concentrates Archives - Green Market Report

Adam JacksonAugust 15, 2022
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4min1920

Rubicon Organics Inc. (OTCQX: ROMJF) delivered mostly positive results on Monday as the company begins to post profits — buoyed by its premium flower and pre-roll line. The Vancouver cultivator released its financial results for the second quarter ending June 30, 2022. Rubicon reported approximately $8.8 million in net revenue during the period, a 92% gain versus the same period last year.

According to SEDAR filings, the company also reported a second-quarter net loss of $1.2 million versus a $1.5 million loss in the previous quarter; and a net loss of $5.1 million in the same period last year. The earnings were for a loss of two cents per share, versus a loss of three cents per share in the previous quarter.

“Rubicon Organics has reached profitability due to the continued success of Simply Bare Organic as Canada’s #1 premium flower and pre-roll brand and the impressive market share gains of our newly launched mainstream brand 1964 Supply Co.,” said CEO Jesse McConnell. “Our production facility at the end of Q2 2022 was delivering yield run-rates capacity expectations of 10,000kg and we are beginning to realize the benefits of operating leverage as our production costs remain relatively flat, excluding some minor cost creep due to inflationary pressures…I am also pleased to increase our guidance to achieve positive Adjusted EBITDA for FY 2022 and as well as operating cash flow positive in the second half of 2022.”

Rubicon’s revenue grew $3.7 million over the quarter — representing year-on-year revenue growth of 92% and 61% over the three and six months of this fiscal year.

In total, it reported $11.6 million in total revenue. However, the company’s growth in concentrate sales triggered an increase in excise tax worth $2.76 million, according to Sedar filings — offsetting net revenue gains versus the prior year. Concentrates attract higher excise taxes as a percentage of revenue than flower products.

Rubicon posited a three-pillar strategy this year focused on yield and quality, improving product mix to optimize margin, and obtaining certifications for international access, “each of which we expect will have a positive impact on our profitability and cash flow.”

“Our strategy has proven successful as evidenced by Rubicon achieving 8.6%3 market share of the premium flower and pre-roll market in the second quarter of 2022,” the company said in the release. “We continue to expect the premium market to outpace the growth of the total market in Canada as it has done in other leader markets and believe that Rubicon Organics is well positioned to take advantage of this momentum as consumer preferences shift.”

The company sees itself as operating cash flow positive and adjusted EBITDA profitable for the rest of this year, too.

“The growth in the rate of sale of our Simply Bare Organic and our 1964 Supply Co. brands has led us to being one of the fastest growing licensed producers in Canada in Q2 2022,” McConnell said. “We expect to see our products in international markets in either late 2022 or the first part of 2023. ”


Adam JacksonAugust 3, 2022
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5min3020

Red White & Bloom Brands Inc. (CSE: RWB)(OTC: RWBYF) delivered its fourth-quarter and full-year earnings report, as well as its first-quarter report. The news comes after the company postponed the release in May due to multiple delays in their year-end audit. All figures are in Canadian dollars.

First Quarter

RWB said that revenue for the first quarter this year was $28 million, a record gain for the company, who saw revenues rise up from $10.7 million in the fourth quarter. RWB has not released an earnings report since last November’s third-quarter results. The company attributed the increase to vape product sales by Platinum Vape (PV) California, revenue generated by PV Michigan, sales by RWB operations in Florida and revenue from the acquiring PharmaCo in February.

RWB posted a net loss of $11.3 million for the period with an adjusted EBITDA gain of $360,000. The company has around $5 million in working capital and $5 million cash on hand in the first quarter.

RWB said that its gross profits for the first quarter were $9.2 million, a sequential increase of 44% from gross profits of $6.4 million in the same quarter last year. The increase was reduced by $2.45 million on biological assets and a gain of $270,000 in sold inventory.

