Canadian cannabis retailer Nova Cannabis Inc. (TSX: NOVC) is celebrating a strong year of sales growth, as it completes its shift towards a low-cost consumer model.
On Monday, the firm released its results for the fourth quarter and fiscal year ended Dec. 31, with annual sales up 122 per cent to $134.4 million from $63.3 million in 2020.
But gross margin rose just 20 per cent to $24.9 million from $20.8 million.
After reporting $10.2 million in depreciation and $4.1 million in impairments, net loss for the year was $20.6 million.
In the fourth quarter, sales were up 23 per cent to $47.6 million from $38.7 million in the third quarter.
Over that period, Nova says its gross profit increased 29 per cent to $8.4 million from $6.5 million.
At the end of the year, the company had $10.5 million in cash.
Nova now has 78 stores across Alberta, Saskatchewan and Ontario, up from 44 at the end of 2020, and all of its legacy Nova-branded stores have now been converted to Value Buds locations.
Read more: Value Buds’ low-cost model spikes sales for Nova Cannabis
Read more: Sundial set to buy liquor and pot retailer Alcanna for $346M
“We launched Value Buds in 2021 to provide cannabis consumers in Canada with a better option, and the traction of our store format has been a resounding success,” CEO Darren Karasiuk said in a statement.
“Following Sundial’s pending acquisition of our majority shareholder, Alcanna, we will gain a cannabis-focused partner that is committed to supporting our value-based model with the infrastructure and financial resources to drive the expansion of our disruptive strategy at a much larger scale.”
In October, Sundial Growers Inc. (Nasdaq: SNDL) made a $346-million deal to buy all common shares of liquor and cannabis store giant Alcanna Inc., Nova’s majority shareholder. But in February, the companies agreed to extend the closing date to March 30 to complete required closing matters.
Last January, Alcanna spun off its cannabis retail operations and merged with YYS Corp. to create Nova.
Read more: Alcanna, YSS to target cannabis value segment with retail merger