IM Cannabis Announces Record Financial Results for Q1 2022, Revenue Grows 169% YoY to $23.6M

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IM Cannabis Corp. IMCC IMCCa medical and adult-use cannabis company operating in Israel, Canada and Germany, announced its financial results for the three months ended March 31, 2022 (Q1) on Thursday.

Financial results for the 1st quarter of 2022

  • Revenue were $23.6 million in Q1 2022, an increase of 169% from Q1 2021 and 18% sequentially. Total dried flower sold for the first quarter of 2022 was 3,035 kg at an average selling price of $6.23 per gram, compared to 1,185 kg for the same period in 2021 at an average selling price of $4.94 $ per gram, mainly due to the higher average selling price per gram. the company recognized thanks to its pharmacies acquired in Israel.
  • Gross profitbefore fair value adjustments, was $6.4 million in Q1 2022, compared to $4.6 million in Q1 2021.
  • General and administrative expenses were $9.0 million in Q1 2022 compared to $4.9 million in Q1 2021. The increase in general and administrative expenses is mainly attributable to the growth of corporate activities in Israel and Canada following the acquisitions of the Company in 2021.
  • Sales and marketing expenses were $3.7 million in the first quarter of 2022, compared to $1.2 million in the first quarter of 2021. The increase in sales and marketing expenses is primarily due to the company’s increased marketing efforts in Israel, the launch of the brand in Germany and the increase in distribution expenses linked to sales growth and the consolidation of sales and marketing expenses of the entities acquired in 2021.
  • Adjusted EBITDA loss
  • Net loss was $10.7 million in Q1 2022, compared to net income of $4.7 million in Q1 2021. Basic and diluted loss per share in Q1 2022 of $0.14 and $0.17, respectively, compared to basic and diluted Q1 2021 earnings (loss) per share of $0.11 and $0.06, respectively.
  • Cash and cash equivalents totaled $10.3 million as of March 31, 2022, compared to $13.9 million as of December 31, 2021.

Management comment

“We continue to make good progress on the path to profitability and delivered another quarter of record revenues, which grew 169% year-over-year in the first quarter,” said Oren Shuster, CEO of IMC, in a press release. “We are executing key initiatives that are driving margin expansion in each of our market segments and across our operating footprint, which reflect the benefits of integrating our global model.

“In Israel, we are working to consolidate four of the country’s leading pharmacies and centralize our distribution and customer support to potentially create significant cost savings while strengthening our brand presence,” added the CEO.

“Adjusted EBITDA, which we expect to achieve on a steady basis in the second quarter of 2022, positioning us to be cash flow positive on a steady basis in the following quarter. Given the current environment, we also continue to lay a solid foundation in Germany, where we have established a positive reputation among the healthcare community in Europe’s largest medical cannabis market and will be launching our WAGNERS brand this year,” concluded Shuster.

Operational Highlights

  • The company’s WAGNERS brand sold out in Israel within three weeks, reflecting strong demand for the brand and premium indoor-grown cannabis imported from its Canadian cultivation subsidiary.
  • Completed the strategic acquisition of 51% of the rights of Oranim Pharm Partnership, one of the largest pharmacies selling medical cannabis in Israel and the largest pharmacy selling medical cannabis in the Jerusalem area.
  • Completed the acquisition of Revoly Trading and Marketing Ltd., dba Vironna Pharm, which ranks among the top 10 cannabis distribution outlets in Israel and is one of the largest pharmacies in Israel serving the Arab consumer segment in rapid growth of the medical cannabis market.
  • Completed the acquisition of RA Yarok Pharm Ltd., a leading medical cannabis pharmacy located in central Israel, and Rosen High Way Ltd., a trading and distribution center with an IMC-GDP license that provides medical cannabis storage and distribution services, and logistics solutions for cannabis businesses and pharmacies in Israel.
  • Acquisition of an IMC-GDP license for the distribution of medical cannabis from Panaxia Pharmaceutical Industries Israel Ltd. and Panaxia Logistics Ltd., which are part of the Panaxia Labs Israel, Ltd. group of companies, including Israel’s largest online retail and pharmacy company.

Photo by Damir Spanic on Unsplash.

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