Staff
Canadian-based CannaRoyalty (CNNRF) reported its second-quarter earnings for the period ending June 30, 2018, with revenues increasing 266% to C$3.5 million versus last year’s revenues of C$960,157. In addition to that, CannaRoyalty made huge strides by delivering net income of C$9.3 million for the quarter versus last year’s net loss of C$2 million. The net income per diluted share was $0.17 as compared to a net loss per diluted share of $0.05 for the same time period in 2017.
“Q2 marked a turning point for CannaRoyalty and its shareholders as the team translated strategy and execution into record financial performance. The Company generated earnings per share of $0.18 primarily by delivering on its stated objective of rationalizing early passive investments. The Company also generated a record adjusted EBITDA result for a Canadian-listed cannabis company2,” said Marc Lustig , CEO of CannaRoyalty. “Q2 is the beginning of a multi-quarter parabolic step change in revenue, powered by sequential acquisitions and organic growth. CannaRoyalty generated a record $3.5 million in revenue this quarter, a 446% increase from Q1 and more than the Company generated in all of 2017.”
Gross margins increased 95% to C$820,935 over last year’s C$421,681 for the same time period. Operating expenses rose 129% to C$6.3 million versus last year’s C$2.7 million.
Since The Quarter Closed
Following the close of the second quarter, CannaRoyalty acquired FloraCal Farms for $1 million and 35,088 CannaRoyalty Class A Compressed Shares, as well as up to an additional US$3 million in cash and 35,088 Compressed Shares to be paid over 3 years. The company also acquired a licensed distribution and manufacturing facility, RVR Distribution, in the city of Cotati in Sonoma County, California for $2.4 million to support its push into the California market.
July continued to be a busy month for the company as it then purchased the exclusive rights to distribute and manufacture California’s infused pre-roll company Pacific Remedy. In August, CannaRoyalty also closed on its deal to sell its pre-roll technology to Aurora (ACBFF) for C$7 million in Aurora common shares.
Lustig added, “These results reflect the successful initiation of the company’s strategic focus on building its Californian distribution and brands platform. This growth is expected to continue in Q3 and Q4 as FloraCal and RVR are added to the Company’s financials and as our team continues to grow market share and expand the Company’s supporting manufacturing and value-add services footprint. Both RVR and FloraCal are performing above expectations, and we are actively executing our plans to increase the revenue generating capacity of both companies.”
Financial Moves
CannaRoyalty reaped the benefits of its stake in Anandia Inc., which was acquired by Aurora and was valued at approximately C$115 million in common shares and warrants of Aurora. CannaRoyalty’s equity stake in Anandia was reported at approximately $26.4 million as of June 30, 2018.
On July 12, 2018, CannaRoyalty announced that it had closed a fully marketed private placement of unsecured convertible debentures raising aggregate gross proceeds of $ 32,980,000.
Stock Performance
The stock was lately trading at $4.00 on the OTC Markets, not too far from the company’s year high of $4.58.
