Aleafia Health Inc. (TSX: ALEF)(OTC: ALEAF) delivered its financial results for the 2019 fourth quarter and fiscal year with a 22% sequential increase in quarterly net cannabis revenue to $6 million. Aleafia said the increase was primarily due to a $1.0 million jump in cannabis revenue.

For the fiscal year, net revenue was $16.4 million, an increase of 391% over the previous year. The increase was attributed to an $11.0 million increase in net cannabis revenue, along with an increase of $2.0 million in clinic revenue.

The fourth-quarter net loss was $9.8 million versus $1.9 million in the previous quarter. This loss was primarily due to non-cash items including a decline of $8.0 million in unrealized gain on the fair value of biological assets compared to Q3 2019, and a non-cash $3.6 million deferred income tax expense in the quarter.

“Our disciplined, sustainable growth has paid dividends in 2019 in a tremendous year for Aleafia Health. Our patient-centric approach remains at the core of our business as we build our cannabis health and wellness ecosystem,” said Aleafia Health CEO Geoffrey Benic. “These results again demonstrate the strength of our team in executing on this vision during a period of rapid and dynamic industry change.”

The company did manage to cut costs. SG&A expenses dropped by 11% sequentially to $4.3 million in the quarter. This increased efficiency is the result of the company’s focus in FY 2019 on prioritized sustainable growth and cost and expense management. The company said it had $41.2M cash and cash equivalents on December 31, 2019.

Benic added, “The prudent allocation of capital instituted over the course of 2019 is reflected in streamlined expenses, a fourth consecutive quarter of solid revenue growth, and industry-leading gross margin among North American cannabis industry reporting issuers. Looking forward, we expect to make continued progress in 2020 as we bring new, differentiated health and wellness product formats to market and expand our patient ecosystem at home and abroad.”

Since the quarter has ended, Aleafia Farms received a Health Canada Cultivation License for the Niagara Facility.  The License authorizes cannabis cultivation, propagation, harvesting and sales in Building 1, which includes 50,000 sq. ft. of greenhouse area and 20,000 sq. ft. for post-cultivation operations. These include drying, storage and shipping and support for outdoor cultivation.