Rubicon Organics Reports 2023 Financial Results

Published: April 2, 2024

Rubicon Organics Reports 2023 Financial Results

Rubicon Organics Inc., a licensed producer focused on cultivating and selling organic certified, premium cannabis, today reported its financial results for the year ended December 31, 2023 (“Q4 2023”). All amounts are expressed in Canadian dollars.

“2023 served as a cornerstone year for Rubicon. We’ve solidified our presence with established brands fueled by our renowned reputation for quality flower, now expanding into diverse product formats exemplified by our success of launching edibles under 1964 Supply Co. and Wildflower. Looking forward to 2024, we’re thrilled to unveil several exciting initiatives, including the highly anticipated launch of full spectrum extract (“FSE”) resin vapes under 1964 Supply Co. which I view as our next significant growth opportunity” said Margaret Brodie, CEO.

Janis Risbin, CFO, said “I am pleased to announce that Rubicon has attained its seventh consecutive quarter of positive Adjusted EBITDA and sixth consecutive quarter of positive operating cashflow. Despite the challenges faced in the latter half of 2023 due to competitive pricing pressures in the Canadian cannabis sector and broader negative macroeconomic factors affecting Canadian consumers, we are optimistic about the prospects in 2024. With Rubicon’s prominent position as a leading force in the premium cannabis market, I am enthusiastic about the opportunities that lie ahead.”

1 Adjusted EBITDA is a non-GAAP measure that is calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. See Non-GAAP Financial Measures for details on the Adjusted EBITDA calculation.
2 Free Cash Flow is a non-GAAP measure that is calculated as earnings (losses) from operations before interest, tax, depreciation and amortization, share-based compensation expense, and fair value changes. See Non-GAAP Financial Measures for details on the Free Cash Flow calculation.
3 Hifyre data for premium flower & pre-rolled products covering twelve months ending December 31, 2023
4 Hifyre data for topical products covering twelve months ending December 31, 2023
5 Hifyre data for premium concentrate products covering twelve months ending December 31, 2023
6 Hifyre data for premium edible products covering three months ending December 31, 2023
7 Brightfield Group Canada Budtender Study 2023
8 2023 KIND Magazine’s (“KIND”) awards

2023 Highlights:

For the twelve months ended December 31, 2023

  • Net revenue of $40.1 million (13% increase from 2022)
  • Gross profit before fair value adjustments of $14.1 million (15% increase from 2022)
  • Achieved Adjusted EBITDA1 profitability of $4.4 million with Q4 2023 marking the seventh consecutive quarter of Adjusted EBITDA1 profitability
  • Growth in cash balance by $1.5 million from December 31, 2022 from $8.3 million to $9.8 million while reducing accounts payable and accrued liabilities by $1m
  • Achieved $5.0 million operating cashflow. Q4 2023 marking the sixth consecutive quarter of operating cashflow positive
  • Simply Bare Organic and 1964 Supply Co. identified as 2 of top 3 brands recommended by Canadian budtenders7.
  • 1964 Supply Co. voted #1 brand sampled at KIND Summer Fair.
  • Rubicon Organics won “Cannabis Company of the Year” and “People’s Choice for Best Weed” awards8
  • 2.1%9 national market share of flower and pre-rolls
  • 6.9%3 national market share of premium flower and pre-rolls
  • 21.8%4 national market share of topical products
  • 15.2%10 national market share of premium concentrates
  • 4.3%11 national market share of premium edibles following initial launch of 1964 Supply Co edibles in Q2 2023 and Wildflower launch in Q4 2023.

9 Hifyre data for flower & pre-rolled products covering twelve months ending December 31, 2023
10 Hifyre data for premium concentrates products covering twelve months ending December 31, 2023
11 Hifyre data for premium edible products covering twelve months ending December 31, 2023

2023 and Subsequent Sales & Operational Highlights:

