Aleafia Health Inc. (OTC: ALEAF) reported its financial results for the first quarter ending March 31, 2020, with revenue increasing 143% sequentially to $14.6 million. Aleafia said that it was due to an $8.9 million increase in cannabis net revenue which was 859% more than the 2019 first quarter.
The company also delivered a net loss of $6.2 million, which has been trimmed sequentially from a net loss of $9.8 million. The company attributed the net loss to non-cash items including changes in the fair value of inventory sold, expenses of $6.2 million, amortization and depreciation expenses of $2 million, and a deferred income tax expense of $1.7 million.
“Our disciplined, sustainable growth has resulted in a breakthrough quarter for Aleafia Health. Our patient-centric approach remains at the core of our business as we build our cannabis health and wellness ecosystem,” said Aleafia Health CEO Geoffrey Benic. “The prudent allocation of capital instituted over the course of 2019 is reflected in streamlined expenses, a fifth consecutive quarter of solid revenue growth, and industry-leading gross margin among North American cannabis industry reporting issuers. ”
On April 17, 2020, Aleafia provided a comprehensive corporate update on business operations, including changes in operations due to the COVID-19 pandemic. The most significant change in operations to date has been the temporary closure of the physical offices of the company’s national network of cannabis clinics and education centers since March 16. The company noted that all patient consultations are now completed using virtual clinic services with no significant increase or decline in the number of patients seen due to the closure of physical locations.
Earlier this week, Aleafia announced that it had entered into an agreement with Eight Capital on a “bought deal” offering for shares priced at $0.65 for gross proceeds of $13 million. The company also reported that it had secured a Health Canada Licence Amendment for its Port Perry Facility’s outdoor cultivation expansion. The expansion adds an additional 60 acres of outdoor cultivation area, bringing the total to 86 acres (3.7 million sq. ft.) The amendment was granted on May 12, 2020, expires on October 13, 2020, and authorizes cannabis cultivation in “Outdoor Grow Area 5.
Benic added, “With a fully licensed infrastructure now in place, we look forward to leveraging our lean, integrated production ecosystem for operational and financial success. In the second half of 2020 we look forward to introducing an exciting roster of new Cannabis 2.0 product formats tailored to health and wellness consumers while further expanding the reach of our existing product portfolio.”