SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) reported revenue for the three months ended June 30 fell to $8.44 million versus last year’s $9.87 million for the same time period.
All figures for the latest financial results are stated in Canadian dollars.
Slang said that the revenue decline was primarily driven by a reduction of $1.63 million in distribution sales and $960,000 in emerging market sales. On a positive note, the drop in sales was partially offset by a $1.05 million increase in the core market sales driven by growth in Vermont. Losses were flat at $3.5 million.
“In Q2 2023, Slang achieved another significant milestone with our strongest adjusted gross margins to date, showcasing our dedication to driving financial results across all areas of the business. We also used the quarter to introduce a compelling range of new high-margin products, which will continue to position us as leaders in a rapidly evolving cannabis market,” CEO John Moynan said.
“Our capacity to reduce operating expenses, streamline our vertically integrated operations, and introduce new higher-margin revenue channels in our Core Markets continues to drive our margin expansion and enhance our bottom-line growth.”
The tiny state of Vermont led to big gains for Slang. The company reported continued strong growth in the state, with revenue increasing by $1.8 million in the quarter. Slang also said that it increased wholesale sales in Vermont in the quarter by 380% from the first quarter of 2023, showing strong quarter-over-quarter growth momentum.
Slang owns two of Vermont’s five existing medical licenses and one retail license.
“Slang maintained strong sales growth in Vermont, increasing revenue by $1.8 million and $3.87 million, for the respective three-month and six-month periods ending June 30, 2023,” Moyan added.
Slang’s other core market of Colorado did not fare as well as the Green Mountain state. For the three months that ended June 30, Colorado sales declined by 18% year-over-year, while for the six months period ended that date, Colorado sales increased by 1% year-over-year, outperforming the Colorado cannabis market.
The overall Colorado cannabis market decreased by 14% and 12% year-over-year for the three and six months ending June 30, 2023, respectively.
“Despite Colorado’s slower growth, we are still outperforming our competitors in the state, with O.pen maintaining its No. 1 ranking by the BDSA as the top-performing vape cartridge brand in the state throughout Q2,” Moyan said.
“For the first six months of 2023, we increased sales of O.pen cartridges in Colorado by 16% to 415,082 units from the comparable period of 2022 as our portfolio of leading brands has continued to drive solid sales performance.”
At the end of June, Slang reported a cash balance of $6,092,072, net of restricted cash of $3,977,484, (2022 – $7,848,935, net of restricted cash of $4,070,850) and current liabilities of $6,815,429 (2022 – $9,848,764).
All of the company’s current liabilities are expected to be settled within the next 12 months. The company reported it had received an additional $1.63 million in Employee Retention Tax Credit from the Internal Revenue Service post-quarter-end.