Emblem Corp. (EMMBF) delivered revenues of $2.3 million, a 281% increase year-over-year and a 50% increase quarter-over-quarter. Still, Emblem reported a net loss of $10.8 million versus last year’s loss of $2.8 million for the same time period. The adjusted EBITDA fell to a loss of $2.8 million from the previous year’s loss of $1.9 million. The company blamed the decrease on higher operating expenses.
The company said that the increase in revenues was a result of the commencement of oil sales during December 2017 and the launch of the adult-use recreational market in the third quarter of 2018.
“This quarter marked a significant period of transformation for Emblem as we strategically aligned the business around our core strengths. This began with the signing of one of the largest business to business cannabis supply agreements, increasing our aggregate annual product supply run rate to approximately 30,000 kilograms beginning in mid-2019,” said Nick Dean, President & CEO, Emblem Corp. “During the quarter, we began to realize the significant revenue impact of our Symbl brand within the adult-use market as we fulfilled 100% of our provincial commitments while maintaining product availability for our growing number of registered patients.”
Emblem said that the expenses increased as a result of the continued build-out of the company’s management team, as well as higher business development, legal and consulting fees incurred in connection with various strategic initiatives with respect to supply management, cultivation expansion, product development, and distribution. Higher selling and marketing costs were due to brand development, brand awareness, and media campaigns in connection with the launch of the company’s new adult-use brand Symbl, in preparation for the Cannabis Act coming into force.
Post Quarter End
Emblem said that its patient count increased to approximately 6,000 active registered patients, representing a 122% increase in the patient count since the beginning of the year. The company has signed a supply agreement with the BC Liquor Distribution Branch and obtained supply approval with the Saskatchewan Liquor and Gaming Authority.
With regards to the adult-use business, the company said that distribution partners were indicating robust demand for Symbl cannabis products and re-stocking had occurred since the end of the quarter. The company has shipped 134 kilogram equivalents of Symbl cannabis products to the OCS, AGLC and Fire & Flower Inc., with additional deliveries scheduled for the remainder of the fourth quarter.