Decibel Reports Strong YoY Revenue Growth In Q3, Plans To Launch 40 New Product SKUs

Decibel Cannabis Company Inc. DB DBCCF posted its third-quarter financial results Thursday, revealing a 76% year-over-year increase in net revenue, which totaled $13.4 million.

The Calgary-based company ended the quarter as the 9th largest LP by Canadian recreational market share, with 3.1% in September, while maintaining strong market share across British Columbia, Alberta, Ontario and Saskatchewan.

"Decibel's continued growth is a testament to our consumer-focused approach, the strength of our brands, and our dedication towards producing high-quality products for our customers," Paul Wilson, CEO of Decibel said. "We are closing out 2021 with strong momentum as we launch 40 new products, elevate the experience our products create for consumers and innovate to meet cannabis consumers' evolving preferences."

Q2 2021 Financial Highlights

• Net revenue increased 7% quarter-over-quarter.
• 492 kilograms of cannabis flower sold with an average wholesale net price per gram of $7.65, an increase of 10% in kilograms sold, and a decrease of 4% in average wholesale net price per gram, over the prior quarter.
• Net sales of vape and concentrate products amounted to $6.6 million, representing a 16% increase from the prior period.
• Retail sales totaled $3million, down by 5% over the prior quarter.
• The gross margin was 31%, compared to 38% in the corresponding period of 2020.
• Achieved $4.1 million of gross profit before fair value adjustments, a decline of 20% from Q2 2021 and an improvement of 42% over the prior year.
• Achieved $1.8 million of adjusted EBITDA, its fifth consecutive quarter of positive adjusted EBITDA, representing a decline of 17% from the prior quarter and an improvement of 107% from the prior year.
• For the trailing twelve months, the company achieved $7.1 million in adjusted EBITDA.
• Net cash on the balance sheet as of September 30, 2021, was $11.3 million.

Q2 2021 Operational Highlights

• Continues to invest in working capital as it ramps its Thunderchild facility and achieved run-rate harvests in the mid-third quarter.
• The company anticipates run-rate production by mid-fourth quarter, at which point the focus will be directed towards operational efficiency in post-processing.
• Introduced another six new product SKUs in addition to its rotational cultivar-based products, ending with 57 products in the market, generating roughly $182 thousand in net revenue per SKU during the period.

In addition, Decibel announced the launch of 40 new product SKUs between September 2021 and January 2022, including 12 new flower & pre-roll products and 28 incremental new flower and derivative products.

Management Team Shake-Ups

Decibel said that Dr. Ivan Casselman was re-appointed to the corporation's board of directors on Wednesday, November 17.

Casselman has vast product and industry knowledge through his industry experience as an analytical chemist and plant medicine researcher. He currently serves as the chief psychedelic officer at Havn.

"Dr. Casselman brings an extensive amount of experience and knowledge within the sector and adds a level of product and industry knowledge that will naturally compliment Decibel's current board of directors," Cody Church, chairman of Decibel's board of directors said.

More recent news from Decibel:

• Decibel Cannabis Debuts Its First Series Of Infused Pre-Rolls Under General Admission Brand
• Decibel Cannabis Co. Raises $15M Via Bought Deal Unit Offering With Eight Capital, Haywood Securities And Raymond James
• Decibel Cannabis Company To Raise $10M Via Bought Deal Unit Offering With Eight Capital, Haywood Securities And Raymond James
• Decibel Cannabis Company Reports Record Adjusted EBITDA Of $2.1M In The Second Quarter

DBCCF Price Action

Decibel's shares traded 3.86% lower at $0.1807 per share at the market close on Wednesday.

Photo: Courtesy of Decibel Cannabis Company Inc