C21 defies Nevada cannabis slump with 14% sales jump, margin gains | How to order Skittles Moonrock online

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Vancouver-based C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) bucked state cannabis market trends with a 14% sequential revenue jump to $7.5 million in its fiscal second quarter, as its new south Reno location helped offset broader headwinds.

The retail segment generated $7.1 million in the second quarter, up 10% from $6.4 million in the year-ago period, driven largely by the new store that opened in June, according to financial results Thursday.

“We are beginning to realize efficiencies from scaling our operations as evidenced by the improved margins we reported in the second quarter,” CEO Sonny Newman said in a statement. “We intend to drive further growth and margin improvement in our existing operations going forward.”

Gross margin improved to 43.5% from 40% in the prior year quarter, while adjusted EBITDA rose to $1.3 million versus $943,000. However, higher operating costs and tax expenses led to a net loss of $845,132 versus a loss of $376,150 in the prior year period.

The south Reno dispensary, acquired from Deep Roots Harvest for $3.5 million, saw monthly sales ramp up from $273,000 in July to $416,000 in September, with October sales reaching $475,000. Meanwhile, wholesale revenue declined slightly to $410,000 from $450,000 year-over-year.

The company’s in-house brands, including Hood Oil cartridges, Phantom Farms pre-rolls and Silver State branded products, now make up more than 34% of dispensary sales. The company operates a 104,000 square foot facility with 37,000 square feet dedicated to cultivation, following a $3 million expansion in April 2022 that more than doubled capacity to 11,500 pounds of biomass annually. An additional 30,000 square feet of cultivation space could be built out to produce an extra 6,000 pounds of high-quality flower annually as retail footprint grows.

Total assets stood at $58.6 million at quarter end, while the company faced a working capital deficit of $8.9 million and accumulated deficit of $75.1 million. Cash position was $2.1 million, down from earlier levels due to $500,000 in income taxes paid and $1.1 million in inventory build-up.

The results encompass operations from the company’s three Nevada dispensaries, after discontinuing its Oregon operations.