Potential Cannabis Unicorn "InterCure" Realizes the 7th Consecutive Quarter of Revenue Growth

Former prime minister of Israel and InterCure chairman Ehud Barak at the company’s market open from their cultivation site in Israel

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Nearly 4 years after the cannabis boom, most operators are still struggling to report profits.

Cronos Group Inc. CRON, for example, recently reported a gross loss of $15.8 million in Q2 in 2021, and Canopy Growth Corp. CGC followed suit by announcing a $16.3 million loss at around the same time. Even Tilray Inc.’s TLRY $123 million profit in the period ending May 31 cannot be seen as proof of success because the profit came from the sale of convertible debentures instead of operating activity.

Juxtaposing InterCure Ltd.’s INCR INCR INCR financial performance with its North American counterparts paints it as a sort of mythological creature — a cannabis unicorn. In a recent earnings report, the Israel-based company posted its 7th consecutive quarter of high double-digit revenue growth and has an annualized revenue run rate of $100 million for the rest of 2021.

InterCure’s local distribution network, international partnerships and vertically integrated growth strategy have set it apart from its competitors around the globe. The market capitalization of Israel’s  Evogene Ltd. EVGN, Canada’s Lexaria Bioscience Corp. LXX and India Globalization Capital Inc. IGC all fall short of InterCure’s own.

At its height, InterCure’s stock price reached 100% growth since its initial public offering. More recently, the stock has been on a 4-month upward trend since mid July and is currently hovering in the $7 to $9 range.

The InterCure Story so Far

InterCure’s primary growth methods have occurred through strategic acquisitions and partnership developments. The company’s news releases provide an organized timeline for these events.

In May, for example, InterCure acquired one of Israel’s leading active medical cannabis trade houses. This acquisition added 2 strategically located pharmacies to InterCure’s pharmaceutical chain, giving it a new total of 12 pharmacies and points of sales across the nation.

In November, just 6 months later, InterCure announced the addition of 4 pharmacies to its leading pharmacy chain GIVOL. With a new retail footprint in 20 locations, the company has further expanded its focus on dispensing Good Manufacturing Practice Certified (GMP) pharmaceutical-grade medical cannabis across the country.

Working in tangent with these acquisitions are strategic partnerships with companies like United Parcel Service Inc. UPS and SLE of TEVA TEVA that have allowed InterCure to develop a home-delivery service. Its wholly-owned subsidiary Canndoc is Israel’s largest licensed cannabis producer and one of the first to offer good manufacturing practices GMP-certified medical-grade cannabis in the country. 

Recent Catalysts

A review of InterCure’s November press releases shows that its acquisition and partnership strategies have been largely successful.

In one of the press releases, the company announced that it reached a record 1 ton of GMP-certified standard medical cannabis products dispensed in 1 month. This represents approximately 30% market share of Israel’s entire medical cannabis market.

On another press release, InterCure boasts yet another strong earnings report. Aside from the 7th consecutive quarter of revenue growth, the company also reported 3 times year-on-year revenue growth, 36% quarter-on-quarter growth and earnings before interest tax and amortization (EBITDA) of $6 million in the 3rd quarter. InterCure claims $85 million in cash and an annual run rate of $100 million driven by revenue growth — a true rarity in the cannabis sector.

Perhaps most notably, InterCure CEO Alexander Rabinovitch purchased 420,000 shares on the open market, a transaction valued at $3.7 million.

“We expect growth to continue in the 4th quarter and through 2022 as we will continue focusing on executing our profitable growth strategy building long- and short-term shareholder value,” Rabinovitch said.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.