IM Cannabis Archives - Green Market Report

IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) released financial results for the fourth quarter and fiscal year ended December 31, 2021. Revenues were $20.0 million in the fourth quarter, representing an increase of 309% over 2020’s fourth quarter and 35% sequentially. The net loss for the fourth quarter was $12.5 million versus a net loss of $20.0 million in 2020. The basic and diluted loss per share in the quarter was $0.19 compared to basic and diluted loss per share of $0.13 in the fourth quarter of 2020.

Revenues in 2021 were $54.3 million, representing an increase of 242% from 2020. Total dried flower sold for the year ended December 31, 2021, was 8,410kg at an average selling price of $4.90 per gram, compared to 2,586kg for the same period in 2020 at an average selling price of $5.75 per gram, derived from the lower average selling price per gram and higher sale volumes the Company gained from its acquisitions of Trichome and MYM. The net loss was $18.5 million in 2021 compared to a net loss of $28.7 million in 2020. The b asic and diluted loss per share in 2021 were $0.31 and $0.66, respectively, compared to basic and diluted loss per share of $0.74 in 2020.

“Our revenue growth of 242% to a record of over $54 million in 2021 is a direct result of executing on our strategy to build a world-class operating platform for the premium cannabis market,” said Oren Shuster, Chief Executive Officer of IMC. “The network of pharmacies we have acquired in Israel, which includes the country’s largest online pharmacy business, supports a tech-enabled expansion of our patient base to fortify our position as one of the leading retail medical cannabis providers in the country. In Canada, our premium WAGNERS brand and ultra-premium Highland Grow continue to gain market share, with retail sales in Ontario increasing over 50% in Q4 2021 as compared to Q3 2021[3]. With continuous improvements in yields and quality, we have both the capacity and the desired quality attributes to support our discerning customer and patient needs in our addressable markets.”

The company said cash and cash equivalents totaled $13.9 million on December 31, 2021, compared to $8.9 million on December 31, 2020.

Looking ahead IMC said it expects first quarter 2022 revenue and gross margin to increase sequentially. The company said it expects to release first quarter financial results on or around May 16, 2022.

IM Cannabis Corp.  (CSE: IMCC) (NASDAQ: IMCC) provided preliminary unaudited financial results for the three months and fiscal year ended December 31, 2021. Preliminary revenues for the fourth quarter were at least $20 million, representing an approximate increase of at least 37% sequentially and at least 308% compared to the same prior-year period.

Preliminary revenues for fiscal year 2021 were at least $54 million, representing an approximate increase of at least 240% from fiscal year 2020. Preliminary gross margin before fair value adjustment was at least 22% in fiscal year 2021.

“We built significant momentum across our operating platform in 2021, as evidenced by our annual revenues growth of at least 240% to a record of at least $54 million,” said Oren Shuster, Chief Executive Officer of IMC. “In Israel, we have become among the largest distributors of medical cannabis and are well positioned to capture market growth today and in the future with the potential for recreational legalization. We continue to capture meaningful market share in the premium segment in Canada driven by our staunch focus on cultivation excellence and increasing brand recognition of WAGNERS and Highland Grow. Importantly, our execution with our recreational and medical operations in Canada and Israel and our global distribution expertise provides us with the blueprint to effectively capitalize on the substantial German market opportunity as it liberalizes its cannabis laws.”

In the fourth quarter, the company announced the anticipated 2022 launch of WAGNERS brand in the rapidly evolving German medical cannabis market. After the quarter ended, the WAGNERS brand was launched in Israel.

“As we move through 2022, we remain focused on realizing synergies across our supply chain while scaling operations in the three largest federally legal markets where we currently operate, which makes IMC uniquely positioned to emerge as the leading purveyor of premium cannabis on a global scale. I look forward to providing further updates to the market during our upcoming earnings call later this month,” concluded Shuster.

IM Cannabis Corp. (NASDAQ: IMCC) is buying R.A. Yarok Pharm Ltd. also called Pharm Yarok, Rosen High Way Ltd., and High Way Shinua. Ltd. by IMC Holdings Ltd., a wholly-owned Israeli subsidiary. The deal is valued at C$4.6 million.

