Lowell Farms Reports 35% Revenue Drop In Q1: Following Cannabis Cultivation Exit, Net Loss Down 27.5%

California-based cannabis company Lowell Farms Inc. LOWLF

released its financial and operational results on Tuesday afternoon for the first quarter of 2024, ending March 31.

The company reported a 35% decrease in net revenue, which fell to $4.9 million from $7.5 million in the same quarter last year. However, net revenue showed a 35% increase from $3.6 million in Q4 2023.

Consumer packaged goods (CPG) revenue dipped 11% year-over-year but rose 10% from the previous quarter. Bulk product revenue dropped 73% year-over-year and 66% from Q4 2023. Revenue from Lowell Farm Services (LFS) decreased 41% year-over-year and 93% from the previous quarter.

Mark Ainsworth, co-founder and CEO, remarked, "Our recent strategic decisions have bolstered our manufacturing and distribution capabilities, allowing us to navigate the industry landscape. By optimizing efficiencies, we’re poised for steady growth and positive impact."

Financial Losses Improve Despite Gross Margin Challenges

• Lowell Farms reported a gross loss of $0.8 million for the quarter, translating to a negative gross margin of 17%, primarily due to the company's exit from its cultivation facility. This means the company faced significant financial challenges as it transitioned away from cultivation, impacting its overall profitability. 
• The operating loss for Q1 2024 was $2.9 million, compared to $2.4 million in Q1 2023 and $9.6 million in Q4 2023.
• The net loss for the quarter was $2.9 million, an improvement from the $4.0 million net loss in the same quarter last year (27.5% YoY) and better than the $13.1 million net loss in Q4 2023 (77.9% QoQ).
• Adjusted EBITDA stood at negative $1.1 million, consistent with the same quarter last year but an improvement from negative $4.1 million in the previous quarter.

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