Revenue for the quarter rose to $3.05 million, up roughly 223% from $1.8 million during the same period in the previous year. The bulk of the revenue increase was attributed packaging sales and rental income.
Likewise, the company’s net income rose to $696,746; a significant increase when compared to the loss of $815,188 during the second fiscal quarter of 2018. Adjusted EBITDA decreased slightly, falling from $1.1 million to $1.03 million. At the end of the period, Cannex had approximately $10.04 million in cash and cash equivalents.
Following the end of the quarter, Cannex took several steps to strengthen its balance sheet; including signing a binding letter of agreement to merge with 4Front Holdings LLC. In an all-stock transaction. The merger is still pending due diligence regulatory approval, and there is no guarantee that merger will be completed as initially proposed.
If completed, the Cannex will own, operate or manage cultivation and production facilities in Washington, Illinois and Massachusetts and five retail operations in Illinois, Massachusetts, Maryland, and Pennsylvania.
The company also secured $32 million in funding from Gotham Green Partners, LLC, and will use the proceeds to retire existing debt and to support Cannaex’s multi-state operations.
“Cannex is pleased with another quarter of good topline results driven by continuing strong performance of our Washington State operations,” said Anthony Dutton, CEO of Cannex. “Washington is a critical component to our long-term strategy and forms the underpinnings of our operational template that we will leverage as Cannex expands into additional jurisdictions as a part of our recently announced business combination with 4Front Holdings.”
It has been a rough year for Cannex’s stock, despite the recent gains over the last quarter. Since March 2018, the company’s share price has been on a slow decline, bottoming out at around CAD$0.56 in late October. Since then, however, Cannex has been on the rise and is currently trading at or around CAD$0.96.