On May 30, 2018, Maricann Group Inc. announced the filing of its financial results for the quarter ending on March 31, 2018. It was a tough quarter for the company as profits took a precipitous tumble from $1,143,167 in Q1 of 2017 to $600,591 for Q1 of 2018.
The steep decline in revenue was due in large part to a bulk transaction in Germany that the company had planned to take place during the quarter. However, that transaction was pushed back to the second quarter because of the time it took the company to obtain a European Medicines Agency Good Manufacturing Practice certification. Current unaudited revenue for the second quarter so far is purportedly $905,000.
The company realized a net loss of $11.4 million for a loss per share of $0.11, which is drastically lower that its loss in the same period in the previous year; which was $66.8 million with a loss per share of $1.53.
A huge portion of the company’s losses stem from its general and administrative costs Over the last year, G&A expenses have grown tremendously, from $1.7 million to $6.6 million. Even if Maricann is able to sell all of its biological assets and inventory, which totals to approximately $1.7 million, G&A expenses would still outpace revenue, leaving some investors to worry about the company’s long term balance sheet.
With legal adult cannabis sales poised to launch in Canada in the next few months, and with Maricann set to begin exporting into Europe, the company should experience a boost in revenue; which means the next few quarters will be critical to the company’s long term success.
In a statement, Maricann CEO Ben Ward expressed support for the company’s current direction and reiterated the idea that creating better margins for the company’s products is more important than short term revenues.
“We maintain our position that establishing sustainable baskets of margin for our products that will be preserved over the long term is more important than immediate gross revenue. We base all our business decisions in the interest of long term value creation for our shareholders,” commented Ward.