WeedMD Inc. (OTCQX:WDDMF) released its financial results for the three months ending March 31, 2021 with revenues rising 102% sequentially to $12.9 million. This was also a big jump over last year’s revenue for WeedMD of just $6.9 million for the same time period in 2020. The losses were trimmed to $7 million from last year’s $45 million for the same time period.
The increase in revenue was impressive considering that the total dried cannabis sold in the first quarter of 2021 was 3,878 kgs versus 5,084 kgs in the first quarter 2020. The company said the decrease was mainly driven by bulk, partly offset by the growth in medical and adult-use channels. The average yield per plant was 104 grams during the quarter compared to 76 grams in Q1 2020.
“Our year-to-date, record-breaking growth reflects our robust sales strategy rooted in our optimization initiatives that drove product innovation, brand recognition, retail engagement, and a 30% increase in grade A production to consistently meet our targets and fill rates – all of which contributed to record revenues from our direct-to-consumer channels in both adult-use and medical sales,” said George Scorsis, Interim CEO and Executive Chair, WeedMD. “Our Starseed Medicinal patient activations increased meaningfully during Q1 2021, contributing to a 125% sequential increase in medical revenue growth from Q4 2020. Additionally, our expanded product availability across new distribution and retail channels saw impressive growth in the Province of Quebec – quickly growing into one of our top-selling provinces for Color Cannabis. Moreover, both our Color and Saturday Cannabis storefront presence in Canada increased 375% over the prior year, and we are now in over 75% of the 700 retail stores in Ontario. Our products are taking top billing at many provincial retail outlets, with Ontario recently adding three of our Color cultivars as ‘Core Strains’ due to their consistent availability and 100% fill rates. With the pending addition of craft cultivation brand Royal City Cannabis Co. and parent CannTx, we will continue our channel expansion – all of which will provide ongoing sustainable revenue growth.”
The company also trimmed its selling, general & administrative expenses for the quarter to $6.0 million from the fourth quarter’s $11.0 million and $6.5 million in Q1 2020. Adjusted EBITDA improved to $(0.4) million for Q1 2021, up from $(31.6) million in Q4 2020 and $(2.5) million in Q1 2020, primarily driven by growth in high-margin, direct-to-consumer and patient sales as well as the Company’s optimization initiatives
“During the first quarter, we continued to leverage our transformation initiatives in the areas of growth, efficiency, optimization, quality, and talent – all major contributors to our solid performance that led to 102% sequential net revenue growth and over $31 million sequential margin improvement,” said Beth Carreon, CFO. “With our continued emphasis on increasing our market share, securing lower cultivation costs, reducing expenses – down 66% from fourth quarter 2020 – paying down debt, and prudently managing our cash flow, we have strengthened our balance sheet to support our commercial growth into new product segments and distribution channels. We remain on track to driving further revenue growth and achieving profitability.”