November 21, 2023 By Grow Opportunity Staff
(Globe Newswire) Vancouver — LEEF Brands, Inc., a premier vertical cannabis operator, announced its financial results for the three and nine months ended September 30, 2023. Unless otherwise noted, all currency references are in United States dollars.
— Net sales of $5.7M for the three months ended September 30, 2023 and $24.6M for the nine months ended September 30, 2023, represents a year over year increase of 10 per cent.
— Gross Profit of $1.9M for the three months ended September 30, 2023 and $8.2M for the nine months ended September 30, 2023, represents a year over year increase of 6 per cent.
— Gross Margin of 32.8 per cent for the three months ended September 30, 2023 and 33.5 per cent for the nine months ended September 30, 2023.
— Adjusted EBITDA of $224.5K for the three months ended September 30, 2023 and $1.2M for the nine months ended September 30, 2023.
“Our year-over-year growth highlights our resilience and adaptability in the ever-evolving cannabis market. A key part of our strategy is the development of the Salisbury Canyon Ranch, our large-scale cultivation site in Santa Barbara County. This new site is not just an expansion; it’s a leap forward in our ability to meet growing demand. With the ground-breaking already underway, including well installations and land preparations, we’re gearing up for what we anticipate being a substantial harvest next fall. The completion of this farm in 2024 will be the catalyst that improves our biomass supply chain for the concentrate lines LEEF specializes in. This will allow for us to bring predictability, consistency, and higher margins which will position us well in late 2024 and beyond.” — Micah Anderson, CEO, LEEF
“The financial results for this quarter, particularly the 10 per cent year-over-year increase in net sales, underscore our financial strength and the effectiveness of our business strategy. While we faced some revenue challenges in the third quarter, our continued focus on high-quality concentrates, customer service, along with strategic right-sizing has resulted in improved gross margins in the third quarter compared to the same period last year. In addition, the Company has decreased operating expenses significantly year over year. These financial indicators are promising, reflecting our commitment to operational efficiency and our pursuit of sustainable growth in the dynamic cannabis market.” — Kevin Wilson, CFO, LEEF
Q3 2023 financial results discussion:
Investors are invited to access the financial results and analyses on the company’s investor relations website.
Subsequent events to the three months ended September 30, 2023:
The company has announced the issuance of 18,966,667 common shares at an average price of $0.03 CAD per share as well as warrants to purchase 9,483,333 with a strike price of $0.05 CAD, exercisable for two years, to settle $569,000 CAD of payables to a service provider.
Unaudited Q3 2023 financial and operation metrics:
For the three and nine months ended September 30, 2022, the company recognized a non-cash gain for the extinguishment of debt in the amount of $8,155,893 which resulted in Adjusted EBITDA of $6,316,732. Removing this amount, the Adjusted EBITDA would be a loss of ($1,839,161) and ($1,914,259) for the three and nine months respectively. For the nine months ended September 30, 2023, the company recognized a non-cash impairment of $17,409,624 which resulted in a large net loss of ($23,767,032). With this considered, the company has seen a year over year increase in Adjusted EBITDA of $2.0M and $3.2M for the three and nine months ended September 30, 2023.
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