PALM BEACH, Florida, Jan. 13, 2021 /PRNewswire/ -- January 13, 2021 - It's that time of the year when various articles and reports look back on the U.S. and Canadian 2020 cannabis markets' performance. Many agree that while both markets performed well in toto they say that the cannabis industry had a strong year with the U.S. markets significantly outperforming Canadian peers. The cannabis sector just finished a strong 2020 with the U.S. market soaring while many Canadian stocks struggled. An recent article said: "Looking into 2021, we think the theme will continue to play out as the world's two largest cannabis markets face divergent outlooks. More importantly, within each market, there are certain companies positioned better to thrive and some will continue to struggle." The article continued: "We expect the U.S. cannabis sector and U.S.-focused ETFs to outperform again in 2021 due to several reasons. First of all, the size of the prize in Canada is too small. The Canadian adult-use market reached US$2.5B in October 2020 which is smaller than California's legal market in 2019 estimated at $2.8B. The California market is expected to reach $4B in 2020. While the Canadian market has also doubled its monthly sales during the pandemic, so did the U.S. markets. All in all, the U.S. is a much larger market and it is estimated to be almost 10x the size of the Canadian market." Active Companies active today in the cannabis related markets include: Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), Item 9 Labs Corp. (OTCQX: INLB), Jushi Holdings Inc (OTCQB: JUSHF) (CSE: JUSH), KushCo Holdings, Inc. (OTCQX: KSHB), Aphria Inc. (NASDAQ: APHA) (TSX: APHA).
"Secondly, the U.S. market has better regulatory environments for existing players. While cannabis remains illegal federally, more states have legalized cannabis including all five states during the 2020 state ballots (Arizona, Mississippi, Montana, New Jersey, and South Dakota). Most U.S. states allow for a limited number of licenses which created excellent opportunities for market access and profitability. Most markets are undersupplied which led to explosive organic growth and strong profits."
Item 9 Labs Corp. (OTCQX: INLB) Breaking News: Item 9 Labs Reports Record Revenue for Fiscal Year 2020 - Annual revenue growth of 65% fueled by increases in production and market demand - Item 9 Labs Corp. ("Item 9 Labs," or the "Company"), a vertically integrated cannabis operator that produces premium products, today reported the Company's operating and financial results for the fiscal year (FY) ended September 30, 2020.
Key Financial Highlights for FY 2020
- Revenue increased 65% to $8.1 million
- Gross profit increased 39% to $3.3 million
- Operating loss decreased 46% to $5.4 million
- Operating expenses as a percentage of gross profit declined from 526% to 265%
- Adjusted EBITDA loss decreased 9% to $2.1 million
Key Business Highlights for FY 2020
- Ramped up cultivation and production operations
- Continued to improve the operating capacity of cultivation and processing facilities
- Signed definitive merger agreement with ONE Cannabis Group
- Named Mike (Mic) Keskey, retired former President of U.S. Retail for Best Buy Co., Inc. (NYSE: BBY), and Doug Bowden, a 30-year consumer electronics veteran with extensive experience in real estate investment and development, to Board of Directors
- Appointed Andrew Bowden as Chief Executive Officer
- Earned one Errl Cup and four 710 Degree Cup awards, Arizona's largest cannabis competitions
- Qualified to trade on OTCQX Market (upgraded from OTC Pink to OTCQB, then from OTCQB to OTCQX, both in August)
Management Commentary - "This past year has been an exciting and successful time for our team," commented Item 9 Labs Chief Executive Officer Andrew Bowden. "We've seen strong, steady performance with sequential quarter-over-quarter growth rates of nearly 20% since my appointment as CEO at the start of our 2020 fiscal year. Our team continues to exceed expectations and has efficiently ramped production to meet heightened demand for our products, setting the stage for key strategic and operational developments in 2021. We anticipate increased business activities as we continue to pursue opportunities that position the company for growth and profitability."
Bowden continued, "We are still in the early stages of our growth and are already seeing an acceleration with Arizona's adult-use marijuana market opening in the first half of 2021, which we estimate will increase our consumer base by 500%. We're prepared to meet this demand through our streamlined production process and by expanding our operational cultivation footprint by more than 300% in the year ahead."
