British Columbia-based cannabis producer Rubicon Organics Inc. (CVE: ROMJ) (OTCMKTS: ROMJF) saw both revenue and market share decline during the first quarter.
On Tuesday, the company reported its financial results for the three months ended March 31, posting $5.2 million in net revenue — a 23.5 per cent decrease compared to $6.8 million in revenue during the previous quarter.
Rubicon’s national market share of premium flower and pre-rolls also dropped to 7.1 per cent during the first quarter from 7.6 per cent during Q4 2021.
The company’s adjusted EBITDA loss was $1.52 million compared to a loss of $570,480 during the previous quarter.
However, Rubicon’s gross profit was $2.49 million, a 63 per cent increase from $1.53 million in Q4 2021.
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Alberta, British Columbia, Ontario and Quebec drive the majority of Rubicon’s sales, accounting for 97 per cent of total sales.
The company expects the cannabis sector to experience significant volatility in 2022 due to an increase in retail store openings, provincial mandates, and increased competition.
“Notwithstanding this volatility, with our current trajectory of increased supply we expect to able to sell everything we cultivate to either domestic or international market demand during 2022,” the company said.
The company posted loss from operations of $1.3 million during the first quarter, down from $1.6 million in the previous quarter.
Cash and cash equivalents were $8.75 million compared to $11.58 million in Q1 2021.
Cultivation process improvements and a company-wide restructuring that occurred in the second quarter of 2021 helped Rubicon decreased its production costs by 9 per cent from the same time period last year.
During the remainder of 2022, Rubicon is focused on increasing yield and quality, improving product mix to optimize margin, and launching international products.
“Rubicon Organics is at a turning point in 2022, with higher yields and increased quality coming from our Delta facility, whilst remaining cost-conscious we are driving to being profitable in 2022,” Rubicon CEO Jesse McConnell said in a statement.
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“I am excited to introduce our premium brands and products to international medical cannabis markets. I am also pleased to reiterate our guidance of achieving positive adjusted EBITDA and operating cashflow in the second half of 2022.”
Company stock was down more than 4 per cent Tuesday, dropping to $0.90 on the Canadian Venture Exchange.