Nextleaf Solutions Ltd's (CSE:OILS, OTCQB:OILFF) finance chief told investors that 2021 had been a "significant year of graduating the business to increasingly focus on scaling commercial activity" as the company issued its annual statement for the fiscal year to September 30.
"A significant portion of our cost of sales is related to our existing excess capacity, as such, as our revenue scales our gross profit should increase exponentially," explained Nextleaf chief financial officer Charles Ackerman.
He added: “We've added optionality to our revenue model with the addition of cannabis product sales to B2B bulks sales. Combining the B2C and B2B activity all drives further utilization and scale in our extraction economics which is the top of our value chain."
READ: Nextleaf says Glacial Gold CBD and THC products now available nationally in Canada through its medical cannabis distribution partner Mendo
In October 2021, Nextleaf was authorized by the Saskatchewan Liquor and Gaming Authority to distribute cannabis products in Saskatchewan.
The Vancouver, British Columbia-based company entered into a distribution agreement with Medicibis, a Québec-based cannabis processor and distributor, for national distribution of Glacial Gold products through Mendo's national medical cannabis sales platform, www.Mendocannabis.ca.
In November 2021, Nextleaf received acceptance of its application for a Dealer's Licence, now formally under review by Health Canada.
Assuming approval from Health Canada, the Dealer's Licence is expected to allow the company to conduct a variety of activities relating to psilocybin and psilocin including R&D, IP development, production of base substance materials, laboratory analysis, as well as the sale and distribution of the substances to authorized individuals, including researchers and for its use in clinical trials.
The company also released the most potent ingestible CBD product in the Canadian market, with Glacial Gold Distilled CBD 200 Oil available nationally to medical patients through Mendo, and for adult-use consumers in British Columbia.
Other milestones achieved in 2021 included:
- Bulk cannabis distillate sales exceeded $3.00MM for the year ended September 30, 2021
- Bulk cannabis distillate sales increased 1,300% year over year
- Established a commercial supply partnership with a Nasdaq-listed global cannabis company, with Nextleaf supplying CBD ingredients to power the partner's CBD products and brands, including edibles, ingestible oils, and vape carts
- Acquired the award-winning prohibition-era brand, Glacial Gold, and expanded into branded product manufacturing and sales
- Launched Glacial Gold vapes and oils in British Columbia, with over $300,000 in product sales recognized during the first four weeks in market (September 2021)
- Established distribution of Glacial Gold products into three provincial markets and nationally for medical cannabis patients
- Reduced selling, general, and administrative expenses (SG&A) and R&D expenditures year over year
Contact Ritika at ritika@proactiveinvestors.com