GOOD SHROOM REPORTS ITS Q2 FY-2024 FINANCIAL RESULTS
MONTREAL, March 27, 2024 /CNW/ - The Good Shroom Co Inc. (the "Company" or "MUSH") (TSXV: MUSH), an emerging player in the Canadian cannabis industry which owns and operates a portfolio of brands that include cannabis products and wellness beverages, announces its financial results for the quarter ended January 31, 2024. Readers are encouraged to review the financial statements and the accompanying Management's Discussion and Analysis available at www.sedar.com.
FINANCIAL HIGHLIGHTS
Q2-2024 |
Q2-2023 |
Q2-2022 |
|
Revenue |
$1,126,473 |
$888,765 |
$363,229 |
Net Profit (Loss) |
$56,017 |
($95,116) |
($244,373) |
- The Company achieved gross revenue of $1,126,473, marking a 1.27 times increase over the prior year's quarter.
- A gross profit of $332,696.86 was recorded, representing a significant rise from Q2 2023's $182,241.94.
- Notably, the Company achieved a net profit of $56,017.38, marking a turnaround from the net loss of ($95,116) in the same quarter last fiscal year.
- Cannabis products accounted for 96% of revenue, underscoring the Company's strategic focus on this segment, with wellness beverage sales of $43,544 compared to $36,549 in the corresponding quarter last year.
- Profitability achieved in Q3-2023, continued through Q2-2024.
- As of January 31, 2024, the Company maintained satisfactory working capital of $610,942 and carried no long-term debt obligations.
- Importantly, the Company has no outstanding excise taxes owed, demonstrating its commitment to fiscal responsibility.
The Company faced unforeseen supply issues related to cannabis quality resulting in the temporary unavailability of two key products for three consecutive weeks, leading to a revenue shortfall vis à vis its internal sales forecast. Despite this challenge, the Company's resilience and proactive measures mitigated the impact, with the products swiftly made available for sale within three weeks. Management was content with the response time as it confirmed that its operational structure provides resilience against significant revenue shocks.
Furthermore, the Company experiences a bi-annual phenomenon coinciding with each product launch cycle. As new products are introduced to the market, consumer interest naturally gravitates towards these latest offerings, temporarily dampening sales of existing products as customers eagerly embrace what's new. This dynamic often results in a dip in sales during the initial month of a product launch cycle. However, historical data indicates that sales typically rebound to normal levels for certain products once the initial excitement subsides and customers return to their preferred choices.
In an industry fraught with fiscal challenges, The Good Shroom Co Inc. distinguishes itself by upholding its commitment to financial integrity. Recent reports by MJBIZ* have shed light on the concerning trend of Canadian LPs deferring excise tax payments, with a significant number of delinquent LPs owing substantial amounts. The Company, however, stands out as it remains up to date, having paid all excise taxes in full and on time. It is disconcerting that the government's leniency towards non-compliant companies in providing payment plans for excise owed, which has led to an uneven playing field, disadvantages compliant entities like ours. The Canada Revenue Agency is not a bank and thus should not be providing payment plans for deliquint LP's to compete with compliant ones. Nonetheless, our prudent management practices have enabled us to maintain profitability amidst an industry landscape marred by heavy losses and uncertainties.
"We are excited about the future prospects, particularly in light of today's positive financial results. Our strategic approach, underscored by a focus on one market at a time expansion and product innovation, continues to yield promising outcomes," stated Eric Ronsse, Chief Executive Officer. He continued, "With the recent acceptance of new products to Quebec, we anticipate significant growth opportunities in this key market. The upcoming launches scheduled for the end of April, marking the end of Q3, and early May, the beginning of Q4, are poised to further solidify our position in Quebec. Quebec's cannabis market size exceeding $600 million annually and expected growth signify ample opportunities for market share expansion. We are well-positioned to capitalize on this potential, inch by inch, with our upcoming launches and into the future. Moreover, our ongoing progress in Alberta, coupled with forthcoming innovations, reinforces our commitment to gaining market share and driving sustained growth. Additionally, we are happy to announce the launch of edible products in PEI, slated for release sometime in the summer. These strategic initiatives reflect our unwavering dedication to value creation for our stakeholders and our relentless pursuit of market leadership."
* https://mjbizdaily.com/canada-finance-minister-warned-about-cannabis-industry-financial-distress/
MUSH operates a portfolio of brands which include traditional cannabis and wellness beverage products.
website: thegoodshroom.co
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains statements which constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Corporation with respect to future business activities and sales. Forward-looking statements are often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions. Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect the Corporation's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Corporation believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements. Among the key factors that could cause actual results to differ materially from those projected are the following: market acceptance of the Company's hash and other cannabis products, changes in the vendor's business or strategy, changes in our supplier's operations and pricing, expectations regarding competition and their pricing strategy; maintaining in good standing all necessary regulatory licenses and authorizations for its products; the benefits, safety, efficacy, dosing and social acceptance of cannabis related products and no material changes in the legal environment; supply chain disruptions and shortages. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. The Company does not intend, and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law. Trading in the securities of the Company should be considered highly speculative.
SOURCE The Good Shroom Co Inc.
The Good Shroom Co Inc., Eric Ronsse, President, [email protected]
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