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SNDL Inc. (Nasdaq: SNDL) looks to have turned a major corner after reporting its financial results in Canadian dollars for the third quarter ending September 30, 2023. Gross revenue grew to $249 million from last year’s $235 million for the same period. In addition to that, the net losses dropped to $21 million from last year’s net loss of $98 million. SNDL also reported a positive free cash flow of $16.5 million in the third quarter of 2023 versus a negative $67.1 million in the third quarter of 2022.

“SNDL’s positive net cash from operating activities and first quarter of free cash flow generation marks a pivotal milestone, reflecting our team’s commitment to operational and financial excellence,” said Zach George, Chief Executive Officer of SNDL. “We are intent on realizing SNDL’s potential for improved profitability, material growth, and greater efficiencies across all of our segments. We recently commenced our Liquor Retail data program and continue to see margin improvements in our Cannabis Retail network. In addition, we have rationalized our facility footprint and are moving aggressively into procurement to drive improved results in our Cannabis Operations segment”

Revenue Breakdown

Liquor

Most of SNDL’s revenue stemmed from liquor sales, but the company still sees a sizable amount of cannabis revenue. The liquor business brought in net revenue of $151.8 million in the quarter which was slightly lower than last year’s $152 million for the same period. SNDL is Canada’s largest private sector liquor retailer with 170 locations under its three retail banners: “Wine and Beyond”, “Liquor Depot” and “Ace Liquor.” SNDL also noted that it has launched an e-commerce platform for Wine and Beyond and that early observations indicate an average increase in total basket spend for online purchases compared to in-store purchases in the first four weeks post-launch. The company added that it expects to launch its first wine private label in the first half of 2024.

Cannabis

The retail cannabis revenue came in at $75.5 million for the third quarter of 2023, an increase of 14.1% compared to the same quarter of the prior year. Net revenue from cannabis operations was $21.0 million, an increase of 77.4% compared to the same quarter of the prior year. SNDL is Canada’s largest private-sector cannabis retailer, operating 186 locations under its four retail banners: “Value Buds”, “Spiritleaf”, “Superette”, and “Firesale Cannabis”.

During the quarter, SNDL said it cut back on its brand portfolio cutting close to 50% of its total offerings across all brands to focus on high-performing SKUs, key consumer categories, and new innovations. The statement said, “This rationalization initiative prioritizes revenue generation and key volume SKUs to deliver increased margins within the Cannabis Operations segment and owned retail locations through 2024.” As part of these changes, SNDL said it launched 41 SKUs in the third quarter of 2023, primarily focusing on large format flower, vapes, and pre-rolls under its value-driven brands, Palmetto and Versus.

Sunstream

Sunstream is the joint venture for SNDL in which the company has sunk $531 million. The portfolio has five investments: Jushi Holdings Inc., SKYMINT Brands, Ascend Wellness Holdings, Surterra Holdings, Inc. d/b/a Parallel, and Columbia Care Inc. During the quarter, an affiliate of SunStream entered into restructuring arrangements regarding the foreclosure of certain Parallel cannabis operations in Florida, Massachusetts, Texas, and Nevada.

Then on October 23, 2023, an affiliate of SunStream announced a receivership court order granting the sale of certain assets of Skymint to a SunStream USA entity. SNDL said that the Parallel Transaction and Skymint Transactions are expected to close by the end of the first quarter of 2024.

The company’s cash and cash equivalents were $201 million at the end of the quarter, down from $279 million at the end of December 2022.

The post SNDL Revenues Grow As Losses Drop appeared first on Green Market Report.

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Auxly Cannabis Group Inc. (TSX: XLY) (OTCQB: CBWTF) reported a sharp rise in its third-quarter revenue alongside meaningful cost reductions.

The Toronto-based company announced that its net revenues for the quarter ending Sept. 30, soared to $28.2 million, a 42% jump from the same period last year.

