Canadian cannabis company MedReleaf Corp. reported that its sales increased 8% to C$43.6 million for the fiscal year 2018, still the company reported a net loss of C$7.5 million. The fiscal fourth-quarter sales rose 16% to C$12 million and a net loss of C$812,000. The company attributed the losses to increased overhead costs and investments in recreational brands, international business initiatives, and increased research and development efforts.
“In fiscal 2018 we set new records for sales and volume, introduced brands for the adult-use market, expanded our international presence, commercialized new proprietary cannabis varieties, more than doubled our production capacity and MedReleaf was named Top Licensed Producer at the 2017 Canadian Cannabis Awards,” said Neil Closner, CEO of MedReleaf. “I’m immensely proud of our achievements to build a reputable, respected, and enduring business founded on integrity, high quality and strong execution, and I am confident MedReleaf will bring tremendous value to Aurora, as we combine to create a preeminent global cannabis company.”
Extract sales for the fourth quarter increased by C$1.4 million from the previous year to C$2.4 million and representing 20% of total sales. With the launch of topical creams, soft gel capsules, future product development initiatives, and growing industry demand, MedReleaf expects sales of extract products to account for an increasing percentage of the Company’s overall revenue in the future.
The company reported that in the fourth quarter the average selling price per adjusted gram of $8.43 fell from $8.66 for the prior year period. According to the company, the cash cost per gram sold at $1.40, a drop from the previous year’s $1.49 due to increased production and yield improvements that resulted in improved efficiencies in labor utilization and allocation of fixed costs.
MedReleaf introduced three proprietary varieties of premium medical cannabis developed by the company’s internal R&D program. It also received approval for and launched the first color-coded and strain-specific cannabis oil soft gel capsules on the market. MedReleaf closed a bought deal offering of 5,000,000 units at a price of $26.50 for aggregate gross proceeds of $132,500. It also signed an agreement to become the largest supplier to Cannamedical Pharma GmbH, a leading medical cannabis distributor in Germany with a network of over 1,800 pharmacies.
MedReleaf OTC traded stock was rising by 4% on the news of the earnings to lately trade at $20.95, down from its year’s high of $24.99. The Toronto Exchange traded stock was rising by 5% to lately trade at C$28.00 down from its 52-week high of C$31.25.