Delta 9 Cannabis Inc (TSE:DN) (OTCQX:DLNTF) posted strong quarterly and year-end results on Wednesday evening including a company-record 4Q revenue of $14.2 million and $52 million for the year.
The quarterly figure was a 34% increase compared to the $10.6 million in the year-ago quarter, while the firm’s 2020 revenue total was up 64% from 2019 levels of $31.8 million.
Winnipeg-based Delta 9 saw its retail sales increase by 109% in 2020 to $32.2 million, while its wholesale and B2B numbers also increased compared to 2019.
READ: Delta 9 Cannabis announces grand opening of its eleventh cannabis retail store, and eighth in the Province of Manitoba
Sequentially, the firm’s net revenue increased by 9% quarter-over-quarter from the $13.1 million figure it delivered in 3Q.
The bulk of Delta 9’s revenue was derived from its retail stores in Canada, which reported $10.2 million in sales for the three-month period ending December 31, 2020. The group processed more transactions and higher average transaction sizes compared to 3Q, while the total number of grams sold in stores also increased.
On the wholesale front, the firm produced around 2.1 million grams at a total cost per gram of $0.80, selling 1.2 million grams at an average price per gram of $3.57.
"We saw real strength in the fourth quarter in our wholesale numbers. We’ve almost doubled from the second to third quarter and then almost doubled that in 4Q," CEO John Arbuthnot told Proactive.
"Over the next few quarters I think we’ll be at a point where we’re selling every gram we can produce. It’s a stark contrast to many of our larger competitors who are still struggling with shuttering capacity and trying to meter the supply and demand components of the market for their products."
The group’s net loss came in at $3.2 million or $0.04 per share, but Adjusted EBITDA came in at $1.9 million compared to a loss of $474,000 in the previous quarter.
Accelerated revenue
"To be one of a select few cannabis companies that’s produed a full year positive Adjusted EBITDA points to the quality of our operations over the last 12 months," Arbuthnot said. "Operating cash flow for the full 12 months was over $1.5 million, so not only Adjusted EBITDA but positive operating cash from the business – again, very unique in a cannabis context."
One of Canada’s original cannabis companies, Delta 9 sells products through its wholesale and retail sales channels and markets its cannabis ‘Grow Pods’ to other businesses.
The company announced the opening of its eleventh Delta 9 Cannabis retail store in March 2021.
Eyes on the US market
Looking ahead, Arbuthnot told Proactive that the company is continuing its pivot on the B2B business south of the border.
"We’re expanding our sales force to include a US focus only. Obviously we can’t touch the plant on the US side yet, but a lot of momentum behind legalization. If we have more near-term exposure through sales of our Grow Pods, then that will become a key focus for us on the B2B segment in continuing to see growth into the future."
--Updated with additional CEO comments and video--
Contact Angela at angela@proactiveinvestors.com
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