The acquisition is expected to integrate assets that include a license to sell medical cannabis to patients (including the ability to sell online), a large customer service center, a virtual store, and online properties, intellectual property, a logistics, and warehousing center with specialized storage space for over 350 kg of medical cannabis as well as a large customer base.  IMC said it expects to be able to consolidate the financial results of Pharm Yarok, Rosen High Way, and HW Shinua as of the date of executing the definitive share purchase agreements and prior to Closing. The collective current annual revenue run rate of Pharm Yarok, Rosen High Way, and HW Shinua is approximately $8 million with an expected positive EBITDA of approximately $1 million.

“The Israeli medical cannabis market continues to grow and evolve very rapidly. Pharm Yarok is one of the leading medical cannabis retailers in Israel, selling approximately 1,000 kg of medical cannabis per year and serving over 2,000 patients per month. The Acquisition significantly advances our retail expansion strategy, initiated earlier this year through the acquisition of Panaxia-to-the-Home’s distribution and in-house pharmacy activities,” said Oren Shuster, CEO of IMC. “We expect that the continuation of our vertical integration strategy will increase our purchasing power with suppliers, create potential synergies with our established call center and online operations and provide for additional margin on direct sales and up-sells across a growing range of products. We welcome the Pharm Yarok and Rosen High Way management teams and employees, along with their expertise in retailing and branding.”

Acquired Companies

Pharm Yarok is a leading medical cannabis pharmacy located in central Israel. Pharm Yarok serves more than 2,000 medical cannabis patients per month. Pharm Yarok is located in Netanya, a city in central Israel, and has been serving patients since June 2020.

Rosen High Way is a trade and distribution center providing medical cannabis storage, distribution services, and logistics solutions for cannabis companies and pharmacies in Israel and HW Shinua is an applicant for a medical cannabis transportation license from the Israeli Medical Cannabis Unit. If the license is received it would permit HW Shinua to transport large quantities of medical cannabis to and from Pharm Yarok’s pharmacy and Rosen High Way’s distribution center and to and from third parties in the medical cannabis sector, including medical cannabis growing facilities, pharmacies, manufacturers and distribution centers across Israel.

The transaction consists of approximately $4.6 million in cash, of which $1.3 million shall be invested in IMC in consideration for IMC’s equity by the shareholders of Pharm Yarok, Rosen High Way, and HW Shinua.

International cannabis company IM Cannabis Corp. (NASDAQ: IMCC)  entered into a deal to buy MYM Nutraceuticals Inc. and its licensed producer subsidiary Highland Grow Inc. in a deal that is said to be immediately accretive. The acquisition reinforces IMC’s strategy as a leading global premium cannabis producer and purveyor. Following completion of the Transaction, expected to occur before the end of the second half of 2021, IMC will continue to operate under the IM Cannabis Corp. name with its common shares trading on the NASDAQ Capital Market and Canadian Securities Exchange under the ticker symbol “IMCC“.

“Acquiring MYM is consistent with IMC’s focus on premium and super-premium segments of the cannabis market for consumers and patients in all markets. The Transaction also demonstrates our disciplined approach to acquiring accretive companies that create financial and operational synergies and result in additional opportunities to export premium cannabis products to Israel and Germany,” said Oren Shuster, CEO, IMC. “With coast-to-coast distribution, including a strong leadership position in Eastern Canada, Highland Grow will further enhance our distribution capabilities and fast-track our entrance into new markets.

The acquisition is expected to be immediately accretive to IMC’s financial results in 2021 and beyond. Highland Grow is expected to generate net revenue of $29 million and $38 million and gross margins of 34% to 36% in 2021 and 2022, respectively. Inclusive of potential synergies, it is estimated that the acquisition of Highland Grow implies a purchase multiple of approximately 3.4x EV/revenue and 10.6x EV/EBITDA for 2021 and 2.3x EV/revenue and 6.7x EV/EBITDA for 2022.

IM Cannabis said in a statement that buying MYM and its subsidiary Highland Grow will expand its focus on premium and super-premium branded cannabis products in Canada. With coast-to-coast distribution, including a strong leadership position in eastern Canada, Highland Grow enhances IMC’s distribution capabilities, fast tracks the entrance of JWC (expected soon to be relaunched as “Wagners“) into new markets, and is expected to drive significant incremental revenue and EBITDA growth. With the demand for premium-indoor grown cannabis increasing internationally, IMC’s medical patients in Israel will now have even more options from which to choose. Highland Grow has experienced meaningful revenue growth over the last six months, is currently profitable on an EBITDA basis, and is expected to be a meaningful contributor to IMC’s revenue and profitability trajectory in 2021 and beyond.