  • Rubicon Organics has established high-quality partnerships for contract grow and co-manufacturing to complement our own premium production and to satisfy the increasing demand for our brands.
  • The Company launched its first entry into the edibles category, through a co-manufacturing relationship, with 1964 Supply Co live rosin edibles in Ontario, BC and Alberta. These edibles were the first single-strain live rosin edibles in Canada and are vegan and gluten-free. Following up on the success of the initial two flavour launch in the second quarter, 1964 Supply Co has since rolled out five additional flavours.
  • Wildflower™ launched its first edibles in October 2023. These edible products consist of four flavours and contain the minor cannabinoids CBN, CBG and CBD as well as full spectrum THC live rosin, and are vegan and gluten-free.
  • Simply Bare Organic launched infused pre-rolls under the Simply Bare Organic brand, including the “Layer J” in BC and Ontario in October 2023. It contains two layers, one with flower and hash of one cultivar, and the other with flower and hash rosin of another cultivar. The two cultivars are BC Organic Cleopatra and BC Organic White Rainbow.
  • Simply Bare Organic launched a new 2-gram hash, “New School Hash” available in BC, Ontario, Alberta and Quebec.
  • With the continuing growth of the infused pre-roll category, 1964 Supply Co™ launched the 1 x 1-gram Comatose rosin roll that features a mix of flavourful Comatose flower and potent Comatose hash rosin. Comatose was the 1964 Supply Co “hero strain” and was voted indica of the year by Kind Magazine in December 2022.
  • In September 2023, the Company’s brand 1964 Supply Co™ launched an infused pre-roll, the Super Lemon Haze “Heavy Hitter” rosin roll which is a 1 x 1 gram infused pre-rolls featuring Super Lemon Haze flower, and potent Super Lemon Haze hash rosin.
  • Wildflower™ is leveraging its leading market share by launching new products to address consumer needs in the wellness space. The new products launched consist of Wildflower™ Extra Strength Relief Stick and Wildflower™ 1:1 CBD:THC Relief Stick.
  • Brightfield released its own survey of Canadian Budtenders and in those results, Simply Bare Organic and 1964 Supply Co were identified as two of the top three most recommended brands by Canadian budtenders8.
  • 1964 Supply Co was voted as the #1 brand sampled at the KIND Summer Fair by budtenders. Of the budtenders surveyed, 96% are more likely to recommend a brand they sampled at the KIND Summer Fair.
  • The Company added 5 new independent directors to its Board of Directors following its Annual General Meeting.
  • The Company appointed Margaret Brodie as permanent Chief Executive Officer and Janis Risbin as Chief Financial Officer.

2024 Outlook

Brand and Product Development
Our strategy is founded on a strong premium branded portfolio, highly regarded by both budtenders and consumers alike. Guided by consumer research, we continually innovate our products to anticipate market trends. Our commitment to quality and excellence is evident throughout all areas of our business, seeking to deliver products and services that consistently meet the highest quality standards.

Launch into Vape Category
Rubicon is launching into the vape category with our 1964 Supply Co brand. The introduction of vapes strategically aligns with our market expansion strategy and offers substantial growth prospects. The vape market has demonstrated robust growth over recent years and trends in Canada and the US demonstrate indicating the vape category’s increasing prominence, rivaling or surpassing traditional flower products.

Our launch into the vape category takes advantage of additional biomass available from our contract grow strategy launched in 2023 of our own genetics grown outside of the Delta Facility. We have successfully listed our leading Comatose and Blue Dream Full Spectrum Extract (“FSE”) resin vapes in Ontario and the product is expected to be first available in May seeking to launch in other provinces soon after. In line with our approach to the live rosin edibles we launched under the brand in 2023, we are focused on delivering products that maintain a competitive edge through superior quality, right price to value ratio leveraging our established and reputable brands. We are confident that by capitalizing on this opportunity, over time we can achieve comparable financial success with our vape offerings as we have with our flower business.

Wildflower’s Leadership in Cannabis Wellness
Wildflower‘s prominence in the cannabis wellness sector is characterized by its notable dominance in topical products and the Company has recently expanded the brand to other categories, including edibles and capsules designed to address specific wellness needs such as sleep, pain relief, and anxiety reduction. While we expect more competition to enter the topical and wellness category, we are expanding the brand into other categories and anticipate steady growth and momentum behind the daily wellness consumer.

Launch of New Genetics
Rubicon plans to continue to launch new and novel genetics into its Simply Bare Organic and 1964 Supply Co to continue leadership in the premium cannabis market. Planned launches in 2024 include BC Organic Zookies, BC Organic Power Mintz, and BC Organic Fruit Loopz under the Simply Bare Organic brand, and Blue Dream under the 1964 Supply Co brand.

Growth from Solid Business Fundamentals
Consistent quality and systematic delivery to our customers, including the provincial distributors and retailers, and consumers to meet their needs is imperative to be successful in the Canadian cannabis industry. In 2024 we are investing in an Enterprise Resource Planning (“ERP”) system which is necessary for our business to deliver more growth in future and allow less reliance on key people within our internal systems. Predominantly in the first half of 2024 we will incur additional costs associated with this project, and while a resource intensive process, this ERP implementation readies our business for growth in future.