Aleafia Health (TSX: ALEF) reported its third quarter financial results this morning, posting net revenues of $4.95 million, an increase of 29.1% on a quarter over quarter basis. Total cannabis sales amounted to $4.15 million before excise taxes were deducted.
It should be noted that within its press release, Aleafia identified top line revenue gross of excise taxes, thus the discrepancy in reported figures. Most peers in the sector report net revenues for consistency.
Aleafia reported a gross profit before fair value adjustments of $2.03 million for the quarter. However, thanks in part to its outdoor cannabis cultivation, a $10.36 million bump was given to gross profit from the unrealized gain on fair value of biological assets. Thanks to this bump, the firm was able to report a net income of $1.85 million for the quarter.
Expenses during the quarter saw a significant decrease, from $12.06 million to $8.45 million. This is primarily as a result of share based payments, which declined from $4.21 million to $0.41 million in the current quarter. Wages and benefits came in at $2.48 million, up from $1.02 million in the previous quarter, while general and administrative expenses rose to $2.32 million from $1.72 million.
Operating activities during the quarter amounted to $7.92 million, resulting in a cash flow negative operation despite a posted net income. Aleafia’s total cash position decreased from $57.97 million to $51.58 million during the quarter. Accounts receivable continued to climb during the third quarter, from $6.28 million to $8.46 million. Outstanding receivables currently account for 170.82% of current quarter net revenues, suggesting that the firm is having significant issues collecting funds owed. Inventory also rose during the quarter from $4.25 million to $7.81 million.
Accounts payable rose during the quarter from $6.71 million to $10.24 million.
Aleafia identified within its news release that its average net selling price for medical cannabis was $15.11 per gram, $6.40 for adult-use product, and $6.00 for wholesale product. The firm has not previously provided this breakdown within its filings. Within the interim financials, Aleafia identified an “average transfer price per gram” for estimating purposes of $4.50 for indoor product and $1.25 for outdoor product. Within the previous quarter the firm identified that the average selling price per gram within its estimates is $3.40.
Aleafia Health closed yesterdays session at $0.92 on the TSX. Today’s financial release follows yesterdays announcement of outdoor harvest yields for the firm.
Information for this briefing was found via Sedar and Aleafia Health. The author has no 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.