Red White & Bloom Brands Inc. (CSE: RWB) (OTC: RWBYF) recently reported its second-quarter financial results for the period ending June 30, showing a slump in sales as the company tries to make headway in new markets. All figures are in Canadian dollars.
The Toronto-based company reported $21.9 million in revenue, down from $27.4 million in the same period last year. Net loss came out to $9.46 million versus $16.67 million in the same period last year. As of June 30, 2023, RWB had a cash balance of $3,884,521 available
to apply against short-term business requirements and current liabilities of $ 143,877,524.
Gross profit came out to $6.9 million, which is a meaningful improvement from the $4.8 million gross profit recorded in the second quarter of 2022. The company also managed to reduce its operating expenses to $9.8 million, compared to $13.3 million in 2022 and recorded an adjusted EBITDA of $300,000.
In a statement, RWB President Colby De Zen said the company is focused on expanding its premium, Platinum-branded product offerings and creating new revenue opportunities across its distribution, retail, and licensing channels.
“We continue to secure licensing opportunities for our Platinum branded products with key partners in targeted legal states and are in late-stage negotiations to add our sixth state in the early fourth quarter,” he said.
Indeed, the company’s distribution revenue fell by $4 million in the quarter and the retail revenue by roughly $4 million as well. The licensing revenue brought in an additional $2.3 million.
The company successfully launched its Platinum branded products in Canada and reduced its general and administrative expenses by nearly $4 million. Additionally, RWB invested in optimizing its manufacturing facilities to increase production capacity and drive cost efficiencies. During the period, RWB commenced construction on a new “House of Platinum” retail location in South Beach, Florida, scheduled to open in the early fourth quarter of 2023.
The on-again off-again relationship with Aleafia continues. The company also signed a letter of agreement for a potential business combination with Aleafia Health, Inc., but it was later terminated by mutual agreement without any liability or cost to either party.
Aleafia faced financial troubles and entered into a legal process to restructure its business. RWB agreed to provide debtor-in-possession financing to Aleafia during this process.
Despite the deal being shuttered, it came back to life when the Ontario Superior Court of Justice approved an agreement for RWB to potentially acquire certain assets and subscribe for shares of certain subsidiaries of Aleafia as part of the restructuring process.