Red White & Bloom Brands Inc. (CSE: RWB) (OTCQX: RWBYF) cut its losses sequentially and year-over-year in the third quarter, but is still leaking money.
The Canada-based company reported a C$6.5 million loss for the three months ended Sept. 30 and C$25.4 million lost in the calendar year-to-date.
That’s an improved performance from the second quarter, when RWB lost C$9.4 million, and from a year ago, when the company lost C$8.4 million, but at the same time, revenue has trended down.
For the third quarter, RWB posted C$20.1 million in revenue, down year-over-year from C$25.5 million and C$21.9 million sequentially. For the first nine month of the year, RWB’s revenue cam in at C$69 million, down from C$80.9 million at the same point in 2022.
The Toronto-based marijuana company – which does business in the U.S. in multiple states – is still committed to expansion while also cutting operational costs, President Colby De Zen said in a statement. De Zen highlighted RWB’s entrance to the Ohio medical cannabis market via a licensing deal following the successful recreational cannabis legalization vote earlier this month.
He also noted the likely acquisition of distressed competitor Aleafia Health Inc. Although the deal has yet to be finalized, is expected to close by Dec. 15 and should give RWB more assets and financial flexibility. He also said the company is poised to expand its product offerings in Florida, one of the seven U.S. markets in which it has a footprint.
“Throughout the first nine months of 2023, our efforts have focused on cost reduction, eliminating low-margin products and non-core revenue streams, while placing a heightened emphasis on higher-margin products,” De Zen said. “With the impending completion of the Aleafia acquisition, RWB is poised to emerge as a leading international branded cannabis company as we head into 2024.”
The Ohio entry was made possible by a deal inked on Nov. 3 with a vertically integrated local distributor that it declined to name. The deal will allow RWB to begin wholesaling its Platinum Vape brand cartridges before the end of the year to over 90 dispensaries, the company said in a release.
RWB also does business in Arizona, California, Massachusetts, Michigan, Missouri, and Canada.
As of Sept. 30, RWB had C$325.8 million in assets, including C$2.6 million in cash, against C$328.4 million in total liabilities.