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Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) reported stronger sales and a smaller loss for the first quarter ending March 31, as the multistate cannabis company benefited from continued growth in Florida’s medical marijuana market.

The Miami-based company booked revenue of $25.2 million for the period, up 14% from a year earlier, fueled by a 16% sales increase to $21.1 million in its home state of Florida. Net loss narrowed to $4.2 million from $7.4 million in the year-ago quarter.

“We delivered another quarter of year-over-year revenue growth and positive cash flow generation during the first quarter as we continued to execute on our growth objectives,” said CEO Robert Beasley in a statement.

The firm has been trying to expand its retail footprint and enhance its cultivation operations in Florida, where it sells medical cannabis products under the Fluent brand. The company opened several new dispensaries in the state over the past year and now operates 35 retail locations. It plans to add three more by the end of 2024.

Cansortium has also been upgrading its Florida cultivation facilities to produce a wider variety of high-THC flower strains and cannabis extracts, it said, which typically carry higher price points than lower-potency products.

“Our flower quality seeing further improvement and our average THC percentage now exceeding 27% with many of our strains routinely exceeding 35%,” Beasley said on a company earnings call. “Our improved product quality has enabled us to sustain higher pricing across virtually all product categories, including flower and baked cartridges.”

These efforts helped boost the company’s adjusted EBITDA to $6.8 million from $5.8 million a year earlier.

Beasley also acknowledged the potential for adult-use legalization in Florida, saying “We remain focused on operating our business under the current regulatory framework, and we look forward to doing our part to help this measure pass the referendum.”

CFO Jeff Batliner provided details on Cansortium’s restatement of its first three quarters of 2023, stemming from issues in its biological asset reporting, depreciation and an employee retention tax credit. The largest impact was $6.7 million related to the biological asset adjustment, split across the first quarter through the third quarter.

Cansortium also struck a deal to acquire cannabis investment firm RIV Capital (CSE: RIV) (OTC: CNPOF) in an all-stock transaction. The deal will give it a presence in New York, Pennsylvania and Texas in addition to Florida upon closing later this year.

“We are excited about the business combination with RIV Capital…laying the groundwork for a presence in four of the five largest population states in the country upon closing,” Beasley said.

Under the deal terms, RIV Capital shareholders will receive 1.245 Cansortium shares for each share held. Upon closing, existing Cansortium investors will own about 51% of the combined company, while RIV Capital and affiliated firm The Hawthorne Collective will control around 49%.

Management believes the deal will accelerate Cansortium’s growth by establishing a foothold in states that have attractive regulatory structures and limited competition.

However, Cansortium is still losing money as it spends heavily to grow its business. According to filings, the company in April raised $10 million through a private placement of convertible debt and expects to secure another $6 million in the coming weeks.

At the end of March, Cansortium had $8.5 million of cash and cash equivalents, with total debt of $62.9 million.

The post Cansortium narrows loss as Fluent sales surge in Florida appeared first on Green Market Report.

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Adam Jackson, KahliBuds, 420GrowLife