Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) announced its fourth quarter and fiscal year 2021 financial results for the ending on August 31, 2021. Cannara reported total revenue of $6.5 million for the fourth fiscal quarter, an increase of $5.9 million from $0.6 million in the fourth quarter of 2020. The company also delivered a net income of $1.1 million, an increase of $5.0 million from a net loss of $3.9 million in the fourth quarter of 2020. The adjusted EBITDA amounted to $1.4 million, an increase of $2.8 million from a negative adjusted EBITDA of $1.4 million in the fourth quarter of 2020.
For the full fiscal year of 2021 Cannara reported total revenue of $17.3 million, an increase of $14.7 million while the net loss amounted to $1.5 million, a significant decrease of $11.6 million from a net loss of $13.1 million in the prior year. The operating expenses fell by $2.9 million compared to prior year and the adjusted EBITDA amounted to $1.5 million, an increase of $9.8 million from the year prior.
“Our impressive increase in revenue this quarter and incredible overall results for this year demonstrate a year of sustained growth and profitability, one which continued to drive our net income and adjusted EBITDA up,” said Zohar Krivorot, President & Chief Executive Officer of Cannara. “Our three flagship brands carved unique niches in the industry, offering handcrafted, hang-dried, slow-cured and hand-trimmed cannabis with the flower’s natural properties intact. The consumer response to these products outperformed even our expectations, as we saw a remarkable increase in both new and loyal customers embracing the dynamism of our product portfolio. We are also thrilled by the continued expansion of our Cannara family, as we increasingly rely on purpose-driven leaders whose talent for strategy shape the organization’s competencies. Over the course of the next fiscal, we are well-positioned for national growth and will continue to seek opportunities that support our mission, allocating efforts to existing and new activities.”
Cannara said it plans to optimize the additional debt financing from CIBC to finalize the redesign of several zones at the Valleyfield Facility in order to replicate the indoor cultivation environment, including growing without utilizing the sun and launching the operations at the site. The first 25,000 square foot zone was propagated with 9,600 plants in November 2021 and the next 25,000 square foot zone is planned to be propagated in January 2022. Cannara also stated that its existing cash resources of $8.2 million (as of August 31, 2021), along with the forecasted cash flows and financing that occurred subsequent to year-end, will enable it to fund its planned operating expenses for at least the next twelve months from August 31, 2021.
“Our tremendous growth was driven by strategic retail activities in Québec, combined with well-thought-out operational development investments, the cultivation and sale licenses of our two mega facilities, and the cannabis revenues generated during the second half of 2021,” said Nicholas Sosiak, Chief Financial Officer of Cannara. “The incredible performance, strong balance sheet, and increase in gross profit all underscore our long-term growth strategy and commitment to our customers, against the backdrop of strong demand for our products. As we continue to generate profitable growth and outsized returns, we will move forward from a position of financial strength and are ideally positioned to showcase continued positive Adjusted EBITDA.”
After the quarter and fiscal year ended, Cannara secured an additional bank credit amounting to $22 million increased from a previous loan of $5.4 million with Canadian Imperial Bank of Commerce, and expanded to the Ontario market. The company also launched two new hash products within the Nugz brand in Quebec retail stores; Old School Hash in a 3-gram bar and Ice Water Hash in a 1-gram temple ball.