IM Cannabis Corp. (CSE:IMCC) (NASDAQ:IMCC), a medical and adult-use cannabis company with operations in Israel, Canada, and Germany, announced its financial results on Thursday for the three months ended March 31, 2022 (Q1).
Q1 2022 Financial Results
- Revenues were $23.6 million in Q1 2022, representing an increase of 169% from Q1 2021 and 18% sequentially. Total dried flower sold for Q1 2022 was 3,035kg at an average selling price of $6.23 per gram, compared to 1,185kg for the same period in 2021 at an average selling price of $4.94 per gram, derived mainly from the higher average selling price per gram the company recognized through its acquired pharmacies in Israel.
- Gross profit, before fair value adjustments, was $6.4 million in Q1 2022 compared to $4.6 million in Q1 2021.
- General and administrative expenses were $9.0 million in Q1 2022 compared to $4.9 million in Q1 2021. The increase in the general and administrative expenses is mainly attributable to the growing corporate activities in Israel and Canada following the Company's acquisitions in 2021.
- Sales and marketing expenses were $3.7 million in Q1 2022 compared to $1.2 million in Q1 2021. The increase in the sales and marketing expenses was due mainly to the company's increased marketing efforts in Israel, brand launch in Germany, and increased distribution expenses relating to the growth in sales and consolidation of sales and marketing expenses of entities acquired in 2021.
- Adjusted EBITDA loss was $4.5 million in Q1 2022 compared to $1.0 million in Q1 2021.
- Net loss was $10.7 million in Q1 2022 compared to a net income of $4.7 million in Q1 2021. Basic and diluted loss per share in Q1 2022 of $0.14 and $0.17, respectively, compared to basic and diluted income (loss) per share in Q1 2021 of $0.11 and $0.06, respectively.
- Cash and cash equivalents totaled $10.3 million on March 31, 2022, compared to $13.9 million on December 31, 2021.
Commentary From Management
"We continue to progress well on our path to profitability and achieved another quarter of record revenues, which grew 169% year-over-year in the first quarter," stated Oren Shuster, CEO of IMC, in a press release. "We execute key initiatives that drive margin expansion within each of our market segments and across our operating footprint, which reflect the benefits of integrating our global model.
“In Israel, we work to consolidate four of the country's leading pharmacies and centralize our distribution and customer support to potentially create significant cost savings while strengthening our brand presence,” added the CEO.
"Adjusted EBITDA, which we expect to achieve on a run-rate basis in the second quarter of 2022, positioning us to be cash flow positive on a run-rate basis in the following quarter. Given the unfolding environment, we also continue to lay a strong foundation in Germany, where we have established a positive reputation among the healthcare community of the largest medical cannabis market in Europe and will launch our WAGNERS brand this year,” concluded Shuster.
Operational Highlights
- The Company's WAGNERS brand sold out in Israel in three weeks, reflecting strong demand for the brand and premium indoor-grown cannabis imported from its Canadian cultivation subsidiary.
- Completed the strategic acquisition of 51% of the rights in Oranim Pharm Partnership, one of the largest pharmacies selling medical cannabis in Israel and the largest pharmacy selling medical cannabis in the Jerusalem area.
- Completed the acquisition of Revoly Trading and Marketing Ltd., dba Vironna Pharm which ranks among the top 10 single cannabis dispensing points in Israel and is one of the largest pharmacies in Israel serving the rapidly growing Arab consumer segment of the medical cannabis market.
- Completed the acquisition of R.A. Yarok Pharm Ltd., a leading medical cannabis pharmacy located in central Israel, and Rosen High Way Ltd., a trade and distribution center with an IMC-GDP license that provides medical cannabis storage, and distribution services, and logistics solutions for cannabis companies and pharmacies in Israel.
- Acquired an IMC-GDP license for the distribution of medical cannabis from Panaxia Pharmaceutical Industries Israel Ltd. and Panaxia Logistics Ltd., part of the Panaxia Labs Israel, Ltd. group of companies, including Israel's largest retail and online pharmacy business.
Photo by Damir Spanic on Unsplash.
