Canadian-based Inner Spirit Holdings Ltd. (CSE: ISH) (OTC:INSHF)known for its national network of Spiritleaf retail cannabis stores reported system-wide retail sales of $20.5 million in the second quarter of 2020, an increase of 343% compared with $4.6 million in the second quarter of 2019. This was a 19% increase sequentially from the first quarter’s $17.1 million. Total revenue increased 575% to $5.4 million in the second quarter versus $0.8 million in the second quarter of 2019. This increased 31% sequentially from $4.1 million in the first quarter of 2020.

Inner Spirit delivered a total net loss of $1.2 million in the second quarter of 2020, or $0.01 per share, compared with $2.8 million, or $0.02 per share, in the second quarter of 2019.

“The company’s financial results for this year’s second quarter show impressive year over year growth with over $20 million recorded in system-wide retail sales for the Spiritleaf network. This performance comes at a time when the country is facing ongoing challenges related to the COVID-19 pandemic,” said Darren Bondar, President, and CEO of Inner Spirit. “The retail cannabis sector has been fortunate to be considered an essential service in our operating markets, and we have been able to continue advancing our business strategy this year. For the second quarter and for the first half-year of 2020, we achieved positive Adjusted EDITDA¹ and positive cash flow from operations.”

New Spiritleaf stores opened recently brought the number of locations to 58 across the country – the most cannabis stores being operated under a single retail brand in Canada. Additionally, potential store locations have been conditionally secured in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Newfoundland and Labrador.

Franchise Model

The company touts its revenue-generating business model with more than 100 Spiritleaf store locations planned in local markets across Canada – all supported by franchise agreements with local entrepreneurs entering the business and applying their capital to growing the network. The company charges a $25,000 upfront franchise fee, 5% royalty on gross sales, and 1% of gross sales allocated to Spiritleaf advertising fund.

“We are continuing to expand the Spiritleaf footprint with recent store openings in Alberta, Ontario, and Newfoundland and Labrador. We are able to grow the Spiritleaf network of franchised and corporate-owned stores due to the excellent support and loyalty of our customers, franchise partners, employees, investors, and strategic partners. We have built a strong platform that we will further leverage as we expect to add some 20 additional store locations by the end of the year. We are focused on providing a premium and educational shopping experience to consumers and being the knowledgeable, authentic, and trusted voice for the cannabis experience in our communities,” added Bondar.