Emerald Health Therapeutics, Inc. (CSE: EMH) (OTCQX: EMHTF) reported its financial results for the second quarter ending June 30, 2021, with total sales of C$3.7 million, which increased over the first quarter’s C$2.6 million. The net losses for Emerald Health increased to $13.9 million over the previous quarter’s net loss of $2.9 million. The net loss included a $10.67 million non-cash impairment of an asset held for sale.
“In the second quarter we started to see incremental progress in executing on our renewed business strategy, resulting in a 42% sequential quarterly increase in gross revenue to $3.8M, with a concurrent significant improvement to just a small negative gross margin. Our net operating loss and cash flow utilization have improved and we ended the quarter with over $32M in working capital, providing us with significant runway,” said Riaz Bandali, President & CEO of Emerald. “As per our objectives, we kept our general and administrative costs flat (excluding non-cash items) while increasing our investment in sales and marketing by 33% and in R&D by more than double.”
Emerald said that sales in the adult-use channel represented 78% of total revenue, and volumes sold in the channel were 33% higher in the second quarter versus the first, while the average selling price per gram dropped from $3.65 in the first quarter to $3.28 in the second.
In July, Emerald said it retained a listing agent to assist in the sale of its licensed greenhouse cannabis production facility in Greater Vancouver, BC. Emerald had ceased operations at this facility on March 31, 2021, but continues to operate its defined-scale production facility for premium cannabis in St. Eustache, Quebec, and its two separate new product development and processing facilities in British Columbia.
After the quarter ended, Emerald introduced its new Fuse lifestyle brand and latest product line, the Nano Shot, a 30 ml flavored cannabis-infused beverage formulated with 10 mg of THC and a nanoemulsion formulation offering consumers a more predictable, rapid onset and shorter controlled duration of effects. The plant-derived Nano Shots are gluten-free and vegan and come in multiple flavors. In July, the beverage became available to Emerald’s patients via prescription and consumers at licensed cannabis retailers and online in British Columbia, Alberta, and Manitoba, with subsequent orders from two additional provinces.
Bandali added, “With our commitment to science-based innovation and our Defined Dose focus to offer health, wellness, and medical consumers more precise and predictable dosing and a more consistent cannabis consumption experience, our R&D efforts resulted in the launch of our new SYNCTM Tabs and, in July, FUSE Nano Shots. Our SYNC medical product sales are robust and our Quebec Souvenir brand, which now includes a Souvenir-branded strain-specific oil, has started to establish additional sales momentum in Quebec. We have also seen modest but increasing product demand in Europe via our Danish partner, Stenocare.”