Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) announced a solid fiscal first quarter of 2025 for the quarter ending Nov. 30, 2024. The Canadian company reported that its cannabis revenues increased by 33% to C$34.9 million in the quarter, up from last year’s C$26.3 million. The company attributed the increase to organic growth in Quebec and other markets, supported by targeted sales and marketing efforts to expand distribution outside Quebec.
Cannara managed to do what many cannabis companies haven’t – turn a profit. The company reported that its operating income increased to C$4.2 million from last year’s C$3.4 million, reflecting higher sales and lower production costs, offset by increased sales and marketing expenses. The net income was C$2.3 million, slightly up from last year’s C$2.1 million, as higher revenues were offset by increased selling and marketing expenses.
“I am pleased to report to our shareholders that our Q1 2025 results delivered the strongest quarter in company history, producing company records for market share, revenue, adjusted EBITDA, operating cash flow, and free cash flow showcasing our successful execution of our long-term business strategy and industry leadership,” stated President and CEO Zohar Krivorot.
“Net revenues grew by 29% to C$25.1 million compared to Q1 2024, marking the highest quarterly revenue in our history,” Krivorot said. “During the quarter, we achieved record market share, increasing our Canadian market share by 28% to 4.1%, with notable gains across all provinces where we are licensed to sell. These results highlight the growing adoption of our premium-grade cannabis products and the strong execution of our sales and marketing strategies.”
In addition to the strong sales numbers, Cannara reported that its free cash flow improved significantly, increasing by C$6.6 million from negative C$2.0 million in 2024 to C$4.6 million for the 2025 fiscal first quarter. Earnings per share increased to C$0.03 versus last year’s C$0.02.
New product launches
“As we look ahead to 2025, we are excited to continue building on this momentum with plans to open two new growing zones increasing our capacity by 6,000 kg per year and introduce over 20 products in existing and previously unmet product segments. Our expanding capacity and these product launches position us to capitalize on increasing consumer demand for our brands, while further solidifying our leadership in the Canadian cannabis market,” concluded Krivorot.
For fiscal year 2025, the company told investors it expects to launch over 20 products in new and existing cannabis segments. In the first quarter alone, Cannara launched Nugz Cured Resin All-in-one Vapes, Nugz Shatter concentrates, Nugz Stinky Cheese Infused Joints and Tribal Trifecta Infused Pre-rolls.
Financial success
The company’s total liabilities did grow in the quarter to C$36 million from last year’s C$27 million. Cannara told investors it has a C$10 million revolving credit facility with the Bank of Montreal for working capital.
Nicholas Sosiak, CFO of Cannara said, “We delivered our fifteenth consecutive quarter of positive Adjusted EBITDA, totaling a record-high of C$6.0 million, underscoring the scalability and profitability of our operations. Operating cash flow surged to C$5.8 million, up significantly from C$0.8 million in Q1 2024, and we delivered record-high free cash flow of C$4.6 million, up from C$(2.0) million in Q1 2024. This industry leading profitability profile reflects our extremely focused leadership, best-in-class production facilities, and many inherent competitive advantages within our operating platform, and will allow us to further strengthen our financial position.”
[[{“value”:”The company is grabbing market shares as it rolls out consumer pleasing products.
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