Aleafia Health Revenue, Net Losses Increase In Third Quarter - Grow Life 420

Aleafia Health Revenue, Net Losses Increase In Third Quarter

November 11, 2021

#KahliBuds #MMJ #CBD #THC

Aleafia Health Inc. (OTCQX: ALEAF) reported its financial results for the three ending September 30, 2021 as revenue increased 123% to $9.4 million. Still, Aleafia reported an eye-popping net loss of $82.9 million versus last year’s net loss of $19.8 million. The company attributed the increase in net loss over the prior year’s quarter to non-cash items including a $53.1 million impairment of intangible assets and an $11.3 million impairment of goodwill.

“Our momentum in the adult-use cannabis sector has continued with our strongest quarter to date by a significant margin,” said Aleafia Health CEO Geoffrey Benic. “Consumer demand for our portfolio has been clearly demonstrated as we now begin to capture meaningful market share, entering the top 10 nationally in the pre-roll, edible, and oils categories. Most importantly, we’ve realized a five-fold sequential increase in dried flower market share during the quarter, in a category that is both Canada’s largest and one that leverages our low-cost cultivation advantage.

Net bulk wholesale revenue received from sales to cannabis licensed producers fell to $1.9 million, versus $3.1 million and $2.1 million in the previous and prior year’s quarters, respectively. The negative gross margin in the bulk wholesale segment during the quarter of 169% is attributable to the company recording of an inventory provision for a slow-moving inventory of $2.4 million expensed to cost of sales, and the opportunistic sale of aged CBD distillate, due to a greater focus by the company on THC dominant SKUs.

Medical cannabis net revenue for the quarter fell by 23% sequentially to $2.5 million and a 31% increase over the prior year’s quarter. The sequential decline was due to seasonally lower prescriptions written and filled during the summer months and a decline in international medical cannabis sales during the quarter.

“The outdoor cultivation harvest, our third to date, has yielded a material improvement in potency, providing us with a high-quality THC-dominant dried flower for use in our milled and pre-roll product formats. This is expected to significantly improve our available supply of top-selling SKUs, which consistently sell-out in adult-use markets. In 2020, we undertook capital improvements to the outdoor facility while running a cultivar R&D testing program, which has resulted in new, high-potency strains that will enter our portfolio and provide strong momentum heading into the new year.

Focus On THC 

After the quarter closed, the company completed the harvesting of its 2021 outdoor cannabis facility in Port Perry. Testing and weighing of CBD-dominant and CBD/THC balanced cultivars, which represented the vast majority of the total weight harvested, remains underway. Cannabinoid testing results of THC dominant dried flower indicate a significant improvement in potency and total kilograms harvested that can be made available to sell in the adult-use market in pre-roll and milled formats. A total of 11,600 kgs with an average THC potency of 22% will be allocated for sale in the adult-use market, primarily under Aleafia Health’s everyday cannabis brand Divvy.

By contrast, in 2020, the company harvested 7,200 kgs of THC dried flower, but only 7% of this harvest exceeded THC potency of 20%, a key threshold in the adult-use market. The material improvement in potency and yield is attributed to additional cultivars introduced in 2021, following R&D testing in 2020, along with improvements in site infrastructure.

The post Aleafia Health Revenue, Net Losses Increase In Third Quarter appeared first on Green Market Report.



Staff, KahliBuds, 420GrowLife

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