California-based cannabis company, Lowell Farms Inc. (OTC:LOWLF), reported Thursday evening its unaudited financial and operational results for the second quarter of 2023.
During Q2 2023, the company's net revenue decreased by 47% to $7.0 million from $13.2 million in the same period of 2022 and also saw a 7% decline from Q1 2023.
Chief Executive Officer and Co-Founder Mark Ainsworth stated in a press release: "Having implemented cost-saving measures throughout the first and second quarters of 2023, we remain focused on an upward trajectory, and we continue to push forward while navigating the challenges presented to us – both legislatively and financially – as leaders in the California cannabis marketplace."
"Our focus for the foreseeable future remains on maximizing efficiencies and new revenue streams, including third-party distribution, while expanding our portfolio of owned brands with new product lines that will captivate and command loyalty among consumers," Ainsworth said.
Gross Margin Decline, Improved Operating Loss, Shift In Adjusted EBITDA
- In the second quarter of 2023, the gross margin was negative at 4.8%, leading to a loss of $0.3 million, while the previous quarter had a positive gross margin of 1.8%, resulting in a profit of $0.1 million.
- Operating loss improved by 12% year-over-year, amounting to $2.6 million for Q2 2023.
- Net loss for the period was $0.1 million, a significant reduction from the net loss of $4.6 million incurred during Q2 2022.
- Adjusted EBITDA for Q2 2023 was negative $1.2 million, showing a slight increase from the previous quarters in 2022 and 2023.
Varied Revenue Trends: CPG And Wholesale Sales Decline
The revenue sources presented mixed results with different degrees of impact. Revenue from consumer packaged goods (CPG) declined by 40% when measured against Q2 2022, and bulk revenue from self-grown wholesale products decreased by 34% compared to the same period last year.
However, the company observed an interesting trend in Q2 2023, as there was a substantial reduction in volume by 37%, accompanied by a significant 44% increase in realized price per pound in contrast to Q1 2023.
Price Action
Lowell's shares were trading 46.20% up at $0.05, after market close on Thursday.
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Photo by David Wirzba on Unsplash.
