Cannara Biotech Inc. ("Cannara" or the "Company") (TSXV: LOVE) (OTCQB: LOVFF) (FRA: 8CB), a vertically integrated producer of premium-grade cannabis and derivative products with two mega cultivation facilities based in Québec spanning over 1,650,000 sq. ft., today announced its fourth quarter and fiscal year 2021 financial and operating results for the three and twelve-month periods ended August 31, 2021.
Driven by premium "AAAA" grade cannabis, disruptive pricing and exceptional consumer response to world-class products, the Company accomplished significant growth in 2021 from the commercialization of its cannabis operation in Quebec. As a result, the Company increased its total yearly gross revenue compared to prior year by 565%, from $2.6 million to $17.3 million and its fourth quarter gross revenue compared to fourth quarter of 2020 by 957%, from $613 thousand to $6.5 million, generating net income of $1.1 million and an Adjusted EBITDA of $1.4 million for a second consecutive quarter of profitability. With the initiation of commercial sales in Q2 2021 and the acquisition of the Valleyfield Facility, Cannara is well-positioned for national growth in 2022.
Selected Financial Highlights
Three-month periods ended | Years ended | ||||||||
Selected Financial Highlights | August 31, | August 31, | August 31, | August 31, | |||||
Gross revenue1 | $ | 6,270,006 | $ | 541,149 | $ | 16,290,045 | $ | 2,474,741 | |
Other income | 211,733 | 72,206 | 976,960 | 104,202 | |||||
6,481,739 | 613,355 | 17,267,005 | 2,578,943 | ||||||
Gross profit, before fair value adjustments | 3,440,799 | 49,368 | 8,741,484 | 1,665,824 | |||||
% | 53% | 8% | 51% | 65% | |||||
Gross profit | 4,526,126 | (433,060) | 10,543,099 | 1,252,509 | |||||
% | 70% | -71% | 61% | 49% | |||||
Operating expenses | 2,959,432 | 3,052,222 | 10,285,816 | 13,204,839 | |||||
Net finance expense | 434,851 | 423,898 | 1,785,426 | 1,142,025 | |||||
Net income (loss) | $ | 1,131,843 | $ | (3,909,180) | $ | (1,528,143) | $ | (13,094,355) | |
% | 17% | -637% | -9% | -508% | |||||
Adjusted EBITDA2 | $ | 1,364,415 | $ | (1,426,734) | $ | 1,503,621 | $ | (8,317,761) | |
%2 | 21% | -233% | 9% | -323% | |||||
Basic earnings (loss) per share | $ | 0.01 | $ | (0.01) | $ | (0.01) | $ | (0.02) | |
Diluted earnings (loss) per share | $ | 0.01 | $ | (0.01) | $ | (0.01) | $ | (0.02) | |
August 31, 2021 | August 31, 2020 | ||||||||
Cash | $ | 8,159,305 | $ | 7,771,177 | |||||
Accounts receivable | 2,847,725 | 26,370 | |||||||
Biological assets | 1,902,206 | 1,313,370 | |||||||
Inventory | 5,508,258 | 928,351 | |||||||
Working capital | 12,412,935 | 7,052,904 | |||||||
Total assets | 92,022,613 | 54,850,428 | |||||||
Total current liabilities | 6,833,798 | 3,476,952 | |||||||
Total non-current liabilities | 27,906,801 | 16,485,567 |
1Gross revenue included revenue from sale of goods, net of excise taxes, and lease revenues. | |||||
2Adjusted EBITDA and Ajdusted EBITDA % is a non-IFRS financial performance measure. |
Full Year 2021 Financial Highlights:
Financial
Q4 2021 Financial and Operating Highlights:
Financial
Operating Highlights:
Highlights Subsequent to Fourth Quarter
Executive Team Appointments
CEO and CFO Commentaries
"Our impressive increase in revenue this quarter and incredible overall results for this year demonstrate a year of sustained growth and profitability, one which continued to drive our net income and adjusted EBITDA up," said Zohar Krivorot, President & Chief Executive Officer of Cannara. "Our three flagship brands carved unique niches in the industry, offering handcrafted, hang-dried, slow-cured and hand-trimmed cannabis with the flower's natural properties intact. The consumer response to these products outperformed even our expectations, as we saw a remarkable increase in both new and loyal customers embracing the dynamism of our product portfolio. We are also thrilled by the continued expansion of our Cannara family, as we increasingly rely on purpose-driven leaders whose talent for strategy shape the organization's competencies. Over the course of the next fiscal, we are well-positioned for national growth and will continue to seek opportunities that support our mission, allocating efforts to existing and new activities."
"Our tremendous growth was driven by strategic retail activities in Québec, combined with well-thought-out operational development investments, the cultivation and sale licenses of our two mega facilities, and the cannabis revenues generated during the second half of 2021," said Nicholas Sosiak, Chief Financial Officer of Cannara. "The incredible performance, strong balance sheet and increase in gross profit all underscore our long-term growth strategy and commitment to our customers, against the backdrop of strong demand for our products. As we continue to generate profitable growth and outsized returns, we will move forward from a position of financial strength and are ideally positioned to showcase continued positive Adjusted EBITDA."
Fiscal 2022 Outlook
Looking ahead, the Company expects to optimize the additional debt financing from CIBC to finalize the redesign of several zones at the Valleyfield Facility to replicate the indoor cultivation environment, including growing without utilizing the sun and launch the operations at the site.
The first 25,000 square foot zone was propagated with 9,600 plants in November 2021 and next 25,000 square foot zone is planned to be propagated in January 2022.
The Company also anticipates that its existing cash resources of $8.2 million (as at August 31, 2021), along with the forecasted cashflows and financing that occurred subsequent to year-end, will enable it to fund its planned operating expenses for at least the next twelve months from August 31, 2021.
Over the course of the next fiscal year, the Company plans to allocate efforts towards several transformative milestones as a part of its long-term strategy:
Outstanding Shares
As at the date of this report, the Company had 876,481,321 common shares and 44,199,333 stock options issued and outstanding. For further information, the complete Audited Consolidated Financial Statements and Management's Discussion and Analysis for the three and twelve-month periods ended August 31, 2021 and August 31, 2020, along with additional information about the Company and all of its public filings are available at sedar.com and the Company's investor website, investors.cannara.ca.
About Cannara Biotech Inc.
Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) (FRA: 8CB) is a vertically integrated producer of premium-grade cannabis and cannabis-derivative products for the Québec and Canadian markets. Cannara owns two mega cultivation facilities based in Québec spanning over 1,650,000 sq. ft., providing the Company with 125,000kg of potential annualized cultivation output. Leveraging Québec's low electricity costs, Cannara's facilities produce craft-cultivated premium-grade cannabis products at an affordable price. For more information, please visit cannara.ca.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding "Forward-Looking" Information
This information release contains certain forward-looking information. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by statements herein, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on the Company's current beliefs as well as assumptions made by and information currently available to it as well as other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by the Company in its public securities filings, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Last Trade: | US$0.51 |
Daily Change: | -0.04 -8.00 |
Daily Volume: | 92 |
Market Cap: | US$46.270M |
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