Auxly’s success in the third quarter wasn’t just limited to revenue growth. The company also successfully reduced its SG&A expenses by $1.5 million, or 13%, from the same period in 2022. The reduction is part of Auxly’s broader strategy to streamline operations and enhance profitability.

The company also saw a positive adjusted EBITDA of $100,000, an upswing of $5.9 million compared to the same period last year “primarily as a result of improvements in gross profits and SG&A.”

“During the quarter we continued to take positive steps to focus our operations, reduce costs and improve profitability,” CEO Hugo Alves said in a statement.

He added, “We saw increased demand for our products due to strong operational execution, the persistent efforts of a dedicated internal sales force and the increasing popularity of our Back Forty and Parcel brands. The successful consolidation of our manufacturing activities, enhancements in pre-roll automation and disciplined spending have directly improved margins and resulted in better overall financial performance.”

The company stated that it has maintained its ranking as the fifth-largest licensed producer in Canada, holding a 4.8% market share by quarter-end, which edged up to 5% by October. The company’s products, particularly in the pre-roll segment, have seen growing popularity, with Back Forty Wedding Pie and Banana OG pre-rolls leading sales.

Auxly has also made strides in product innovation and operational improvements. The introduction of new Back Forty all-in-one vapes and enhancements in post-harvest operations at its Leamington cultivation facility will help the firm meet demand and maintain quality.

The company managed to strengthened its runway by extending a convertible debenture with Imperial Brands plc by two years, boosting its balance sheet.

Looking ahead, Auxly aims to grow net revenues by 15% in 2023, focusing on key product categories and leveraging its large-scale cultivation facility for cost efficiency. The company also plans to manage its SG&A effectively, targeting a margin below 40% of net revenues.

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Five years after adult-use dispensaries opened, Massachusetts Cannabis Businesses have more banking options

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Florida’s Supreme Court Hears Arguments on Adult Use Legalisation Bill

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Rep. Earl Blumenauer (D-OR) might be retiring at the end of this Congress, but he’s still got boxes he wants to check off on an ambitious agenda to reform federal marijuana laws before his final bike ride from Capitol Hill.

The Oregon congressman, a founding co-chair of the Congressional Cannabis Caucus who has spent decades championing marijuana legalization, intends to make the most out of his last 14 months in office. He thinks bipartisan cannabis banking reform is still in play, for example, and he’s hopeful that the Biden administration will heed the will of voters by taking bold action to end cannabis criminalization.

“This can be done administratively,” Blumenauer told Marijuana Moment in a phone interview on Thursday. “If I were Joe Biden trying to get right with young voters—particularly young voters of color—and to somewhat atone for being on the wrong side of the failed war on drugs, in a single stroke this would do it.”

This is an issue that the congressman has spent more than 50 years working to address, including decades when he didn’t have the benefit of widespread public support or a robust state legalization movement to support his advocacy work. When he helped decriminalize marijuana as an Oregon legislator in 1973, just about 20 percent of Americans backed legalization. As of this year, that support now towers at a record 70 percent, a new Gallup poll shows.

“We have not yet hit the ceiling,” Blumenauer says. “When it’s unanimous, we won’t get any more.”

As with many issues in Congress, however, public support hasn’t necessarily translated into responsive laws. The House has passed a comprehensive legalization bill twice in recent sessions, but prohibition persists.

Some lawmakers continue to subscribe to the societally outmoded belief that marijuana is rightfully codified as a drug of high abuse potential and no medical value. Some have rested their “no” votes on disagreements about the particulars of reform proposals. And some simply do not view cannabis policy as a priority that deserves the kind of urgent legislative attention that advocates and lawmakers like Blumenauer have long demanded.

The congressman thought the issue would have advanced in a more meaningful way by now, but he’s not deterred by incrementalism. In fact, he looks back on the gradual path he and colleagues have helped chart with a sense of accomplishment. It’s all part of the plan—a “blueprint” to legalization he constructed years ago that takes into account the sobering legislative realities of Congress.

