Fire & Flower Holdings Corp. (OTCQX: FFLWF) reported total revenue of $23.1 million for the first-quarter fiscal 2020 ending May 2, versus revenue of $9.5 million in the first quarter of fiscal 2019 – representing a 142% increase in revenue year-over-year. Unfortunately, the cost of those goods increased 166% for the quarter.

Fire & Flower delivered a net comprehensive loss of $(12.7) million, or net loss per share of $0.08. The company attributed the losses in part to expenses including $4.3 million of impairment charges. Other expenses were made up of finance costs of $6.7 million, partially offset by gains on derivative liabilities.

“Fire & Flower’s financial and operational results for the first quarter, fiscal 2020 demonstrates that the Company continues to show positive growth quarter over quarter and over its previous fiscal year. We will continue to work towards positive operating EBIDTA delivered through four-wall retail economics,” said Trevor Fencott, Chief Executive Officer of Fire & Flower. “The Ontario market presents a key growth opportunity for the Company and we will continue to focus on all major markets for private retail across Canada. Both the Open Fields Distribution Platform and Hifyre Digital Retail and Analytics platform provide additional independent revenue opportunities for the Company.”

The company reported an 83% increase in wholesale revenue through Open Fields Distribution in Saskatchewan from $2.1 million in Q4-2019 to $3.9 million in Q1-2020.

The company instituted a restructuring plan in the retail platform during the fourth quarter of 2019 and said that it was beginning to see results. Fire & Flower said it expects to keep building out its retail network, focusing on markets in Ontario with a significant number of cannabis consumers. However, the development of retail stores in the province of Ontario was affected by the slowdown in construction due to the COVID-19 public health crisis.  The company said it intends to prioritize expansion in the Ontario market for the current fiscal year, and also expects to enter the British Columbia market once final licensing is complete, and other Canadian markets as regulations permit.

COVID Update

Fire & Flower said it continued to see meaningful sales with basket sizes increasing with the increased popularity of large format cannabis products and the decrease of preroll cannabis products. “There continues to be meaningful demand for “cannabis 2.0″ new product formats such as edibles, vapes and beverages.”

As consumer interactions with cannabis retail took a digital focus during the COVID-19 public health crisis, Hifyre rapidly responded by deploying technologies such as “click-and-collect”, curbside pick-up and home delivery using proven models already in use in the province of Saskatchewan. With the focus of Hifyre resources shifted to these technologies during the quarter, the company saw a decrease in its digital revenue.

Fire & Flower stock has been slowly recovering from the lows it hit in March when the shares dipped into the twenty cent range. The stock was lately trading at roughly $0.55.