IM Cannabis Reports 192% YoY Spike In Q2 2021 Revenue, Purchases Stake In Vironna Pharm

Multi-country medical and recreational cannabis operator IM Cannabis Corp. IMCC IMCC reported its unaudited financial results on Monday for the three- and six-month periods ended June 30.

The company, with operations in Israel, Germany and Canada, also announced it is

purchasing a 51% stake in Revoly Trading and Marketing Ltd., which is doing business as Vironna Pharm. The transaction will take place via its Israel-based subsidiary IMC Holdings Ltd for $3.3 million just days after it teamed up with the cannabidiol brand cbdMD, Inc. YCBD. 

The sum includes $1.4 million in common shares of IMC to be issued at the closing of the acquisition following the receipt of all regulatory approvals.

"In preparation for expected government reform in both medical and recreational cannabis in Israel, the acquisition of Vironna strategically complements our previously announced transactions with Panaxia and Pharm Yarok by strengthening our direct links to patients and client data as well as consumer preferences," Oren Shuster, the company's CEO disclosed.

Q2 2021 Financial Highlights

• As previously estimated, revenues amounted to $11.1 million, representing a $7.3 million or 192% year-over-year increase and a sequential growth of approximately 27%.
• Total medical cannabis product sold was 1,842kg at an average selling price of $3.92 per gram compared to 525 kilograms of medical cannabis product sold at an average selling price of $4.77 per gram in the corresponding quarter of 2020.
• Cost of revenues totaled $10.5 million, up by $8.8 million or 517% from the same period of last year.
• The gross margin was 5% compared to 54% in the same period last year.
• General and administrative expenses were $7.5 million representing an increase of $4.4 million or 141% year-over-year.
• Selling and marketing expenses $1.3 million, up by $0.6 million or 83% from the prior year.
• Adjusted EBITDA loss was $5.8 million compared to a $1 million adjusted EBITDA loss for the quarter ended June 30, 2020.
• Net loss totaled $5.1 million.

Q2 2021 Business Highlights

• In April, through its wholly-owned subsidiary, Trichome, the company was repaid on its loan to Heritage Cannabis Holdings Corp. The total payout was for proceeds of $4.727 million. In addition, IM Cannabis also repaid its loan to Good Buds Company International Inc through Trichome. The total payout was for proceeds of $3.128 million.

Q3 2021 Outlook

The company expects significant revenue growth in the third quarter of 2021 based on organic and acquisition-related drivers.

• Improved sales of medical cannabis by Focus Medical in Israel, through supply agreements with Israeli pharmacies;
• The inclusion of a full quarter of revenue from recently acquired of Panaxia-to-the-Home's operations and Vironna Pharm;
• The consolidation of a full quarter of revenue from the company's recent acquisition of MYM Nutraceuticals;
• The continued development of Trichome JWC Acquisition Corp. with its recent rollout of Wagners adult-use brand;
• Resumed growth in Germany through new contracts.

Price Action

IM Cannabis' stock traded 5.2192% lower at $4.54 per share at the time of writing Monday morning.

Photo: Courtesy of Ryan Lange on Unsplash