But Blumenauer isn’t all zen. He’s frustrated, for example, that lawmakers have yet to normalize marijuana banking despite the House passing seven versions of the Secure and Fair Enforcement (SAFE) Banking Act that he’s sponsoring this session with fellow Cannabis Caucus co-chair Rep. Dave Joyce (R-OH).

“I am convinced that not only would that have passed [the Senate], but it would have been a marker that would help us move a broader agenda,” he said. “That is something that’s been frustrating for me because we were so close, and we’ve got such a great group of people who care about this. I would have liked to see us be able to translate that into more progress in the Senate.”

The congressman is encouraged by the fact that the legislation originated on the Senate side this year, with members of the Senate Banking Committee approving the bill in September and leadership still signaling its intent to advance it to the floor before potentially sending it the House. Blumenauer still sees a path for the reform, even with anti-cannabis Rep. Mike Johnson (R-LA) ascending to the speakership last month.

No matter how things shake out, Blumenauer has made clear he’s not going anywhere on the marijuana policy front even after he prepares to stake his kickstand on greener pastures.

“We’ve got got targets here that I’m not prepared to give up on and that I will keep fighting for as long as I’m breathing,” he said.

The following interview has been lightly edited for length and clarity. 

Marijuana Moment: Ohio became the 24th state to legalize marijuana this week, meaning more than half of the country’s population now lives in a state that has disbanded with prohibition. What message do you think that should send to lawmakers on both sides of the aisle?

Rep. Earl Blumenauer: I felt that the vote in Ohio was a great big exclamation point on the things we’ve been talking about. We’ve been saying for years how this issue has crested, how it’s got broad momentum, how it is inclusive. It’s sort of like the success with the [Ohio abortion rights] issue—except this was more pronounced. We got more votes than the abortion issue. We get more votes than anybody on the ballot.

So I think it is re-emphasizes the points we make: this is an issue that is tremendously popular across the country. It is an issue that nobody—nobody—has paid a price for endorsing. And, for example, [Sen. John Fetterman (D-PA)] would not be in the U.S. Senate today if he hadn’t been such an outspoken proponent of cannabis legalization for years before his Senate election. I have no doubt in my mind that made the difference.

This is something that we’re trying to make clear to the administration and to the Senate leadership—that cannabis put them in the majority and cannabis has the potential of making Joe Biden’s reelection a lot smoother.

MM: Ohio’s vote came one day before Gallup released a poll showing national support for legalization at a record 70 percent. Do you think there’s a ceiling for support on this issue?

EB: When it’s unanimous, we won’t get any more. But we have not yet hit the ceiling. There was a temporary plateau, but even then, we watched other progress taking place. So I think this is extraordinarily profound evidence that it’s still building and that it makes a difference to people all over the country.

The diversity of the states that have come out in support of legalization is profound. I just could not be more pleased that no matter how hard the craven politicians in the Ohio state legislature tried to game it, they couldn’t. Voters saw through it, and in the end, it was a stunning success.

MM: There’s been significant progress on cannabis reform with the help of your leadership, but you’re leaving Congress likely before marijuana is federally legalized. Can you reflect on that? And how does that factor into your thinking about your future endeavors?

EB: Well, this is an area in 50 years of elected office, there’s nothing that gives me more satisfaction than helping to end the failed war on drugs. The progress has been much slower than I thought from that first successful [Oregon decriminalization] legislation in 1973. I thought the path would have been smoother and faster. And there have been some bumps in the road. I could not have envisioned the war on drugs, for instance, “Just Say No.” But notwithstanding, we have been very resilient.

The progress, particularly over the course of the last 23 years, has been steady. And it continues to surprise me, the strength of the election in Ohio. Not that if it passed—but it passed so overwhelmingly, despite what the legislature tried to do to game it. It’s a source of immense satisfaction.

