Adam JacksonChristina Lake Cannabis Corp. (CSE: CLC) reported a decent uptick in revenue for its first quarter of fiscal 2024, as the Canadian cannabis producer expands its cultivation amid market challenges.
According to filings, company’s revenue rose 56% to C$2.99 million for the quarter ended Feb. 29, up from C$1.92 million in the same period last year. Gross margin improved to 37.1% from 32.2%.
Despite higher revenue, Christina Lake posted a net loss of $1.20 million, slightly better than the C$1.21 million loss in the first quarter of 2023. Results were impacted by a C$324,074 bad debt expense.
The company acquired a 342-acre property in Midway, British Columbia, in February for C$3 million, adding over 100 acres of licensed cultivation space. The purchase was financed through a secured convertible debenture.
“The Company also announced the first 80-acre crop of propriety strains will be planted in the spring of 2024,” it said in management discussion filings.
Cash on hand rose to C$1.97 million as of Feb. 29, up from C$1.47 million at the end of November 2023. Convertible debentures nearly doubled to C$9.29 million from C$5.17 million.
The company closed a C$1.93 million secured convertible debenture private placement in February, with insiders contributing C$1.36 million.
The quarterly report follows the company’s delayed fiscal year 2023 results, released last week. For the year ending Nov. 30, 2023, Christina Lake posted a 17% increase in revenue to C$11.8 million. The company’s net loss widened to C$4.1 million from C$2 million, largely due to a C$2.2 million impairment charge.
The company noted in its annual report that its limited operating history and continuing losses raise “significant doubt” about its ability to continue as a going concern. The firm also cited industry-wide challenges including regulatory uncertainties and intense competition. Despite the challenges, the firm continues to pursue expansion plans, including the development of its newly acquired Midway property.
“The Company intends to finish processing its remaining biomass and oils from the 2023 crop and is focused on cultivation expansion in 2024 following the acquisition of the 100 acres licensed cultivation space at the Midway property,” management said. “To meet growing demand, the Company is focused on expanding its supply of high quality and low-cost cannabis products.”
At the end of February, the company’s working capital stood at C$6.57 million, up from C$6.01 million at the end of November.
