Premium Drives Record Net Growth for Rubicon, Keeps Rosy Outlook for Segment

May 23, 2023 · Green Market Report

Higher production costs is forcing the company to go lean.

Rubicon Organics Inc. (TSXV: ROMJ) (OTCQX: ROMJF), a licensed producer of “organic, certified” premium cannabis, reported a notable year-over-year growth of 71% revenue growth in its first quarter 2023.

The rise is attributed to robust growth in the premium cannabis segment and expansion of its product offerings.

Rubicon reported a record net revenue of C$8.8 million for the first quarter, and positive adjusted EBITDA for the fourth consecutive quarter – even as the industry appeared in a lull, based on the first batch of earnings this season.

The boost was supported by a 2.1% national market share of flower and pre-rolls, and 5.3% share of premium flower and pre-rolls.

“While acknowledging the ongoing challenges faced by the Canadian cannabis industry, including both licensed producers and retail stores, I maintain a positive outlook on the premium segment which continues to experience robust double-digit growth,” Margaret Brodie, who is both interim CEO and CFO of Rubicon, said in a statement.

Significant revenue growth was driven by an expansion of 1964 Supply Co, which recorded a full year of sales in all key markets. The launch of several new strains, larger formats, and an infused pre-roll offering under the Simply Bare Organic brand also contributed to the revenue rise.

Rubicon also reported revenue growth across all key markets – Alberta, British Columbia, Ontario, and Quebec – accounting for 99% of sales in Q1 2023.

Operating expenses remained stable due to operational efficiencies, resulting in higher gross profit of C$700,000. Loss from operations fell significantly to C$300,000 from C$1.1 million in the previous year.

However, Rubicon also reported a 13% uptick in production costs and a 53% increase in inventory expensed to cost of sales, primarily due to an increase in plant density, enhanced handling techniques, and inflation-driven costs of inputs such as fertilizers. To mitigate such costs in a high-inflation environment, the company is actively identifying cost-saving initiatives.

In addition to its first-quarter performance, Rubicon is focusing on certain key areas for the remainder of 2023:

  • Optimizing yield and cultivation at its Delta Facility.
  • Maximizing Canadian premium opportunity.
  • Driving efficiency in processes and systems.

The strategic pathway is meant to drive further growth in net revenue and gross profit, improve operating leverage, and ensure positive cashflow for the year. Rubicon said on Tuesday that is also evaluating options to beef capacity to meet demand this year.

“With our diverse portfolio of consistent, high-quality products, Rubicon is well-prepared to meet the rising demand in this segment,” Brodie said. (Full Story)

In categories:Business International
Tags:
Next Post

Fewer research analysts covering cannabis underscores industry woes

Cannabis industry earnings calls have been a little quieter this year. Fewer research analysts are covering the U.S. marijuana industry, which experts say reflects the challenging economic headwinds facing the industry, including high taxes, high interest rates, rock-bottom stock prices…
Read
Previous Post

Acreage Holdings Revenue Slips Slightly With High Hopes For Connecticut

Long after the markets closed on Monday, Acreage Holdings, Inc. (OTCQX: ACRHF, ACRDF) reported its financial results for the first quarter ended March 31, 2023. Revenue fell 1.6% from last year to $55 million. Sales fell sequentially by 2.7% from the fourth…
Read
Random Post

Ed Sherran on Getting High with Snoop Dogg, Russell Crowe and, Inadvertently, Burna Boy

Ed Sherran shares a few good backstage smoking stories on the latest episode the Conan O'Brien Needs a Friend podcast. The British pop singer, who's not much of a toker, dishes on his favorite celebrity stoners. His attitude is "when in Rome..."…
Read
Random Post

The Best Washington DC Dispensaries Open Right Now

As our nation’s capital, it follows naturally that Washington, DC is an exemplar in democratic processes. And this has applied to the District’s stance on recreational marijuana. Back in January of 2014, a poll found that eight out of 10 local residents…
Read
Random Post

Adult use cannabis sales expanding across New York State

With the legal marijuana business in New York ramping up, vendors and regulators alike are working overtime to prepare for what the state hopes will be an important new industry. At this Capital Region networking forum hosted non-profit NY Small…
Read
Random Post

Connecticut Latest in String of States to Enact 280E Relief

Cannabis companies will be able to deduct business expenses at the state level. Connecticut on Tuesday became the latest in a national trend of states with operational marijuana markets to approve state-level relief from the 280E provision of the federal tax code.…
Read