I’m not going to give up on this. This is something that is a very important part of my career. If I have a legacy, this is one of the legacy issues that’s made a huge difference for millions of people around the country. And despite all the progress we’ve made, there’s more that needs to be done.

We need to make sure that this is fully integrated into the American healthcare system. If we could allow the VA, Medicare, Medicaid to prescribe and pay for medical cannabis, people would be safer and healthier. And we would save hundreds of billions of dollars. We’ve got targets here that I’m not prepared to give up on, and I will keep fighting for as long as I’m breathing.

MM: Are you considering possibly joining the board of some advocacy organization or advising industry stakeholders, for example? Or even running for a different political office?

EB: No, I’m trying to wrap up this term. I’ve got 14 more months, and I think we have more progress that we can make in this Congress. If we do our job right, we can have SAFE Banking, we can have the Biden administration rescheduling. Scheduled III is not my idea of a panacea, but it’ll take care of the [IRS code] 280E problem and we’ll make it so cannabis companies cut their taxes by a half or a third or more. These are things within our grasp.

And I haven’t yet given up on the Biden administration doing an 11th hour full decriminalization. This can be done administratively. And if I were Joe Biden trying to get right with young voters—particularly young voters of color—and to somewhat atone for being on the wrong side of the failed war on drugs, in a single stroke this would do it. As I say, I have not given up on that. I am not placing bets, but we’re going to continue to remind people how powerful this is.

And if I were looking for one thing that would revitalize the Biden administration, particularly amongst young people, people of color, this would be it. It would have profound effects, and it’s the right thing to do.

MM: To that point, the president does seem to grasp the popularity of this issue, repeatedly touting his mass marijuana pardon and scheduling directive.

EB: This is a conversation I’ve had with them for months. Every chance we get, I remind them about how if it weren’t for cannabis on the ballot in Arizona, Joe Biden wouldn’t have carried Arizona in 2020. It was the key to his success there. And they wouldn’t have control of the Senate and Fetterman without cannabis voters.

MM: Based on those conversations with the White House, do you get the sense that the administration has internalized the potential that embracing marijuana reform represents—and also the potential risk of, say, stopping at rescheduling?

EB: I think there’s growing awareness. And I’m not very good at politics—and some of the stuff is really above my pay grade—but I have been resolute about how important this is as something that America needs. I haven’t been shy about pointing out that there are massive benefits for Democrats and Joe Biden to be more aggressive on this.

MM: There’s a big question on the minds of advocates and stakeholders, and that’s who might take the mantle in Congress and champion this issue as consistently as you have over your tenure. Have you given any thought to that?

EB: Well, my my goal is to build on the legacy of the Cannabis Caucus to find new people who want to play a role. I am developing an exit memo that details the history. It was 2014 when we wrote our path forward [blueprint]. That still reads pretty well. We’re coming up on the 10th anniversary, so I think I will use that—it may be annotated slightly—and put it in the hands of as many members of Congress who will listen to me.

For well over a decade, I have given to each new member of Congress a letter that has things that I wish people had told me and my family when I first came [to Congress]. Helpful hints. Well, I plan on making the refined copy of the path forward as something that I use to give to everybody going forward, and I hope that there will be people who want to pick it up and run with it.

I think there are a number of people who care about this. And actually, the more the merrier. I’m proud to have played a key role, but we don’t need to have one or two or three people who kind of carry the mantle. We we want to have several dozen people who play critical roles, and there’s space in this issue for anyone who wants to play a part.

MM: Can you give me an example or two of moments you’re proudest of in the context of you congressional cannabis advocacy work? And most disappointed about?

EB: The biggest disappointment was the inability of our to take SAFE Banking, which we passed seven times in the House, and get it across the finish line of the Senate. I am convinced that not only would that have passed, but it would have been a marker that would help us move a broader agenda. And that is something that’s been frustrating for me because we were so close and we’ve got such a great group of people who care about this. I would have liked to see us be able to translate that into more progress in the Senate. Now, that said, I’m pleased that the Senate leadership has come around—but we lost a couple of years that are problematic, and it was a slightly more difficult lift in the House after that.

