Florida Cannabis Operator Cansortium Posts 12% Revenue Surge, Prepares For Big Merger Amid Heated Price War

Cansortium Inc.TIUM CNTMF, operating under the FLUENT brand, reported Thursday its financial results for the second quarter ended June 30, 2023. The Tampa, Florida-based cannabis operator disclosed a 12% revenue increase to $27.3 million, compared to $24.4 million in the same quarter last year.

“We delivered another quarter of year-over-year revenue growth and positive cash flow generation during the second quarter as we continued to execute on our growth objectives,” stated CEO Robert Beasley. “We continue to lay the foundation for growth and scalability while remaining excited about the opportunities ahead. In Florida, we have focused on enhancing manufacturing efficiencies and cultivation yields, which has resulted in both an improvement of product quality and cost of goods sold. This has allowed us to retain high-profit margins while price competition continues to heat up.”

The earnings report follows the announcement of Cansortium's merger with RIV Capital CNPOF. The new combined company will operate in Florida, New York, Texas and Pennsylvania, covering 25% of the U.S. population with eight cultivation and processing facilities and 42 retail dispensaries.

“Looking ahead, we are excited about our upcoming business combination with RIV Capital and have already begun key integration steps," Beasley continued. “Our shared focus remains on driving growth and profitability by leveraging our core strengths in cultivation, operating expertise and inventory optimization to drive results for shareholders. We remain laser-focused on our existing portfolio in Florida, Pennsylvania and Texas and look forward to closing the RIV Capital agreement in the fourth quarter.”

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Q2 2024 Financial Highlights (vs. Q2 2023)

• Net income amounted to $947,000, compared to a net loss of ($5.35 million).
• Gross profit was $20.6 million, compared to $12.16 million.
• Adjusted gross profit1 was $12.3 million or 48.6% of revenue, compared to $10.2 million or 46.4% of revenue.
• Adjusted EBITDA was $7.7 million compared to $6.8 million, with the increase primarily driven by higher revenues due to additional production and stores.
• Florida revenue increased 15% to $23.1 million compared to $20.1 million.
• Cash flow from operations for the three months ended June 30, 2024 was $2.8 million compared to $4.8 million in the prior year primarily due to the settlement of tax payments that had been carried over from previous periods.
• As of June 30, 2024, the company had approximately $8.5 million of cash and cash equivalents and $67.5 million of total debt, with approximately 300 million shares outstanding.

Read Also: Vext Cannabis Co.’s Q2 Revenue Drops Over 8% YoY, But Top Cannabis Analyst Sees Ohio Market As Major Growth Driver

Recent Operational Highlights

• In Florida, Cansortium currently operates 35 stores and anticipates opening 4 new stores by the second quarter of 2025.
• In Pennsylvania, Cansortium completed renovations and expanded its Hanover store, refreshing its look and doubling its size. The store remained operational for the entirety of the renovations.
• The company has begun integration activities with RIV Capital sharing best operational practices and driving efficiencies in advance of the business combination expected to close in the fourth quarter of 2024.

Price Action

Cansortium's shares closed Thursday's market share 2% higher at $0.15 per share.

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