WeedMD sees higher 3Q revenue as cultivation costs decline

WeedMD Inc (CVE:WMD) (OTCQX:WDDMF) (FRA:4WE) said its 3Q revenue rose by 8% quarter over quarter to $6.3 million, while its cultivation costs fell year over year.

The company’s cultivation cost per gram for the quarter came in at $0.34, compared to $0.72 during the same period last year, while its adult-use kilograms sold increased by 24% from 2Q 2020.

WeedMD CEO Angelo Tsebelis said in a statement: “Our revenue growth quarter-over-quarter demonstrates the current momentum we are seeing in our business, particularly in our adult-use segment where consumer appeal for our Color Cannabis products continues to grow.”

READ: WeedMD on a pathway to profitable growth as it accelerates its Cannabis 2.0 efforts 

He added: “With our expanded national sales team, we are making steady traction in establishing new retail accounts and shipping product across the country at a faster pace. We remained highly focused on delivery of our expanding quality product portfolio to consumers during the quarter in the adult-use market and our proprietary direct-to-patient medical channel leading to improved margins going forward.”

WeedMD CFO Lincoln Greenidge also weighed in on the company’s financial results, stating: “This quarter, our team sharpened its focus to concentrate on capturing long-lasting opportunities and initiatives that will help achieve further cost improvement, margin expansion and drive organic growth across our adult-use and medical channels.”

He added: “With WeedMD’s second year of outdoor harvest now complete and our cultivation rooms cycling consistent yields, we expect continued revenue growth going forward as we introduce new products in 2021.”

The company noted that its gross margin in 3Q, excluding non-cash items, improved to 42% from 39% in 2Q 2020, which WeedMD management attributed to its continued focus on optimization.

The group’s adjusted EBITDA loss, meanwhile, totalled $5.3 million for 3Q 2020, compared with an adjusted EBITDA loss of $2.0 million for the same period in 2019, which the company said was primarily a result of an inventory write-off of approximately $1.2 million and expenses incurred related to increased production, in addition to selling and general and administrative expenses that were incurred before it completed its optimization initiatives.  

WeedMD ended the quarter with $31.1 million in cash and equivalents as of September 30, 2020.

Contact Sean at [email protected]

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