WeedMD Reports Second Quarter Revenue of $7.97 Million, Positive Net Income
WeedMD Inc (TSXV: WMD) reported revenues after the bell this evening, recording net revenues of $7.97 million for the period ended June 30, 2019, meeting preliminary revenue guidance provided by the company on August 7. Revenues also beat analyst estimates, with Haywood previously anticipating $5.7 million in earnings for the second quarter.
Total gross margin for the quarter came in at 45.90%, with the firm posting a gross margin of $3,663,089 before changes in fair value. With the adjustment, gross profit over the quarter grows to $19.19 million. Revenues grew by 139.21% on a quarter over quarter basis, while gross margin comparatively improved by 31.24%. WeedMD had posted net revenues of $3.33 million in the first quarter, with a gross margin of 14.66%. Keith Merker, CEO of WeedMD had indicated on the conference call that this previously low margin was largely a function of scaling production at its Strathroy, Ontario facility.
Total expenses amounted to $6.21 million over the quarter, with the largest portion, $4.39 million, being attributable to general and administrative expenses. Share based compensation came in at $1.32 million over the quarter, a decrease from the $2.03 million seen in the first quarter of fiscal 2019.
WeedMD posted a net income of $12.62 million for the quarter, or $0.11 per share. The six month period came in slightly lower, at $10.22 million, or $0.09 per share.
“This quarter was indicative of WeedMD’s long-standing drive for execution and quality. Consistent product, efficient operations and capital discipline remain our core focus. We are delivering on our commitments to build an industry-leading cannabis production platform with our low-cost outdoor cultivation platform. Additionally, with the licensing of 10 more precision cultivation rooms that are now being planted at our Strathroy facility, and through the introduction of CX Industries, we continue on our path to become Canada’s best source for premium cannabis flower, oils and extracts at scale.”Keith Merker, CEO of WeedMD
On a per gram basis, the average sale price came in at $3.76, versus $3.82 in the previous quarter. The decrease is primarily attributable to business-to-business sales of cannabis to other licensed producers, of which the majority was extract grade product. The segments of provincial and direct to patient sales saw increases of $0.79 per gram and $0.20 per gram respectively.
Comparatively, the average cost of production on a per gram basis came in at $1.84, down $1.06 per gram.
WeedMD closed today’s session at $1.59, up 1.27% on the day.
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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.