total of $4.6 million in revenue.
And this was only the company’s first year in commercial production.
Currently, Kalifornia is listed in 8 provinces: British Columbia, Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia, PEI and Newfoundland.
According to Lotus, for Q1 2021, Kalifornia was the 7th best-selling 3.5-gram flower SKU in the provincial retailer Ontario Cannabis Store and the 6th best-selling 3.5-gram flower SKU in the provincial retailer Cannabis New Brunswick.
Lotus recently released its financials for the 3-month period in Q2 2021. The results of the 2nd year in production show a drastic improvement in financials, which is uncommon for a cannabis company at this stage.
Here are some key company highlights:
- Net revenue of $1.4 million in Q2 2021 compared to $1.1 million in Q2 2020
- Gross margin before fair value adjustments of $690,000 or 48% of net revenue in Q2 2021, compared to $742,000 or 69% of net revenue in Q2 2020.
- Operating expenses of $370,000 in Q2 2021 compared to $403,000 in Q2 2020
- Net income of $329,000 in Q2 2021 or 23% of net revenue compared to a net loss of $335,888 in Q2 2020
Production Expansion Plans
Lotus plans to expand the size of its facility by up to 30,000 square feet. The company’s goal is to produce another 5 million grams per year to achieve a total of 7 million grams.
The company also plans to introduce new strains with authentic terpene and THC profiles for its customers.
“The results we have received through our sales relationship with Kolab Project, especially in key markets like Ontario, are very encouraging and show strong demand for strains like our Kalifornia,” said Dale McClanaghan, Lotus CEO. “We’ve built a very exciting foundation and we are confident our next strain offerings will exceed our Kalifornia and we are looking forward to introducing new genetics to the market.”
Lotus Cannabis Co. is a partner of Benzinga. The information in this article does not represent the investment advice of Benzinga or its writers.
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