MJardin Group, Inc. (CSE: MJAR) (OTCQX: MJARF) reported second-quarter revenue declined to $2.1 million from last year’s restated revenue of $6.8 million for the same time period. Net losses also increased to $12.4 million from last year’s net losses of $6.1 million. The company’s gross margin fell to $850,000 from last year’s $3.6 million, which MJardin attributed to the reduction in revenues from both the managed services and cultivation segments.
“While we still have a lot of work to get done to achieve our growth objectives, I am very pleased with the results of our team’s efforts, which have now resulted in a second consecutive quarter of stabilized operations, improved visibility into the future and ultimately better financial performance,” commented Pat Witcher, CEO of MJardin. “We are pursuing growth opportunities through sensible partnerships whereby our expertise and track record can contribute to growth and profitability without the need for additional capital. We continue to run a lean and extremely efficient business to manage margins and overall costs, while focusing our corporate development team’s efforts on creative growth strategies.”
The company’s AtlantiCann Medical Inc. or AMI joint venture contributed $1.3 million to earnings, which was an increase of ~330% from the prior quarter, Unfortunately, that good news is short-lived because MJardin noted that on August 5, 2020, AMI bought out the previously signed master service agreement, which had been a ten-year term that was executed in 2019. MJardin said it will receive $2 million from AMI within the next 45 days in lieu of ongoing license fee payments. The company said its cultivation management support for the AMI operation has been substantially reduced in connection with the buyout and is expected to be completed by the end of 2020.
Second Half Plans
MJardin said it continues to advance the production from its Canadian assets and plans to continue doing so for the balance of the year. At the same time, the company plans to continue focusing on securing offtake for production via either firm commitments with retailers or supply agreements with leading license holders. In a statement, MJardin laid out the following plans:
- Complete run-rate production at WILL and GRO facilities by the end of Q3;
- Retail sales of products produced at Canadian facilities in H2 2020;
- Full licensing of AMI Phase II expansion by/during the Q4;
- Significant progress on completion of construction at the Warman facility;
- Continued pursuit of expansion opportunities in select US States.