Christina Lake Cannabis Provides Financial Results for the Third Quarter of its Fiscal 2021 Year

Published: November 2, 2021

Christina Lake Cannabis Provides Financial Results for the Third Quarter of its Fiscal 2021 Year

Christina Lake Cannabis Corp. provided a summary overview of financial and operational results for its fiscal Q3 2021 (three and nine months ended August 31, 2021). During this period, the Company had its highest sales quarter since inception with repeat orders coming from key industry buyers and producers of consumer products including vape and edible manufacturers. For a comprehensive overview of the Company’s disclosed developments in its fiscal Q3 2021 including the Management’s Discussion and Analysis (“MD&A”) dated October 29, 2021, please access the Company’s profile on SEDAR.

All monetary figures in this press release are in Canadian dollars unless specified otherwise.

Primary Highlights for Christina Lake Cannabis in Q3 of Fiscal 2021 (ended Aug. 31, 2021)

  • Gross Revenue increased +495% in Q3 2021 to $1,290,000 compared to $216,738 in Q2 2021;
  • General and Administrative Expenses decreased 10.4% in Q3 2021 to $1,666,031 compared to $1,858,867 in Q2 2021;
  • Total of $24,808,196 in assets and a net working capital balance (current assets less current liabilities) of $9,556,801;
  • Currently engaged in the processing of its stock of dried cannabis biomass into various extracts including distilled and winterized oils, kief, and additional extracted products for sale to other Licensed Producers;
  • Sales in the quarter were primarily derived from distillate and kief as production continued to ramp up for both product lines;
  • The gross margin percentage for the three-month period was 59% before fair value adjustment. In the comparative period, the Company was not in a revenue-generating position; and
  • ​​On October 26, 2021, the Company successfully completed harvesting its second crop which has already proven to be a higher yield than the inaugural crop with better quality biomass through enhanced harvesting techniques.

Joel Dumaresq, Chief Executive Officer and Director of Christina Lake Cannabis commented, “This was a productive quarter for the Company as we continued our revenue growth with the support of steady demand for our cannabis extracts. The needs of Licensed Producers have become increasingly sophisticated as product offerings under ‘Cannabis 2.0’ are creating greater demand for both medicinal and recreational use cases. Under CLC’s commercial sales leadership, we’ve been able to align a healthy supply of distillate oils and kief with the needs of a diverse base of Licensed Producer accounts across Canada. Now that our 2021 crop has been completely harvested, our second growing season has proven to have a greater yield than the inaugural crop with a higher quality of biomass that can be attributed to advanced harvesting techniques.”

Christina Lake Cannabis Fiscal Q3 2021 Financial Summary

Three months ended Nine months ended
Three and nine months period ended, Notes August 31,
2021
$
August 31,
2020
$
August 31,
2021
$
August 31,
2020
$
Revenue
Revenue from sale of goods 1,290,722 1,569,881
Cost of sales (532,428 ) (623,933 )
Gross profit before fair value adjustments 758,294 945,948
Changes in fair value of inventory sold (742,593 ) (918,074 )
Gross profit from sale of goods 15,701 27,874
Fair value change on growth of biological asset 5,430,173 3,046,237 5,430,173 3,046,237
General and administrative expenses
Accretion 8,9,11 188,880 79,129 382,214 134,989
Consulting fees 12 122,133 343,973 328,733 450,367
Communication expense 1,975 69,021
Corporate development 365,872
Depreciation 4 77,080 7,166 381,028 14,331
Foreign exchange (4 ) (451 )
Interest expense 9 182,066 109,189 452,711 176,902
Insurance 21,478 10,088 62,370 30,422
Management fees 12 36,000 108,000
Marketing 1,574 403,884
Nursery expenses 30,156 (73,385 ) 36,864 65,466
Office and miscellaneous 49,589 50,227 229,784 236,653
Professional fees 240,963 106,941 398,095 222,266
Property taxes 30,566 25,144
Salaries 12 318,237 145,431 1,037,998 652,711
Share based compensation 12,13 372,531 1,272,522 924,935 1,429,777
Repairs and maintenance 17,475 35,579
Regulatory fees 5,898 117,193 84,155 155,205
Total general and administrative expenses (1,666,031 ) (2,168,474 ) (5,331,358 ) (3,594.233 )
Other items
Accounts payable write down (38,528 ) 32,817
Fair value preferred shares 13 510,521
Loss on sale of equipment 4,900
Total other items (476,893 )
Net and comprehensive income (loss) for the period

$

3,779,843

$

877,763

$ (350,204 ) $ (515,179 )
Gain (loss) per share – basic and diluted $ 0.03 $ 0.01 $ (0.00 ) $ (0.01 )
Weighted average number of common shares outstanding 112,607,372 81,004,447 105,639,215 78,071,770

Notable Business Updates

Attaining Key Benchmark of Tetrahydrocannabinol (“THC”) Concentration

In a press release dated June 29, 2021, the Company announced that its distillate oils had attained an average THC concentration of 90.4%, a threshold considered to be desirable in the cannabis industry. With high-concentration distillate oils, Licensed Producers can manufacture a wide variety of goods in categories to include food and beverage, personal care, vaping, and medicinal products.

Performance of Experimental Cannabis Strains Under Natural Sunlight

In addition to the Company’s seven “proven” cannabis strains comprising the majority of its 2021 crop, more than 90 “experimental” strains have also progressed to the outdoor testing phase and performed exceptionally when grown under natural sunlight. The Company intends to incorporate certain “experimental” strains grown outdoors this year into its strain selection for the 2022 growing season.

About Christina Lake Cannabis Corp.
Christina Lake Cannabis Corp. is a licensed producer of cannabis under the Cannabis Act. It has secured a standard cultivation licence and corresponding processing/sales amendment from Health Canada (March 2020 and August 2020, respectively) as well as a research and development licence (early 2020). CLC’s facility consists of a 32-acre property, which includes over 950,000 square feet of outdoor grow space, offices, propagation and drying rooms, research facilities, and a facility dedicated to processing and extraction. CLC also owns a 99-acre plot of land adjoining its principal 32-acre site, which enables the Company to grow at a much larger scale. For more information about CLC, please visit: www.christinalakecannabis.com

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