Cansortium Inc., a Tampa, Florida-based cannabis operator operating under the FLUENT brand, reported strong financial results for the second quarter ended June 30, 2023. The company achieved a 12% increase in revenue, reaching $27.3 million compared to $24.4 million in the same period last year. This growth was attributed to increased production and store operations, leading to positive cash flow generation. CEO Robert Beasley highlighted the company’s focus on enhancing manufacturing efficiencies and cultivation yields, resulting in improved product quality and cost of goods sold. This strategy allowed Cansortium to maintain high-profit margins despite intensifying price competition in the market.
The earnings report comes on the heels of Cansortium’s announced merger with RIV Capital. The combined entity will operate in Florida, New York, Texas, and Pennsylvania, covering 25% of the U.S. population. The merger will bring together eight cultivation and processing facilities and 42 retail dispensaries, creating a significant presence in the cannabis industry. Beasley expressed excitement about the integration process with RIV Capital, stating that the focus remains on driving growth and profitability by leveraging core strengths in cultivation, operations, and inventory optimization. The merger is expected to close in the fourth quarter of 2024.
Here are key financial highlights from the second quarter:
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Net income:
$947,000, a significant improvement compared to a net loss of $5.35 million in Q2 2023.*
Gross profit:
$20.6 million, up from $12.16 million in the same period last year.*
Adjusted gross profit:
$12.3 million (48.6% of revenue), compared to $10.2 million (46.4% of revenue) in Q2 2023.*
Adjusted EBITDA:
$7.7 million, an increase from $6.8 million in Q2 2023, driven by higher revenues.*
Florida revenue:
Increased 15% to $23.1 million compared to $20.1 million in Q2 2023.As of June 30, 2024, Cansortium had approximately $8.5 million in cash and cash equivalents and $67.5 million in total debt. The company has approximately 300 million shares outstanding.
In terms of operational highlights, Cansortium currently operates 35 stores in Florida and plans to open four new stores by the second quarter of 2025. The company has completed renovations and expanded its Hanover store in Pennsylvania, doubling its size while maintaining operational continuity throughout the process. Cansortium has already begun integration activities with RIV Capital, sharing best practices and driving efficiencies ahead of the anticipated merger closure in the fourth quarter of 2024.
On Thursday, Cansortium’s shares closed 2% higher at $0.15 per share.
