Cannara Biotech Announces Record-Breaking Q1 2024 Results

Published: January 31, 2024

Cannara Biotech Announces Record-Breaking Q1 2024 Results

Cannara Biotech Inc., a vertically integrated producer of premium-grade cannabis and derivative product offerings at affordable prices  with two mega facilities based in Quebec spanning over 1,650,000 sq. ft., today announced its fiscal first quarter 2024 financial and operating results for the three month period ended November 30, 2023.

“The first quarter of 2024 has been another significant period for Cannara, with record-breaking net revenues of $19.5 million, an 89% increase from the comparative quarter in 2023, and an incredible net income surge,” stated Zohar Krivorot, President & Chief Executive Officer. “As we build on this momentum in 2024, our roadmap is clear, continued execution with excellence, cost efficiencies and product innovation. This strategic expansion is not just about quantity, it is about deepening our market penetration by enriching our customer’s experience with high-quality products that stand out in the market. With a keen eye on evolving market trends and consumer preferences, we are committed to growing our market presence and product portfolio in a purposeful manner,” concluded Mr. Krivorot.

“Our first quarter results are continued solid proof of Cannara’s strong financial health and strategic approach to business operations,” stated Nicholas Sosiak, CFO of Cannara. We have seen impressive sales increases and a steady rise in adjusted EBITDA, net income, and cash flow from operations, which sets a strong base for the rest of the year. Moving into 2024, our plan is to keep growing our market share, introduce our brands to new regions in Canada, and launch products that meet our customers’ needs. We are focused on keeping our finances strong while we grow and make our operations even more cost-effective. The first quarter financial results are aligned with our financial plan and positions Cannara for what we expect to be our most successful year in terms of performance and financial achievements,” concluded Mr. Sosiak.

Fiscal First Quarter Financial Highlights

  • Q1 2024 gross cannabis revenue increased by $15.1 million, from $11.2 million in Q1 2023 to $26.3 million in Q1 2024.

  • Q1 2024 net revenues increased by 89% to $19.5 million compared to the $10.3 million of net revenues generated in Q1 2023.

  • Q1 2024 gross profit before fair value adjustments was $7.9 million, a 98% increase compared to $4 million of gross profit before fair value adjustments generated in Q1 2023.

  • Q1 2024 operating income increased to $3.4 million, a 210% increase compared to the $1.1 million of operating income generated in Q1 2023.

  • Delivered the Company’s eleventh straight quarter of positive Adjusted EBITDA of $5.2 million, a 206% increase compared to the $1.7 million of positive Adjusted EBITDA generated in Q1 2023.

  • Q1 2024 net income of $2.1 million compared to the $2,951 of net income generated in Q1 2023.

  • The Company generated earnings per share of $0.02 in Q1 2024.

  • Posted positive operating cash flows of $400k for Q1 2024, a 233% increase compared to negative operating cash flows of $300k generated in Q1 2023.

  • Free cash flow for Q4 2023 increased to $4.9 million, a 145% increase compared to the free cash flow of $2 million recorded in Q1 2023.

  • The Company has $30.5 million in working capital as of November 30, 2023.

First Quarter Sales and Operational Highlights

  • During the quarter, consistently produced from a total of 9 growing zones out of the Valleyfield Facility. In January 2024, Cannara activated its 10th growing zone reaching over 275,000 square feet of active production canopy at its Valleyfield and Farnham Facility, bringing the Company’s total production to approximately 33,500 kg of cannabis per year.

  • 1,340,000 units were sold during Q1 2024 across 3 flagship brands, a 99% increase compared to 675,000 units sold in Q1 2023 and an 11% increase compared to the 1,202,000 units that were sold in the previous quarter.

  • 3,836 kg of cannabis flower and 2,964 kg of estimated equivalent of cannabis flower used for derivates products were sold during Q1 2024, a 157% increase compared to 2,270 kg of cannabis flower and 380 kg of estimated equivalent of cannabis flower used for derivates products sold in Q1 2023 and a 15% increase compared to the previous quarter.

  • In Quebec, the Company ranked in market share as the province’s 4th largest licensed producer, holding approximately 8.7% of the market during Q1 20241.

  • In Ontario, Cannara currently holds rank as 9th top license producer by market share, with a 3.15% share of Canada’s largest cannabis market2.

  • In Alberta, the Company dramatically increased its market share in the province by 98.3% in the quarter from a 1.2% share in Q4 2023 to a 2.3% share in Q1 20242.

  • In British Columbia, the Company’s market share reached 0.84%2.

  • Increased its total national product portfolio of cannabis products by 60% from 97 SKUs in Q4 2023, to 155 SKUs at the end of Q1 2024, with product innovation in new categories such as infused pre-rolls, milled flower and budget-friendly vapes.

  • Introduced two new Tribal genetics: Jigglers and Drip Station.

  • Successfully completed its first international export sale of cannabis product to Israel, validating Cannara’s ability to export cannabis as an opportunistic and ancillary revenue stream.

Q1 2024 Capital Transactions
During the first quarter of 2024, the Company purchased 281,900 additional common shares having an average book value of $275,698 for cash consideration of $272,827. All shares purchased were cancelled. Subsequent to quarter-end, the Company purchased 5,000 additional common shares having an average book value of $4,890 for cash consideration of $4,313. All shares purchased were cancelled.

Subsequent to quarter-end, the Company granted a total of 625,000 stock options at an exercise price of $1.20, 99,000 stock options at an exercise price of $1.80 and 715,000 RSUs to employees and board members, which are subject to certain vesting conditions in accordance with the Company’s employee share option plan. The Company also extended the term of 2,435,000 stock options exercisable at $1.80 per share and 750,000 stock options exercisable at $1.00 per share by 2 years.

About Cannara Biotech Inc.
Cannara Biotech Inc. is a vertically integrated producer of affordable premium-grade cannabis and cannabis-derivative products for the Canadian markets. Cannara owns two mega facilities based in Québec spanning over 1,650,000 sq. ft., providing the Company with 100,000kg of potential annualized cultivation output. Leveraging Québec’s low electricity costs, Cannara’s facilities produce premium-grade cannabis products at an affordable price. For more information, please visit