Calgary’s Decibel Cannabis Company Inc. (TSX-V: DB) (OTCQB: DBCCF) has expanded its global footprint by securing a three-year supply agreement with the United Kingdom’s medical cannabis distributor 4C Labs.
Decibel announced the agreement on Wednesday and will be providing 4C Labs with its Qwest cannabis and exclusive rights/strain exclusivity for certain rare cultivars that the U.K. company will be distributing to patients. The first shipment is expected to be making its way overseas by the end of the year and 4C Labs will be distributing the products in the Channel Islands as well.
“Not only will this unlock a strong partnership and a new market for Decibel’s craft cannabis products, it also sets the stage for further growth into other European markets,” said Adam Coates, Decibel’s Chief Revenue Officer.
Decibel currently operates three cultivation facilities: The Plant in Calgary, Alberta; The Qwest Estate in Creston, British Columbia; and Thunderchild Cultivation in Battleford, Saskatchewan — the company’s largest facility, spanning 80,000 square feet.
“Decibel’s innovative craft quality Qwest flower products will fill an empty segment in the U.K. market and bring a world-class B.C. cannabis product to U.K. patients,” said 4C Labs CEO Greg Dobbin.
Decibel had a 7.5 per cent Canadian market share at the end of Q2 this year, which the company says solidifies it as the second-largest licensed producer in the country. The company also reported record net revenue of $30.9 million at the end of June, representing a 66 per cent increase year-over-year (YoY).
Decibel attributes that financial success to growth in its Canadian recreational sales driven by the demand for infused products and vapes as well as the company’s recent launch of its “General Admission” edibles and Vox brand.
The company had record adjusted earnings before interest, taxes, depreciation and amortization of $7.3 million in Q2, an 8 per cent sequential increase and a 126 per cent rise YoY.
Decibel’s net losses also plummeted YoY that quarter by 399 per cent to $423,000. The company lost over $2.1 million in Q2 last year.
However, the company’s free cash flow decreased by 92.5 per cent YoY at the end of June to $458,000.
Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) is another Canadian cannabis company that recently secured its first distribution agreement in the U.K.
Decibel shares rose by 3 per cent Wednesday to $0.17 on the TSX Venture Exchange and have risen by 70 per cent since January 1.