IM Cannabis' Q4 Revenue: Gross Profit Drops Due To Negative Impact Of Israel-Hamas War, Sees Germany As Growth Opportunity

IM Cannabis Corp. IMCC IMCC announced its financial and operational results on Thursday for the year ended Dec. 2023.

The Toronto-headquartered medical cannabis company with a focus on Israel and Germany reported a 10% year-over-year decrease in revenue to CA$48.8 million ($36 million) in 2023. IM Cannabis attributed it to "negative currency fluctuations and the impact of the Israel-Hamas war on the company’s operations." Fourth quarter revenue dropped 26% year-over-year to CA$10.7 million.

“As previously warned and as expected, unfortunately, the Israel-Hamas war had a negative impact on our fourth quarter 2023 results, which weighed on our full-year results.," said Uri Birenberg, chief financial officer of IMC. "Coupled with our fourth quarter of 2023 inventory reduction, the war caused our fourth quarter gross profit to decrease by 68% as compared to the fourth quarter of 2022."

Meanwhile, with Germany's new cannabis law taking effect on Monday, April 1, the company "hopes to continue its growth in the market as the market evolves,” CEO Oren Shuster said.

In Germany, the third country in Europe to legalize adult-use marijuana after Malta and Luxembourg, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients.

Germany legalizing recreational cannabis and other hot topics will be discussed at the April 16-17 Benzinga Cannabis Capital Conference, especially given how marijuana stocks shot up in response.

FY 2023 Financial Highlights

• Gross profit increased to CA$9.8 million, compared to CA$9.2 million in 2022, representing a year-over-year increase of 7.5%.
• General and administrative expenses decreased to CA$11 million, compared to CA$21.5 million in 2022, representing a decrease of 49% year-over-year.
• Selling and marketing expenses decreased to CA$10.8 million, compared to CA$11.5 million in 2022, representing a decrease of 6% year-over-year.
• Net loss from continuing operations was CA$10.2 million, as compared to CA$24.9 million in 2022.

• Operating expenses decreased to CA$22.6 million, compared to CA$40 million in 2022, representing a decrease of 43% year-over-year.
• Adjusted EBITDA decreased to CA$8 million, compared to CA$11.5 in 2022, representing a decrease of 30% year-over-year.
• Cash and cash equivalents as of Dec. 31, 2023, was CA$1.8 million, compared to CA$2.4 million as of Dec. 31, 2022.
• Total assets were CA$48.8 million as of Dec. 31, 2023, compared to CA$60.7 million as of December 31, 2022, representing a decrease of 20% year-over-year.
• Total liabilities were CA$35.1 million as of Dec. 31, 2023, compared to CA$36.9 as of Dec. 31, 2022, representing a decrease of about 5% year-over-year.

Q4 2023 Financial Highlights

• Gross profit decreased to CA$0.8 million, compared to CA$2.6 million in the same period of 2022, representing a decrease of 68% year-over-year. That's primarily due to the interruption in the company’s supply chain caused by the Israel-Hamas war and the Company discounting certain outstanding inventory at lower prices.
• General and administrative expenses decreased to CA$3.3 million compared to CA$9.8 million in 2022, representing a decrease of 66% year-over-year.
• Selling and marketing expenses decreased to CA$2.8 million, compared to CA$3.1 million in 2022, representing a decrease of 10% year-over-year.
• Net loss from continuing operations was CA$3.5 million, as compared to a net loss of CA$9.6 million in the fourth quarter of 2022.
• Operating expenses decreased to CA$6 million, compared to CA$13.3 million in 2022, representing a decrease of 55% year-over-year.

IMCC Price Action

IM Cannabis' shares traded 7.33% higher at $0.4509 per share at the time of writing on Thursday morning.

The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.

Get your tickets now on bzcannabis.com – Prices will increase very soon!