Psychedelics maker Red Light Holland Corp. (CSE: TRIP) (FSE: 4YX) (OTC: TRUFF) posted earnings results that showed climbing revenue as it builds out its ‘shroom ventures in North America and the European Union.
The Ontario-based mushroom producer and seller filed its financial results for the second quarter ended Sept. 30.
RLH brought in $736,000 revenue in the quarter, up 51.6% versus $486,000 in the same time period last year. Net loss was $1.3 million, an improvement versus $1.8 million in fiscal 2022’s second quarter.
Earnings were for zero cents per share, versus one cent per share a year ago.
CEO Todd Shapiro attributed trimmed losses – $288,000 gross profit (39.1% margin) – to “improvements to production efficiencies and prudent spending.” The company reported gross profit of $157,000 during the same period last year, or 32.3% margin.
“Our revenue growth represents both the consolidation of recent acquisitions and increased activity levels,” he said. “We are proving that as a company involved in the psychedelic sector that revenues are happening now. As we move forward, we will continue to focus on top-line revenue growth and its conversion to the bottom line.”
Shapiro also provided an update on the July acquisition of two retail stores in the Netherlands, which made the company officially vertically integrated. The acquisition also serves as a way for the company to be retail-ready should more opportunities arise.
“The integration of our two new retail stores in Oss and Utrecht in the Netherlands is now complete, and we continue to develop our Wellness World brand which is expected to roll out early in calendar 2023.,” Shapiro added. “Acadian Exotic Mushroom Ltd., now operating at approximately 80% capacity, continues to increase deliveries of gourmet exotic mushrooms from our production facility in New Brunswick.”
The company last month closed on a deal to acquire a Netherland-based mushroom home grow it producer MiniChamp B.V., which has a production farm and existing sales distribution channels throughout the EU. Red Light Holland plans to use that network to help launch its new psilocybin wellness brand, Mistercap, which will be selling home grow mushroom kits.
“We have learned a ton since acquiring a majority stake of Happy Caps Mushroom Farm back in June of 2021, and we are proud of their growth and remain confident with our decision to focus on the grow-at-home mushroom kit business strategy,” Shapiro said.
The company partnered with Wiz Khalifa, who plans on leveraging his social media presence to promote Mistercap’s products in Canada, the U.S., and the EU, especially as more states begin to allow the use of certain psychedelics.
“We are already focused on lining up supply and production of the Mistercap products in anticipation of their launch,” Shapiro said. “I’m tremendously excited to present our brand unveil in the coming weeks. In my opinion – it’ll be worth the wait.”
With a cash balance of $20.7 million, including $20.5 million of cash and cash equivalents, CFO David Ascott said that the company’s financial position and liquidity “remains strong, and the company currently has sufficient capital to fund its ongoing business development and future growth and expansion plans for the foreseeable future.”