Sunday, July 27, 2025

Zenabis Posts Second Quarter Earnings, Increases Design Capacity

Zenabis Global (TSX: ZENA) reported its second quarter results this morning, revealing it had generated revenues of $25.04 million on a net basis. The firm posted a net loss of $18.49 million over the quarter.

While the revenues generated represent a 115% quarter over quarter increase,the firms net loss saw an increase of 324%. While significant, and posing a problem for future profitability, the truly impressive figures lie in the operational excellence that Zenabis had begun to see over the quarter. The firm has continued to smash through design capacity estimates, posing a 35% increase in production over initial estimates. As a result, estimated annual capacity at its Atholville facility has increased to 46,300 KG from 34,300 KG. Meanwhile, expected cultivation costs at its Langley facility decreased to an impressive $0.50 per gram.

“Our strength on the cultivation front has given us the confidence to raise our cultivation capacity estimate for Zenabis Atholville by 12,000 kg per annum, from 34,300 kg to 46,300 kg of dried cannabis. We expect our performance ratio in July to exceed 10% of our amended Zenabis Atholville design capacity (more than 40% over original design capacity) based on preliminary results.”

Andrew Grieve, Chief Executive Officer of Zenabis

Notably, Zenabis was also one of the first firms to address the state of the wholesale cannabis market in Canada. The firm expects current wholesale rates across the sector to continue to fall as more production comes online. However, they feel they are well positioned based on their low cost of production, currently at $0.78 per gram at its Atholville facility. The firm reported an average per gram sale price of $4.22 over the period, which includes cannabis trim. Average sale price per gram of dried flower, oil, or pre-roll came in at $4.97.

The firm has identified that the declining price on a per gram basis is a result of focusing on obtaining a larger market share of the recreational market.

While operationally the firm has exceeded many expectations, the elephant in the room remains to be Zenabis’ current financial position. While the firm has secured $40 million in non-dilutive financing subsequent to quarter end, the terms of the financing, which came via supply agreements, are still murky. The firm also still has over $90.08 million in current liabilities, which includes a convertible note for $28.06 million, a loan facility for $23.96 million, and accounts payable of $36.92 million. This compares with cash of $8.67 as of June 30, accounts receivable of $18.05 million, as well as inventory of $17.94 million, on total current assets of $60.23 million.

Total expenses for the quarter came in at $18.92 million, of which the biggest portion was attributable to salaries and benefits at $6.07 million. Professional fees was the second largest expense, at $3.7 million, with general and administrative coming in at $2.92. This compares with a net profit before fair value adjustments of $8.38 million, suggesting Zenabis has a long way to go before its operations are profitable.

Lastly, while the producer is not mentioned, Zenabis indicated that it had terminated a supply agreement with a licensed producer who was providing subpar product. Zenabis had received a shipment of 554 KG of product which it ultimately returned due to not meeting quality standards. It was not clear who this supplier was, and previous news releases provided little color on the topic.


Information for this briefing was found via Sedar and Zenabis Global. 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.

Video Articles

Tariffs Spark New Race for Critical Metals | Rob McEwen

Antimony Resources: The Bald Hill Project

They Laughed at $3,000 Gold, Now We’re Headed for $4,000! | Sean Roosen – Osisko Development Corp.

Recommended

Steadright Begins Preliminary Economic Assessment On TitanBeach Project

Three Miners Trapped Underground At Newmont’s Red Chris Mine

Related News

Zenabis Reports Q4 Revenues Of $15.9 Million, Net Loss Of $30.1 Million

Zenabis Global (TSX: ZENA) last night quietly filed its fourth quarter and full year 2020...

Thursday, April 1, 2021, 07:11:14 AM

Zenabis Fails EU-GMP Certification at Delta Facility

Zenabis Global (TSX: ZENA) failed a facility inspection at its Delta, BC location for EU-GMP...

Thursday, December 5, 2019, 11:39:58 AM

Zenabis Posts Revenues of $27.4 Million, Loss of $15.8 Million For Q2 2020

Zenabis Global (TSX: ZENA) reported their second quarter 2020 financials results this morning, with mixed...

Friday, August 14, 2020, 09:09:30 AM

Zenabis Manages To Push Off Portion of June 2020 Debt Maturity

Zenabis Global (TSX: ZENA) may have pushed off insolvency a little longer this morning. The...

Thursday, April 23, 2020, 08:47:04 AM

Was Zenabis’ Rights Offering a Poison Pill?

Earlier this week Zenabis Global (TSX: ZENA) alerted the market that they would be conducting...

Sunday, October 27, 2019, 08:00:18 AM