WeedMD Inc (CVE:WMD) (OTCQX:WDDMF) (FRA:4WE) reported its fiscal 2Q results that saw it generate C$5.9 million over the quarter ended June 30, 2020, driven by its new direct-to-consumer model in the adult-use market.
The cannabis company is sharpening its focus on higher-margin consumer-directed revenue, which contributed $2.4 million to overall revenue for the quarter.
Total cannabis sold came in at nearly 977,000 grams at an average selling price of C$4.96 per gram and a cultivation cost of C$0.55 per gram, as compared to the C$3.76 per gram at C$0.96 cultivation cost it sold for during the same period a year ago.
For the six-month period to end June 30, WeedMD recorded net revenue of $18 million, spurred by its acquisition of Starseed Medicinal Inc in December 2019.
“During the second quarter, we advanced our integration with Starseed to drive direct-to-consumer revenue and made significant operational progress in ramping up production,” CEO Angelo Tsebelis told shareholders in a statement.
“Our unique medical service platform and growing brand recognition for our Color Cannabis adult-use products contributed to our revenue for the quarter.”
The Toronto-based company also entered into multiple new strategic partnerships and new consumer categories during the quarter, with expanded products manufactured from in-house biomass at its extraction facility.
Tsebelis added that the group anticipates an “impressive” harvest from its outdoor platform in the coming weeks.
Credit facility increases liquidity
Earlier this week, WeedMD closed a C$30 million credit facility from its strategic investor LiUNA Pension Fund of Eastern and Central Canada (LPF), strengthening its liquidity and allowing the firm to boost brand awareness and distribution channels.
“The continued support and $30 million in non-dilutive financing we received from our partner and strategic investor LPF will provide us with increased liquidity to support our future sales growth,” Tsebelis added.
WeedMD reported an adjusted EBITDA loss of C$5 million during the quarter as a result of an inventory write-off of around $1.3 million, substantial expenses incurred related to increased production, selling and general and administrative expenses, prior to optimization initiatives underway in the second half of 2020, it told investors.
The company ended the period with C$5.7 million in cash and equivalents.
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