The Good Shroom (TSX-V:MUSH) Co Inc has reported a strong rise in second-quarter 2022 revenue after entering new markets.
The Montreal-based company recorded $363,229 in sales revenue for the three months to January 31, 2022, eight-and-a-half times higher than the preceding quarter. The majority of this was derived from the launch of Nordique Royale's Afghan Gold hashish in Quebec and the rest from its functional mushroom beverages, it said.
Nordique Royale and Velada, which launched in 3Q in both Quebec and Ontario, operate through licensed subsidiary Teonan Biomedical Inc.
"We are pleased with the results of this quarter where we launched a new cannabis brand which continues to grow,” CEO Eric Ronsse said in a statement. “We've analysed the sales data of our top-performing products, identified key product attributes and have applied them to a variety of new hash-based products which will be submitted for approval in Quebec and Ontario.”
The company’s 2Q gross profit margin improved to $129,826 compared to $2,526 in 1Q, while its operating loss narrowed to $241,148 from $371,865.
While Nordique Royale's Afghan Gold hashish is already in the top five hash products in terms of sales rankings in Quebec, the company noted that, according to the Weed Crawler website, five out of the ten best selling infusions in the province are Velada products.
Following Teonan’s entry into the distribution networks of the two largest distributors in the US - United Natural Foods and Kehe - the company said it will be submitting its products to a variety of key retailers during 2022, including Wholefoods, Albertsons Safeway (NYSE:SWY), and Wegmans, along with a large number of regional players. Its products are now for sale in all Central Market locations in the US, it added.
The company also announced it has engaged Montreal-based investor relations consultancy firm Paradox to increase its visibility in the investment community through direct introductions, marketing and organization of presentations focused on capital market professionals.
Paradox has been engaged at $10,000 per month for 24 months commencing March 28, 2022, subject to either party's 30-day written termination notice. In addition, the company has granted 800,000 incentive stock options exercisable at 10 cents per share for two years and will vest over one year in four equal quarterly tranches.
The Good Shroom Co operates a portfolio of brands that include traditional cannabis and beverage products. It aims to promote the use of functional ingredients such as probiotics and functional mushrooms in consumer products.
Contact the author at stephen.gunnion@proactiveinvestors.com