IM Cannabis Soars: German Sales Surge 200% In First 3 Months Post-Legalization, Q2 Revenue Up 12% YoY

IM Cannabis Corp. IMCC IMCC, an international medical cannabis company, announced its financial results on Wednesday for the second quarter ended June 30, 2024, revealing a 12% year-over-year increase in revenue to CA$14.8 million ($10.8 million) in the second quarter of 2023.

The company also reported a 129% year-over-year increase in IMC German sales to CA$3.5 million, making up 24% of the entire company revenue.

Oren Shuster, CEO of IMC, said cannabis policy reform in Germany has significantly impacted the company's business. As of this past April, adults over 18 in Germany can legally possess up to 25 grams of dried cannabis and cultivate up to three marijuana plants at home.

"We were well positioned to take advantage of the growing market and delivered a 200% increase in sales in Q2,” Shuster said in a press release. “We are actively making sure that we are allotting the resources and support the German business needs to deliver further accelerated growth.”

As of this July, adults can also join not-for-profit social clubs where they can buy up to 25 grams of cannabis, with a cap of 50 grams per month. That cap is 30 grams for members under 21 years old.

Read Also: IM Cannabis Doubles Down On Germany Following Legalization Policy Change, Reports YoY Drop In Q1 Gross Profit And Revenue

Q2 2024 Financial Highlights

• Total dried flower sold in the second quarter was roughly 2,333 kg with an average selling price of CA$6.09 per gram, compared to approximately 2,128kg in the second quarter of 2023, with an average selling price of $5.04 per gram, which is an increase of 21%.
• Cost of revenues were CA$13.9 million compared to CA$9.5 million in the prior year's quarter, representing an increase of CA$4.4 million or 46.6%.
• Gross profit was CA$0.8 million, compared to CA$3.5 million in the prior year's period, representing a decrease of 75.6%.
• Total operating expenses amounted to CA$3.7 million compared to CA$5.2 million in the prior year's quarter, a decrease of CA$1.5 million or 29% mainly due to a decrease in salaries of roughly CA$0.4 million, insurance of CA$0.2 million, depreciation expenses of CA$0.3 million and professional services of CA$0.2 million.
• Net loss was CA$3.5 million, down from CA$3.7 million in the prior year's period.
• Non-IFRS adjusted EBITDA loss was CA$2.3 million, compared to an adjusted EBITDA loss of CA$0.5 million in the second quarter, representing a loss increase of 357%.
• Cash and cash equivalents as of June 30, 2024, were CA$0.7 million compared to CA$1.8 million on Dec. 31, 2023.
• Total assets as of June 30, 2024, were CA$40.2 million, compared to CA$48.8 million on Dec. 31, 2023, a decrease of CA$8.6 million or 17.6%.
• Total Liabilities as of June 30, 2024, were CA$34.7 million, compared to CA$35.1 million on Dec. 31, 2023, representing a decrease of CA$0.4 million or 1.1%.

Share Consolidation Plan

The company announced a major share consolidation plan last month. Its board of directors approved a consolidation of its issued and outstanding common shares under which every six pre-consolidated common shares will convert into one post-consolidated share. The strategic decision reduced its outstanding shares from 13,394,136 to 2,232,357, making the stock more attractive to institutional investors and improving liquidity.

IMCC Price Action

IM Cannabis' shares traded 7.14% higher at $3 per share during the pre-market session on Wednesday morning.

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