48North Cannabis Corp (TSXV: NRTH) released its financials late yesterday over the Victoria Day holiday weekend in Canada. While filings are not yet available via Sedar, some details were provided on the companys earnings via a late afternoon news release.
Quarterly revenues faced a stark decline on a quarter over quarter basis, falling to just $689,000 for the third quarter, compared to $2.39mm in revenues that were posted in the second quarter of the fiscal year. Rather than highlight its quarterly revenues, 48North elected to center on the fact that it has remained EBITDA positive on an adjusted basis for the third quarter in a row, posting $78,000 in earnings.
The significant decline in revenues is justified by the previous uncertainty associated with the firms outdoor cultivation license application, which was granted by Health Canada on Friday.
48North’s outdoor cultivation property, a 100 acre plot located in Brant County, Ontario, is expected to grow 40,000 kg of cannabis annually. The firm currently has a standing order in place with the SQDC for the purchase of 1,200 kg of this production.
“To successfully deliver on the Company’s commitment to have next-generation products ready for retail sale by fall 2019, and with previous uncertainty with respect to the licensing of the outdoor farm, on a precautionary basis, 48North strategically withheld a significant percentage of its indoor-grown cannabis for next-generation cannabis products. This reserve product will now be sold as dried flower,”
Alison Gordon, co-CEO of 48North
As a direct result of withholding a large percentage of its indoor grown cannabis, 48North’s inventory ballooned from $928,000 in Q2, to $2.48mm in Q3. Based on the inventory build up between Q2 and Q3, its evident that 48North is still holding onto inventory that was harvested more than three months ago – whether this is directly related to reserving product for future processing, or a demand issue is yet to be seen, but will likely be evident within fourth quarter financial reports.
48North will be holding a conference call related to its earnings this morning at 8:30 AM. Further details of which can be found here.
Information for this briefing was found via Sedar and 48North Cannabis Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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