Cannara Biotech Revenues Grew 229% To $7.4M In Q2 2022 YoY

Cannara Biotech Inc. LOVFF LOVE 8CB released its fiscal second quarter 2022 financial and operating results for the three and six-month periods ended February 28, 2022.

Fiscal Second Quarter 2022 Financial and Operational Highlights

• Net loss of $1.14 million compared to loss of $862,756 in the previous year

• Posted quarterly revenues of $7.4 million, an increase of 229% from the same quarter in the previous year;

• Recorded a gross profit before fair value adjustments of $2.6 million or 36% more than the same quarter in the previous year;

• Achieved fourth consecutive quarter of positive Adjusted EBITDA while significantly expanding its production footprint within the facility located in Valleyfield, Québec

• Positive Adjusted EBITDA of $1 million for the first six months of 2022 while supporting over $1 million in startup expenses for the Valleyfield Facility compared to a negative Adjusted EBITDA of $(2.4) million in the same period of prior year;

• Successfully harvested its first growing zone in its newly redesigned Valleyfield Facility and has sold, subsequent to quarter-end, the finished product generated from this first harvest;

• Completed the activation of its second and third 25,000 square foot growing zones in the Valleyfield Facility, effectively increasing its overall production capacity by more than 200% when comparing to the production capacity at its Farnham Facility;

• Increased working capital to $14.8 million from a working capital of $12.4 million as at August 31, 2021;

• Invested $7.4 million in capital expenditures towards the company's assets in order to increase production capacity and processing capabilities;

• Granted an aggregate total of 7,710,000 stock options to certain employees and 225,000 stock options to board members at an exercise price of $0.18 per common share, subject to certain vesting conditions.

Highlights Subsequent to Quarter End

• Introduced a new genetic strain under the Tribal brand to the Quebec market: Terple. The product is available in a 3.5g can and five 0.5g pre-rolls;

• The company completed the activation of its fourth 25,000 square foot growing zone and is currently ahead of its objective of activating 6 growing zones by August 2022;

• The company was selected as one of only three cannabis producers by the Ontario Cannabis Store to have a headlining product for their 420 event; To support this, the company created a special edition of its Early Lemon Berry pre-rolls, offering a 12 x 0.6g joint format with innovative packaging design;

• The company successfully harvested its second growing zone at its Valleyfield Facility;

• Granted an aggregate total of 600,000 stock options to certain employees at an exercise price of $0.18 per common share, subject to certain vesting conditions;

• Exercise of 500,000 stock options at an exercise price of $0.10 for a total proceed of $50,000.

"We are proud of the advances we made in the second quarter. We planted three 25,000 square foot growing zones and successfully harvested our first zone in February," stated Zohar Krivorot, president & CEO of Cannara. "By redesigning the Valleyfield Facility and receiving consistent positive consumer feedback on our first harvest, we have successfully confirmed our ability to grow premium cannabis at scale. Our objective for the year is to turn on six growing zones by August 2022 at Valleyfield and we remain on schedule to do so".

Photo: Courtesy of Mackenzie Marco on Unsplash

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