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Record sales and first profit for The Good Shroom in Q3

(CNW) Montreal — The Good Shroom Co Inc., which owns and operates a portfolio of brands that include traditional cannabis products as well as mushroom-based wellness beverages, announces its first profit since the commencement of operations and reports on its financial results for the quarter ended April 30, 2023.

Q3 – Financial Highlights 

• First Profit: Net Profit of $13,660 for Q3-2023.
• 3X increase in Sales:  $1,266,186, compared to $419,397 for Q3-2022; 1.4X increase in sales from previous quarter (Q2-2023), $670,276.
• Debt: Long-term debt of $40,000.

“We are pleased with today’s results; brand recognition is increasing sales, bolstering loyalty and we are seeing gains in terms of operational efficiency. We also expect to begin realizing economies of scale into the near future.  As we execute on our asset light business model and leverage our network of manufacturing partners, we are moving forward with limited capital assets all the while having the flexibility to rapidly scale up and meet growing sales and consumer preferences as most of our resources have been geared towards our cannabis division, with good results, sales for wellness beverages (of $29,775 for Q3), remain flat. However, we see growth opportunities for this division as well and we intend on allocating additional resources, to implement a new marketing strategy before calendar year-end.” — Eric Ronsse, CEO, The Good Shroom

Q3 – Business Highlights 

• New Products:
  • Habibi Kush (hash) launched in ~25% of Quebec cannabis stores
• Transition from ~25% of Quebec cannabis stores to all stores
  • Le Kush X (hash), Sky Cuddler Kush (dried flower) and Cherry Blossom (dried flower) transitioned in Q3.
• New Markets:
  • The Company breaks into the edibles category with THC infused Beef Jerky named OG Jerk, which launched in all Quebec cannabis stores in February of this year, remaining within the top three selling products of its category in terms of weekly units sold (quebec.weedcrawler.ca/best_sellers).
  • Approval of CBD capsules in Ontario for August 2023 launch.
• Top Products: Afghan Gold Infused Joint is consistently within the top three products in its category in terms of weekly units sold. Afghan Gold hash remains in the top ten
• 100% Ocean reclaimed plastic is used for some of the Company’s packaging and it expects to continue increasing its use.

Events Subsequent to Quarter 

• Three new edible cannabis products are expected to launch late summer/early fall in the province of Quebec: crunchy coated peanuts, dried ramen noodle mix and saucissons (cured charcuterie).
• Approval from the Alberta Liquor and Gaming Commission to become a vendor in the province with several products expected to be available during the fall of 2023.
• Approval of CBD capsules in Ontario for August launch.

Currently, the government of Quebec limits the choices of edibles to ensure that they don’t appeal to children, such as cookies and candies. Consequently, there are few high performing edibles at this time, but management also sees this as an opportunity and expects that the only THC infused beef jerky in Quebec, a commonly consumed savory snack, will continue to appeal to many consumers, as will it’s new edible products expected to be available this summer/early fall.

Moreover, the current legal and tax landscape has been increasingly putting pressure on the cannabis industry which has seen low investor returns and several small and large players ceasing operations or undertaking important restructurings in the last 12 months. The current restrictions, in terms of marketing and product offering, as well as tax obligations, have led to shrinking margins and are making it harder to compete with the illicit market.

Management expects positive steps will be taken to modernize the legal framework for the benefit of businesses, consumers and the industry following the ongoing legislative review of the Cannabis Act by the Federal Government, and that some of the recommendations made by the Competition Bureau in May of this year, will be reflected, namely reducing marketing restrictions and allowing for more flexibility for THC limits in edibles.