“With full operational control and a clear road map, Florida closed and certainty of our ability to complete the closing of the Michigan acquisition, we turned our attention to completing a multi-stage restructuring and “right-sizing” of the business to leverage our strategy long term,” CEO Brad Rogers said. “This included exiting Illinois and the sale of our assets in that state, which enabled the company to pay off over $55 million of liabilities in Q2 of 2022 and reduce our operational and interest expenses by over $20 million per year. These reductions of liabilities and expenses will positively impact our results for fiscal 2022 commencing in late Q2 of this year.”

Going Concern Remains

Despite the improvements in revenue, RWB continues to tell investors in its filings that it remains a going concern. It stated, “As at March 31, 2022, the company has accumulated losses of $128,303,346 (December 31, 2021 – $116,877,562) since inception, and for the three months ended March 31, 2022, the company incurred a net loss of $ 11,757,188 (March 31, 2021 – $56,887,862), and had a working capital deficiency of $144,735,705 (December 31, 2021 – working capital deficiency of $55,219,691).” The company has said it may need additional funding.

Full Year Results

The company reported revenue from continuing operations for the year ending December 2021 of $37.3 million. This increased by $17.9 million over the $19.3 million in 2020. The jump in sales was related to vape product sales generated by PV California, packaging revenue generated by PV Michigan and cannabis product sales generated by RWB operations in Florida. The company also delivered a comprehensive loss of $84 million for 2021 versus a loss of $20 million in 2020.

“On the finance front, we have made significant changes to reduce our overall operational costs and reduce debt servicing payments,” Rogers said. “Some of the savings are a result of exiting the state of Illinois, but we have also seen a reduction of operational expenses and as a result, we are no longer incurring the start-up costs associated with scaling initial operations in Florida, one-time expenses associated with the M&A and divestitures we have completed over the last two years and overall greater attention to reduced spend across the organization. With the first half of 2022 now behind us, we are committed to driving profitable growth throughout the organization as we set our eyes to achieving positive EBITDA by the end of this fiscal year.”

 


Debra BorchardtJune 16, 2022
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7min9350

Concentrates, like wax, shatter or resin products are more popular in mature cannabis markets. As prices have dropped and familiarity with the product grows, this niche product is slowly finding its place on cannabis shelves and in consumers’ baskets. Headset recently did a deep dive into a new report titled, “Cannabis Concentrates” to see what was happening in the concentrate market and found big differences between Canadian consumers and U.S. consumers. There were also differences in market share in established markets versus newer markets. 

According to Headset, whose data comes directly from sellers, concentrates are the fifth highest revenue category in both the US and Canada. The report also found that younger customers spend relatively more money on concentrates demonstrating their willingness to try something new versus older consumers who want to stick with traditional flower. Men are also more likely to buy concentrates than women. Typically the effect from a concentrate is stronger and more powerful and female cannabis consumers tend to migrate towards smaller dosage products. One vape company described a dollop of wax as being equivalent to smoking 15-20 joints. 

Canadians Growing To Like Concentrates

The concentrate category is increasing in Canada, whereas it’s declining in the U.S. Headset wrote, “This category has increased in Canada (up from 2.9%) and decreased in the US (down from 9.5%). In Canada, Concentrates are the third best-selling ‘Cannabis 2.0’ category behind Vapor Pens and Edibles.” The report also wrote, “The Hash segment, for example, is quite popular in the Canadian market and captures 30% of total Concentrate sales while only accounting for 2% of sales in the US.” Hash is another term for concentrates and really the original term for compressing parts of the cannabis flower until it becomes a sticky residue. Still, the market in Canada seems to have plateaued at 4% of total sales and has dropped in the U.S. In Canada, Alberta has the highest market share with 4.5% of sales to Concentrates, while Ontario has the lowest at 3.6%. After hash, Canadians prefer shatter (25%), live resin (22%), and then rosin (5%). 

Chart provided by Headset

U.S. Consumers

Even though the category has grown in Canada and declined in the U.S., the American market remains larger than the Canadian market. The report said, “US cannabis state markets have higher Concentrate market share than any Canadian provincial markets. Interestingly, the US states with the highest market share in this category are the oldest: Oregon, Colorado, and Washington. Massachusetts, at the low end, is the only US market with less than 5% of sales to the Concentrates category so far this year.”

