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Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) delivered its fiscal first quarter 2024 financial results for the quarter ending November 30, 2023. The Canadian-based cannabis company reported that its fiscal first quarter revenue jumped 89% to $19.5 million from last year’s $10.3 million for the same time period. The company also reported a net income of $2.1 million compared to the $2,951 net income generated in the first quarter of 2023. The earnings per share for the quarter was $0.02. All figures are in Canadian dollars.

“The first quarter of 2024 has been another significant period for Cannara, with record-breaking net revenues of $19.5 million, an 89% increase from the comparative quarter in 2023, and an incredible net income surge,” stated Zohar Krivorot, President & Chief Executive Officer. “As we build on this momentum in 2024, our roadmap is clear, continued execution with excellence, cost efficiencies, and product innovation. This strategic expansion is not just about quantity, it is about deepening our market penetration by enriching our customer’s experience with high-quality products that stand out in the market.”

Numbers behind the growth

During the quarter, Cannara said it consistently produced from a total of nine growing zones out of the Valleyfield Facility. In January 2024, the company said it activated its 10^th growing zone reaching over 275,000 square feet of active production canopy at its Valleyfield and Farnham Facility, bringing the Company’s total production to approximately 33,500 kg of cannabis per year.

The company also said in its earnings release that 1,340,000 units were sold during the quarter across three flagship brands, a 99% increase compared to 675,000 units sold in the first quarter of 2023 and an 11% increase compared to the 1,202,000 units that were sold in the previous quarter.

“Our first quarter results are continued solid proof of Cannara‘s strong financial health and strategic approach to business operations,” stated Nicholas Sosiak, CFO of Cannara. We have seen impressive sales increases and a steady rise in adjusted EBITDA, net income, and cash flow from operations, which sets a strong base for the rest of the year. Moving into 2024, our plan is to keep growing our market share, introduce our brands to new regions in Canada, and launch products that meet our customers’ needs. We are focused on keeping our finances strong while we grow and make our operations even more cost-effective. The first quarter financial results are aligned with our financial plan and positions Cannara for what we expect to be our most successful year in terms of performance and financial achievements,” said Sosiak.

Balance sheet

Cannara also reported that it had $30.5 million in working capital as of November 30, 2023. The company delivered positive operating cash flows increased 233% to $400,000 in the quarter versus a negative operating cash flow of $300,000 last year. The free cash flow for the quarter increased to $4.9 million, a 145% increase compared to the free cash flow of $2 million recorded in 2023.

Market share review

Cannara Biotech published the following rankings for its market share in the different Canadian provinces:

• In Quebec, the company ranked in market share as the province’s  fourth largest licensed producer, holding approximately 8.7% of the market during the first quarter of 2024.
• In Ontario, Cannara currently holds rank as the ninth top license producer by market share, with a 3.15% share of Canada’s largest cannabis market.
• In Alberta, the company dramatically increased its market share in the province by 98.3% in the quarter from a 1.2% share in the fourth quarter of 2023 to a 2.3% share in the first quarter of 2024.
• In British Columbia, the company’s market share reached 0.84%.

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Debra Borchardt, KahliBuds, 420GrowLife