Christina Lake Cannabis Corp. Recaps Second Quarter Results

Published: August 12, 2022

Christina Lake Cannabis Corp. Recaps Second Quarter Results

Christina Lake Cannabis Corp. recapped its second quarter financial results for the six-month period ended May 31, 2022. All amounts are expressed in Canadian dollars unless otherwise noted.

Financial Highlights – Second Quarter

Revenue$2.3 million of total revenue in Q2 FY2022, with 40% growth over Q1 FY2022 and 971% over Q2 2021. Total revenue for the six months ending May 31, 2022 totaled $3.9M which has already exceeded the full fiscal 2021 year-end total of $3.6M. Revenue growth was driven by both an expanding customer base and growing demand in premium distillate products.

Gross Margin Before Fair Value Adjustments56% in Q2 FY2022 compared to 55% in Q1 FY2022 and 67% in Q2 FY2021. The Company focused on finding production efficiencies to combat price compression in the wholesale distillate market as production and sales continued to ramp up.

Operating ExpensesTotal general & administrative expenses (“G&A Expenses”) declined by 70% in Q2 FY2022 compared to in Q2 FY2021, driven by year-over-year reductions in corporate development, marketing, and share based compensation expenses.

Net IncomeNet income in Q2 FY2022 was $22 thousand which is a $1.8 million increase from the net loss incurred in Q2 FY2022. The Year-over-year improvement is primarily driven by significant revenue growth and reduced G&A Expenses.

EBITDAThe Company posted $184 thousand in positive EBITDA in Q2 FY2022, compared to a loss of $507 thousand in Q1 FY2022 and a loss of $1.6 million in Q2 FY2021. There was a one-time gain on settlement of $259 thousand related to the redemption and cancellation of the Preferred Shares during Q2 FY2022. Year-over-year improvements again are primarily driven by significant revenue growth and reduced G&A Expenses.

Cash & Working Capital: As at May 31, 2022, the Company had $1.26 million of cash and $1.03 million in receivables. As announced on March 29, 2022, the Company entered into secured promissory note agreement in the amount of $2,000,000 bearing interest at a rate of 8% and maturing August 31, 2024. This was in connection with the redemption and subsequent cancellation of the Class B Preferred Shares. There were also 13,000,000 common shares issued at a deemed price of $0.20 in connection with the redemption. On March 15, 2022, the Company also announced that it extended $3.1 million of existing convertible debentures that were previously maturing twenty-four months from the date of issuance to forty-two months. There were no amendments to the conversion price or interest. As a result of the above events, current liabilities reduced by approximately $6.2 million as a large portion of the liabilities shifted out to long term debt.

The Company was able to optimize processing techniques which lead to consistent production of high potency distilled oils and other extracts, while adding additional processing capacity. That improvement was a key contributor to the significant increase in the revenue from the prior fiscal year. Fiscal 2021 was the first year the Company established a commercial inventory for the sale of premium extracts and cannabis products. The Company intends to finish processing its remaining biomass and oils from both the inaugural 2020 crop & 2021 crop and will look to accelerate processing of its third 2022 crop.

Ryan Smith, CFO, “our financial results demonstrate that our business model is performing and that by focusing upon high-quality, consistent cannabis oil, we can continue to grow our top and bottom lines.”

About Christina Lake Cannabis Corp.
Christina Lake Cannabis is a licensed producer of cannabis under the Cannabis Act. It has secured a standard cultivation license and corresponding processing amendment from Health Canada (March 2020 and August 2020, respectively) as well as a research and development license (early 2020). Christina Lake Cannabis’ 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. Christina Lake Cannabis also owns a 99-acre plot of land adjoining its principal site. CLC focuses its production on creating high quality extracts and distillate for its B2B client base with proprietary strains specifically developed for outdoor cultivation to enhance extraction quality. For more information, please visit and