"In addition to continued growth in Arizona, we look forward to closing our pending merger with ONE Cannabis Group and their cannabis franchise, Unity Rd. We expect the combination of our premium, award-winning cannabis products with the nation's leading dispensary franchise will elevate our brand footprint through national distribution across Unity Rd.'s locally owned and operated dispensaries. This will ease new market product entry and create recurring revenue streams through franchise royalty fees," Bowden concluded. Read the full Press Release with Financials and more for INLB at: https://www.financialnewsmedia.com/news-inlb
In other active company news in the markets this week:
Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), the parent company of Organigram Inc., a leading licensed producer of cannabis, announced its results for the first quarter ended November 30, 2020 ("Q1 Fiscal 2021" or "Q1 2021").
"We are pleased with our double-digit sales growth in the Canadian adult-use recreational market this past quarter as it reflects the success of many of our new product launches, particularly in the dried flower value segment," said Greg Engel, CEO. "Now we look forward to our new higher margin Edison dried flower offerings contributing substantially to overall revenue with even more new products to come in the next few quarters. We believe our product portfolio revitalization combined with additional resources to ramp up production and achieve greater economies of scale as well as our relentless focus on increased automation and cost efficiency opportunities position us well to generate further top-line growth and significantly improve gross margins."
Jushi Holdings Inc (CSE: JUSH) (OTCMKTS: JUSHF), a vertically integrated, multi-state cannabis operator, announced it will open its second retail location in Sauget, Illinois, its 13th nationally and third retail location in Illinois: BEYOND / HELLO Route 3 The new store location will begin serving adult-use cannabis customers on Tuesday, December 22, 2020.
"Located in the heart of Metro East's nightlife, our second retail location in Sauget and third in the state will help to meet robust consumer demand for high-quality cannabis products in the Prairie State," said Jim Cacioppo, CEO, Chairman & Founder of Jushi. "We have been very successful in procuring top-notch cannabis products and we continue to raise the bar for what an updated, in-store, digital and customer-first retail experience can deliver. As one of our core markets, we remain optimistic about new organic and inorganic growth opportunities in Illinois. In the coming year, we will continue to broaden access with an additional store opening in Bloomington, Illinois and explore new growth opportunities that deliver value to both our loyal customers and shareholders."
KushCo Holdings, Inc. (OTCQX:KSHB), a premier provider of ancillary products and services to the legal cannabis and CBD industries, recently reported financial results for its fiscal first quarter ended November 30, 2020.
Nick Kovacevich, KushCo's Co-founder, Chairman and Chief Executive Officer, commented: "Fiscal Q1 2021 built on the strong momentum we achieved in the previous quarter with modest revenue growth and positive adjusted EBITDA for the second quarter in a row. We were expecting more significant growth during the quarter, but like many other importers of goods, we were faced with temporary, yet unexpected and uncontrollable, shipping delays due to record-breaking shipments to U.S. ports around the holiday season, which were exacerbated by new COVID-19 restrictions. As a result, some of the revenue that we were expecting to realize in Q1 was pushed into Q2, especially in the month of December where we had one of our strongest months in company history with $14.7 million in revenue.
"More importantly, we're starting to see some of our higher value custom packaging projects finally come to fruition, after months of hard work with our customers to bring these products to life. We recognized initial revenue from these projects in Q1, but have a strong backlog of projects that are expected to ship in Q2 and throughout the remainder of the fiscal year. In addition, we have been locking in additional long-term supply contracts with our major MSO and LP customers, including a top 5 public MSO during the fiscal first quarter, which brings our total to four customer supply contracts in place, with several more in progress.
Aphria Inc. (NASDAQ: APHA) (TSX: APHA), a leading global cannabis company inspiring and empowering the worldwide community to live their very best life, and Tilray, Inc. (Nasdaq: TLRY), a global pioneer in cannabis research, cultivation, production and distribution, recently announced that they have entered into a definitive agreement (the "Agreement") to combine their businesses and create the world's largest global cannabis company (the "Combined Company") based on pro forma revenue1. The deal is pursuant to a plan of arrangement (the "Arrangement") under the Business Corporations Act (Ontario), and the implied pro forma equity value of the Combined Company is approximately C$5.0 billion (US$3.9 billion), based on the share price of Aphria and Tilray at the close of market on December 15, 2020. Following the completion of the Arrangement, the Combined Company will have principal offices in the United States (New York and Seattle), Canada (Toronto, Leamington and Vancouver Island), Portugal and Germany, and it will operate under the Tilray corporate name with shares trading on NASDAQ under ticker symbol "TLRY".
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