In Colorado and Oregon, concentrates command 12% of the market and in Arizona and Washington, it’s over 9% of the market. Illinois and Michigan both clock in at 7% of the market for concentrate purchases. Live resin is more popular in the U.S. with 34% of the market so far in 2022 followed by rosin at 12% and then shatter at 7% and hash at 2%.

Chart provided by Headset

Cheaper Too

Headset found the average equivalized (EQ) price of concentrate products in both Canada and the US had seen some serious volatility. “We can see that the average EQ price of this category began at nearly $50 before plummeting below $30 and then climbed right back up to the high-$40s by the end of Summer 2020. Since then, the average EQ price of Concentrates in Canada has been steadily decreasing and was $25.97 in May 2022, a 49% drop since January 2020 ($48.99).” It went on to add, “In the US, Concentrate prices have been more steady as the market is much more mature than in Canada. However, there have been some shifts with a fairly steady decline in pricing since August 2020. In August 2020, the average EQ price for Concentrates in the US was $21.86. In May 2022 the average price per gram was $17.85, a decrease of 18%.” The 1 gram package size seems to be the standard in both markets. 

In Closing

The concentrate market has its own holiday it likes to celebrate that brings attention to the category. July 10 or “Oil Day” celebrates all extracts as 7/10 upside down resembles the word oil. Last year, the holiday seemed to have fizzled out as the Fourth of July grabbed all the attention for holiday sales. Still, this is a loyal consumer who is a connoisseur of the concentrate and can’t be ignored.


StaffFebruary 12, 2021
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Editors Note: This is a guest post.

 

Cannabis concentrates are perhaps the trickiest form you may come across. They are highly potent, and the consumption techniques are also complicated, whether you choose to smoke, vape, or dab. Still, using the right gear can make things a lot simpler for beginners, and you get better with practice and experience. The choice of equipment depends on several factors, so you need to consider them while taking your pick. Here are some helpful tips that you can follow while choosing the right gear for using concentrates.

Size and convenience 

You will want to choose your concentrate gear according to your skill level. For a beginner, the simplest is the best because it will be easy to handle and use. Handling the potency and managing dosages for cannabis concentrates may be hard enough for you. So you will want only the gear that is easy to use. Size also matters because larger pieces can be difficult to operate. Thankfully, there are lots of choices in bongs and bubblers, from large, table-top pieces to small, handheld ones.

Method of consumption

The next factor to consider is the method of consumption and the form of concentrate. When it comes to types of concentrates, you come across a lot, from wax to shatter, resin, rosin, oil, hash, and more. Consumption methods also vary, depending on your preference, and the equipment you use will differ accordingly. For beginners who want to learn how to smoke resin, a bowl gives you a good start. You can graduate to a bong or bubbler as you learn the ropes. Similarly, you will need a vaporizer for vaping a concentrate and a dab rig for dabbing it.  

Quality of smoke

The quality of smoke makes all the difference when it comes to experience, both for beginners as well as seasoned users. You will want cooler, smoother smoke that gets you high without irritating your throat or lungs. A bong with an ice catch is a good option as it helps in cooling the smoke before you inhale it. If you are more experienced, you can work with a nail and rig as it lets control the temperature for an optimal hit. Lower temperatures deliver a smoother vapor, while higher temperatures make it harder-hitting.

Durability

When you spend on smoking or dabbing gear, you will want it to last. Durability is another factor that needs attention when you buy it as a beginner. Look for ones made with high-quality material, even if it means that you have to spend a little extra. You need to be extra careful about glass gear because there are chances of dropping the bong when you do not have much experience of using it. Always stick to a reputed seller because they go the extra mile with quality and durability.

These factors will simplify your selection of the right equipment if you are just starting with concentrates. The best thing to do is to start with the basics. Gradually, you can move to more complex gear if you want to take your experience to the next level.


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