logo-loader

Adastra Labs posts strong revenue growth in 3Q, thanks to ongoing cannabis processing relationship with CannMart

Published: 09:38 14 Dec 2020 EST

Adastra Labs Holdings Ltd -
The company ended the quarter with C$2.3 million in cash

Adastra Labs Holdings Ltd (CSE:XTRX) (FRA:D2EP), the cannabis processing and analytical testing services company, said it nearly doubled its quarter-over-quarter revenue in its third-quarter, thanks to its ongoing relationship with online store CannMart Inc. 

The company posted C$825,000 in revenue during 3Q, an increase of 190% compared to C$428,000 in the previous quarter, while its year-to-date revenue came in at nearly $1.3 million. 

Langley, British Columbia-based Adastra told shareholders that the revenue growth was thanks to its relationship with CannMart, as well as a biomass agreement with Pure Sunfarms that allows for a consistent supply of high-quality input material. The deal sees Adastra supplying standard processing services to CannMart Labs for cannabis extract and concentrate products over a period of 12 months.

READ: Adastra Labs to drive sales revenue through its cannabis processing agreement with Solargram

The company made “considerable progress” towards its first-year goal of revenue growth and product expansion, Adastra CFO Stephen Brohman said in a statement accompanying the results.

“We have seen a substantial increase to our revenues and revenue-generating opportunities, which has exceeded our expectations,” Brohman said. “With a strong finished goods inventory of over $750,000, we are well-positioned to incorporate these into client orders in 4Q.”

During the quarter, the company acquired a cryo-ethanol extraction system from Evolved Extraction Solutions, capable of processing 650 kilograms of cannabis or hemp biomass per day, producing winterized (dewaxed) cannabis or hemp oil. It also completed a non-brokered private placement to raise up to C$3.5 million.

CEO Andy Hale added that the company will continue to focus on contract manufacturing, third party processing and brand development throughout the rest of the year and into 2021.

“As we move forward into 2021, we will commission our hydrocarbon extraction capability for the production of underserved cannabis concentrate products such as shatter and live resin,” Hale told shareholders. “This along with our existing equipment will position Adastra as a leader in processing, SKU and brand development.”

The company ended the quarter with C$2.3 million in cash.

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

Novo Resources sees substantial upside potential at Nunyerry

Novo Resources Corp (TSX:NVO, OTCQX:NSRPF, ASX:NVO) co-chair and acting CEO Mike Spreadborough joins Jonathan Jackson in the Proactive studio to discuss promising gold outcomes from recent reanalysis of drill intercepts in a 2023 program at Nunyerry North in Western Australia. Using advanced...

6 hours, 52 minutes ago