It’s time for your Daily Hit of cannabis financial news for July 14, 2020.
On the Site
MJardin Group, Inc. (OTCQX: MJARF) reported first-quarter revenue dropped to $2.2 million versus last year’s revenue of $10.7 million for the same time period in 2019. The company also delivered a net loss of $8.1 million, which was lower than last year’s first-quarter loss of $14.8 million (all figures in Canadian dollars).
”During the first quarter we remained focused on the completion of our cultivation assets as we continue to push aggressively towards being prepared to penetrate the Canadian recreational market with our products, and ramping up revenues starting in the second half of 2020,” commented Pat Witcher, CEO of MJardin. “I am very encouraged with the progress our team is making with bringing our assets online as well as exploring strategic growth opportunities which could start contributing to our profitability in the foreseeable future.”
Mydecine Innovations Group Inc. (CSE: MYCO) (OTC: MYCOF) has entered into an agreement to buy Canadian-based NeuroPharm Inc. in a deal valued at roughly $6.3 million. NueroPharm is a developer of natural psychedelic-based treatments for mental health disorders. Mydecine recently signed an agreement with Applied Pharmaceutical Innovation (API), a translational commercial drug institute at the University of Alberta’s Faculty of Pharmacy and Pharmaceutical Sciences as it makes fast progress in the psilocybin world.
Colonel (Ret’d) Pucci, CEO of NeuroPharm said, “Our mission is to develop and bring to market treatments addressing the mental health conditions frequently experienced by veterans, including PTSD, depression, and anxiety. We understand the unique circumstances of the veteran community and are devoted to treating these substantial unmet needs. Our collaborative partnership with Mydecine will accelerate our ability to address the enormous challenge of restoring the overall wellness in the veteran, EMS and frontline personnel communities.”
In Other News
4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) reported First Quarter 2020 Financial Results Highlights with revenue for the first quarter of 2020 at $16.9m. Net losses were $8.1 million. Gross profit for the first quarter was $9.7m. Adjusted EBITDA for the first quarter was a loss of $2.8m.
Leo Gontmakher, CEO of 4Front, said, “Entering 2020, we have been laser-focused on leaning out and replicating our low-cost cultivation and production model in targeted states. We left the first quarter with a focused business model, streamlined cost structure and fortified balance sheet that has set the stage for us to accelerate growth across our core markets of Washington, Illinois, Massachusetts, Michigan, and California.”
Gontmakher added: “We are ecstatic to have reached a resolution with the Massachusetts Cannabis Control Commission as it clears the way for our long-awaited approvals for adult-use licensing in the state. We continue to execute on our plans to not only flip to cash flow positive this year but to set the stage to exit this year in a position to drive meaningful operating leverage in our business. With funded expansion already underway in Massachusetts and Illinois, we look forward to commencing construction of our Commerce, California facility before the end of the year. We are proving that our success in Washington can be replicated in every state in which we operate and are extremely confident in how the company is positioned as we enter this new season.”
Summary of Q1 2020 Key Milestones and Consolidated Results
- Total revenue for Q1 2020 was $2.93 million, up from $2.8 million from the prior year;
- Gross profit was $1.9 million in Q1 2020 compared to $2.2 million from the year prior; a decrease of 13.6% due to the addition of the three new acquisitions in 2019 not reflected at the same period last year. Some of these clinics operate with provider hours paid on an hourly basis. With seasonality impact, we see higher cost of delivery during this time but expect that the negative impact on gross margin will be short-term in nature
- Adjusted EBITDA loss was $0.6 million in Q1 2020 versus adjusted EBITDA loss of $0.7 million from the prior year due to continued improvements to the operating model and top line growth;