There isn’t a single moment that sort of stands out for me on the positive side, because it’s been a series of people stepping up, being involved, broadening the base of support. At times it’s just been overwhelming hearing these stories and watching the momentum build. That said, we’re not there yet. But I think these have all been critical steps in building the foundation for what ultimately will be our success, and it’s going to happen, I think, sooner rather than later.

MM: You were also the first sitting member of Congress to endorse psychedelics policy reform.What do you imagine the future of psychedelics looks like on Capitol Hill in the coming years? Given Republican interest in the issue, do you feel like it could enjoy a level of bipartisanship that we didn’t see in the early cannabis reform movement?

EB: There’s no reason that our work with psilocybin or other psychedelics should not be bipartisan. There’s remarkable evidence of what can happen if the therapy is done right. I’m proud of the approach that’s been taken in Oregon. It’s been pretty careful and hasn’t generated a partisan backlash, and people are starting to see some results.

This is becoming mainstream. I mean, the power of psilocybin, for instance, in terms of helping conditions of addiction that defy conventional therapies—this is extraordinarily powerful. And so I am confident that we will get there and that, if we do our job, right that we will build a non-partisan consensus and move legislation forward.

MM: Do you see a path forward for marijuana banking legislation this session? There’s been recent talk about potential horse trading to get the bill advanced in exchange for passing cryptocurrency-related legislation from the House, for example.

EB: I don’t think we need to get all transactional here and loop in other extraneous issues. I think the merits speak for themselves—the breadth of support for the SAFE Banking Act in terms of stopping robbery, the injury every day across the country. And it’s interesting to look at the breadth of the coalition. It’s not just a bipartisan group of people on Capitol Hill, but we have credit unions and banks, people who are involved with property management, gardening. It’s a very impressive coalition of people who are negatively impacted by the insanity that we deny a whole range of financial services to a growing new industry.

Having the opportunity to legalize banking relationships is going to have a profound economic impact in communities across the country. And it’s a signal that that the legislative process can work.

MM: To what extent do you think the new speaker might pose an obstacle given his consistent anti-cannabis voting record?

EB: This is the guy that evidently doesn’t have a bank account. I don’t know how important bank accounts are for him. But I think this is not going to be a casualty of the Johnson speakership. He was elected speaker, basically, because people in the Republican caucus just gave up. They didn’t have it in them to go another round or to have very destructive elections. He’s affable. People like him. He’s kind of a black box, when it comes to issues. I get the impression that he’s reasonably smart. I don’t know, I’ve not done any direct work with him.

But he doesn’t have to do anything with this. Just stay out of the way. And I would think that he has bigger fish to fry, so to speak. We’re going to have a looming government shutdown, if not next week then next month or the month after that. This is grief he doesn’t need. This is a bipartisan win that he could claim credit for, or at least claim credit for not stopping.

When you get the American Banking Association and the credit unions and realtors, I mean there are lots of people who are firmly embedded in the in the economy of today, and this just makes sense in the same way that our research agenda makes sense to be able to hire high school graduates for six figure incomes, who too often are denied access because of failed drug test. These are areas that are are aligned. They’re ready to move forward. People feel good about them. And it doesn’t violate any fundamental tenets, as near as I can tell, that Johnson or any of the other people.

We’re winning cohorts. We’re winning advocates. And it is, I think clearly, an issue whose time not only has come, but it’s passed in some respects.

States That Legalize Marijuana See ‘Significantly’ Lower Rate Of Cannabis Use Disorder Cases At ERs Compared To Non-Legal States, Study Finds

Photo courtesy of the House of Representatives.

The post Congressman Blumenauer On Ohio Marijuana Legalization, Biden’s Chance To ‘Atone’ For Drug War Record And Advocacy In Retirement appeared first on Marijuana Moment.

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