The CEO’s comments came as the cannabis company released its first quarter 2020 results that showed the company generated C$1 million in revenue from its premium cannabis strain BC Pink Kush.
The flagship strain was sold at an average price per gram of $6.93, positioning the product firmly in the top-class flower segment.
Flowr also revealed that demand for BC Pink Kush outstripped supply. The company sold 123 kilograms of the strain and did not have enough supply during the quarter. Product availability has “substantially improved” in the second quarter, according to a statement, and net revenues are projected to top C$2 million during the second-quater, Flowr told investors.
“(We) believe Q1 was the bottom for us in the Canadian recreational market and that we will see a step function change in our operating and financial results going forward,” CEO Tolia said in a statement.
The CEO highlighted the fact that Flowr’s flagship purpose-built indoor facility in Canada is finally fully operational and licensed, and it is producing only high quality and high THC strains from it.
Sales trends and demand for our BC Pink Kush strain remain “very encouraging,” according to Tolia. Over 500 kilograms of BC Pink Kush was harvested in April and May, and the company believes it will see a “continued substantial increase” in production and sales throughout the remainder of the year now that its Kelowna 1 facility is fully operational and producing primarily high THC strains.
Cash flow positive by H2 2020
Total net revenue during the first quarter ended March 31 came in at C$1 million compared to C$1.8 million in the same quarter a year ago. The company reported an adjusted EBITDA net loss of C$6.3 million compared to C$3.1 million in 1Q 2019.
“Our foundational thesis that growing high quality cannabis at scale is difficult and only a few companies are both focused and able to do so is playing out in our view,” Tolia told investors. “In Europe, we are extremely excited by our Partnership with Terrace Global after having recently joined a short list of companies with EU-GMP certification. We expect Holigen to contribute more meaningfully to our results beginning in 2021.”
Tolia added that the firm’s strongly-held belief in its strategic direction is reflected in a recent management-led financing that netted the company C$20 million.
Flowr said it plans to become "cash flow positive in H2 2020."
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