Aleafia Health Inc. (OTCQX: ALEAF) delivered its financial results for the quarter ending June 30th, 2021 with revenue of $10.6 million. The net loss for the quarter was $36,000 versus a net loss of $4.0 million over the prior year’s quarter. Aleafia said the improvement in net loss over the prior year’s quarter was primarily due to improved gross profit, a $12.1 million gain on the sale of certain clinic assets in the transaction with Myconic, partially offset by bad debt expense of $7.2 million.
The company broke out the revenue in a statement as follows:
- Cannabis net revenue was $9.6 million, an increase of 53% over the previous quarter. The sequential increase was due to increases in the sale of cannabis across the adult-use, medical and bulk wholesale sales channels.
- Medical cannabis net revenue for Q2 2021 was $3.3 million, a 23% and 67% increase over the previous and prior year’s quarter respectively, due to improved product offerings and increased international medical cannabis sales.
- Net adult-use cannabis revenue for Q2 2021 was $3.2 million, an increase of 87% over the previous quarter and 270% over the prior year’s quarter. The sequential increase was primarily due to greater product availability, including the launch of new product formats and SKUs.
- Net bulk wholesale revenue received from sales to cannabis licensed producers was $3.1 million, compared to $1.9 million and $6.2 million in the previous and prior year’s quarter, respectively. Bulk wholesale was up over Q1 2021, but lower than the prior year’s quarter, primarily driven by dried flower allocation, which was redirected to the adult-use sales channel.
“This quarter clearly demonstrates the success of our expanded product portfolio, with strong sequential growth across all sales channels and a shift towards a more balanced mix with sizable contributions from both the medical and adult-use cannabis markets. Credit goes to our management team and employees for delivering record adult-use, and medical cannabis revenue this quarter,” said Aleafia Health CEO Geoffrey Benic. “Despite industry-wide price compression, we have maintained robust gross margins on cannabis revenue when compared to other Canadian licensed producers, based on most recently reported quarterly results. This was achieved through our twin pillars of low-cost cultivation and high-quality, differentiated cannabis derivative formats.
“With an already well-established line of cannabis wellness products, we were delighted to see sequential revenue increases driven by our newly launched dried flower and pre-roll portfolio. Gaining access to the German medical cannabis market marks an important milestone that, with continued successful shipments, can contribute revenue growth and gross margin expansion. The development of our domestic medical cannabis channel and broader patient ecosystem are well positioned as we continue the ramp-up of our exclusive partnership with Unifor, Canada’s largest private sector union.
“Lastly, we were able to complete planting across 86 acres outdoors, over a full a month earlier than last year, laying the groundwork for the 2021 harvest. Outdoor cultivation remains a core competitive advantage both in cost and scale, for our dried flower portfolio and as input for cannabis product derivative formats. Likewise, it will allow us to be opportunistic in securing bulk wholesale revenue later this year and into early 2022.”