IM Cannabis Q3 Revenue Grows 30% Sequentially To $11.5M

IM Cannabis IMCC IMCC announced its unaudited financial results on Monday for the three and nine-month periods ended September 30, 2021, with revenues of CA$14.4 million ($11.5 million), a sequential increase of approximately 30%.

Q3 2021 Financial Summary

Outlook and Regional Business Update

Corporate Highlights

The international cannabis company with operations in Canada, Israel and Germany noted that revenues would have been $1.4 million higher had the acquisitions of MYM closed and if the Pharm Yarok and Vironna transactions signed at the start of the quarter had gone through.

• Gross Margin before fair value adjustments was 20.0%, up from 5.4% in Q2 2021;
• Adjusted EBITDA loss was CA$7.0 million, inclusive of CA$1.6 million of non-recurring acquisition-related costs in the quarter, compared to CA$0.3 million in Q3 2020;
• General and administrative expenses were CA$10.2 million, compared to CA$2.2 million in Q3 2020;
• Net loss was CA$5.7 million, versus a net loss of CA$5.1 million in the same period year ago;
• Basic loss per share was CA$0.06, compared to earnings per basic shares of CA$0.004 in the third quarter of 2020;
• At the end of the reporting period on Sep. 30, IM Cannabis held CA$17 million in cash, compared to CA$8.9 million it held on Dec. 31, 2020.

"Our third quarter results are indicative of the embedded growth profile of our integrated MCO model,” Oren Shuster, CEO of IMC stated. “Over the past year, we have completed a number of strategic and accretive acquisitions that have vertically integrated our operations, providing IMC with premium cultivation capacity, sought after brands and expanded distribution reach. Today we are seeing the revenue growth and margin opportunities of our unique business model, trends that we expect to continue."

IMC expects continued sequential revenue growth in Q4 2021 and into 2022, with recent acquisitions in Israel and Canada having been integrated, and the portfolio positioned to optimize revenue and margins across jurisdictions. IMC anticipates that gross margin will continue to increase as revenue growth offsets fixed operating costs, particularly in Canada.

• On July 9, 2021, the company announced the closing of the MYM Nutraceuticals Inc. acquisition. MYM operates two licensed, craft cultivation facilities in Canada. MYM's flagship brand, Highland Grow, is an ultra-premium brand sold in most provinces throughout Canada.
• On July 27, 2021, the company announced the signing of a definitive agreement in connection with the acquisition of R.A. Yarok Pharm Ltd., Rosen High Way Ltd. and High Way Shinua Ltd. (collectively, "Pharm Yarok") accelerating IMC's execution of its vertical integration strategy within the Israeli retail market.
• On August 16, 2021, IMC announced the signing of a definitive agreement to acquire 51% of the outstanding ordinary shares of Revoly Trading and Marketing Ltd. dba Vironna Pharm.

Price Action 

IM Cannabis shares’ traded 2.47% higher at $3.32 per share at the time of writing Monday morning. 

Photo: Courtesy of Rick Proctor on Unsplash