C21 Reports Slight YoY Increase In Q4 Same Store Cannabis Sales As It Prepares To Wrap Up Acquisition of Deep Roots Harvests

Zinger Key Points
  • C21 Investments reported revenue of $28.3 million in 2023,Revenue of $28.3 million, down 2% from last year.
  • Gross profit was $2.8 million in 2023, up from $2.7 million in the third quarter of 2023.

Vertically integrated cannabis company C21 Investments Inc. CXXI CXXIF reported its unaudited financial results on Tuesday for the fiscal year ended Jan. 31, 2024.

The company reported a slight increase in same-store sales over the previous fourth quarter, despite a decline of 12% in Nevada sales over the same period. CEO and president Sonny Newman called it "a testament to our strong brand and loyal customer base that has consistently generated 500,000 customer transactions annually.”  

FY 2023 Financial Highlights

  • Revenue of $28.3 million, down 2% from last year, while state of Nevada sales were down 6% over the same period.
  • Gross profit totaled $11.1 million, down from $13.4 million in fiscal 2023.
  • Gross margin of 39.4%, down from 46.4% the previous year driven primarily by one-time items discussed below.
  • Adjusted EBITDA came in positive at $4.6 million.
  • Net loss was $2.5 million, compared to net income of $293,211 in 2023.
  • Cash flow from operations of $3.3 million; free cash flow of $2.7 million inclusive of $1.3 million taxes paid in the year.
  • Total liabilities were reduced by $1.5 million for the year to roughly $22.5 million.
  • As of Jan. 31, 2024, the company had $54.4 million in total assets, down from $58.3 million as of Jan. 31, 2023.

Q4 2023 Financial Highlights

  • Revenue totaled $6.5 million, down from $6.9 million in the prior quarter.
  • Gross profit was $2.8 million, up from $2.7 million in the third quarter of 2023.
  • Total expenses amounted to $2.3 million, down from $2.5 million in the prior period.
  • Net loss was $1.2 million, compared to $357,218 net loss in the previous quarter.
  • Adjusted EBITDA came in positive at $1.09 million, up from an adjusted EBITDA gain of $937,358 million in the fourth quarter of fiscal 2022.

C21 Investments recently announced the closing of the non-brokered private placement offering of its convertible debenture units for aggregate gross proceeds of CA$4 million ($2.9 million). The net proceeds will be used to fund the company's wholly-owned Nevada subsidiary, Silver State Relief, LLC‘s acquisition of Deep Roots Harvest, Inc.‘s assets related to the operation of their 6,500 square-foot, purpose-built, operational retail cannabis dispensary located in Southern Reno, Nevada.

"We have been actively adjusting our business mix as we scale back lower margin wholesale activities to better position the business for the recently announced addition of our new dispensary – an ideally located, purpose-built 6,500 square foot facility in Southern Reno," Newman said on Tuesday. "We expect to close the acquisition this month. This new dispensary will be launched under our Silver State Relief banner. Continued expansion of our retail footprint in Nevada remains a key priority.”

Meanwhile, Viridian Capital Advisors' experts expect a significant uptick in mergers and acquisitions (M&A) activity in the coming months as a result of the cannabis industry' adaptation to a new regulatory environment following the DEA’s announcement it would move to reschedule cannabis.

If you’re interested in gaining a deeper understanding of cannabis mergers and acquisitions and their impact on investment opportunities, don’t miss the opportunity to join us at the 19th Benzinga Cannabis Capital Conference in Chicago this October 8-9. Engage with top executives, investors, policymakers, and advocates to explore the future of the industry. Secure your tickets now before prices increase by following this link.

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Posted In: CannabisEarningsNews2023 earningsCannabis EarningsDeep Roots Harvestfinancial resultsSonny Newman
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