Flora Growth Goes Back To Net Loss In Q1, Positive About 'Landmark Reform' In The US, Focuses On Europe
Florida-based cannabis company Growth Corp. (NASDAQ:FLGC) reported its financial and operating results Tuesday for the first quarter ended March 31, 2024, disclosing a net loss of $3.4 million, compared to a net loss of $3.9 million in the same quarter last year. Per the company's filing with the Securities and Exchange Commission, quarterly revenue was $18.03 million, which compares to $19.3 million in the same period of 2023.
“2024 has been a catalyst-rich period for Flora. Legislators in the primary markets in which we operate, namely the U.S. and Germany, have demonstrated a willingness to advance a progressive cannabis agenda," stated Clifford Starke, chief executive officer. "In Germany, the de-scheduling of cannabis, the reforms surrounding cultivation for personal use, the establishment of cannabis social clubs, and the removal of cannabis from the list of prohibited substances in the Narcotics Act, represent historical milestones."
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Q1 Financial Summary
- Adjusted EBITDA was a loss of $1.5 million compared to an adjusted EBITDA loss of $800,000 in the comparable quarter.
- Total operating expenses were $6.3 million, compared to $7.7 million in the comparable quarter. Excluding the impact of non-cash impairment of $900,000 operating expenses decreased by 29% year-over-year.
- Cash used in operating activities was $1.3 million compared to cash used in operating activities of $4.3 million in the comparable quarter, an improvement of 70% quarter-over-quarter.
- Gross profit was $3.85 million, versus $5.35 in the first quarter of 2023.
See Also: Flora Growth’s Stock Trading Higher On Pricing $3.2M Public Offering Of Common Shares
Expanding In Germany, UK, Poland And Israel
In April, Flora entered into a definitive agreement to acquire all of the issued and outstanding shares of Germany-based TruHC Pharma GmbH.
The company's move to further cement its global footprint came on the heels of a new German cannabis law that went into effect on April 1, which partially legalizes cannabis by allowing adults over 18 to possess up to 25 grams of dried cannabis and grow three marijuana plants at home.
“We have been proactive in responding to Germany’s legislation. In April, we acquired TruHC Pharma GmbH (“TruHC”) – an entity with a strategically built German cannabis platform with EU-GMP processing, production, laboratory, and storage licenses," Starke continued. "TruHC also holds GDP wholesale licenses for import and export, as well as the requisite medical cannabis licenses.
Flora also recently signed an exclusive distribution agreement with Althea Group Holdings Limited for Vessel brands in the United Kingdom and also entered an exclusive distribution agreement with Me Raw Trade Ltd. to distribute both JustCBD and Vessel-branded products in Poland.
The company also entered into a strategic distribution agreement with IM Cannabis Corp. (NASDAQ:IMCC) for Vessel products in Israel. Vessel is a wholly owned subsidiary of the Company and a market-leading brand of vape pens and smoking accessories.
“Additionally, reports have emerged suggesting the U.S. Drug Enforcement Administration may reclassify cannabis from a Schedule I to a Schedule III substance. It could be the first real step towards a progressive federal policy in over 50 years. We believe this potential landmark reform could have positive implications for the Company,” concluded Starke.
Related links: Blooming: Flora Growth’s First Profitable Quarter Amid Strategic Shifts
Price Action
Flora Growth shares closed Tuesday’s market session 5.19% lower at $1.28 per share.