Adam Jackson
Oregon-based craft cannabis company Grown Rogue International Inc. (CSE: GRIN) (OTC: GRUSF) posted relatively robust fiscal second quarter results ending April 30, 2023, showing successful progression of its business strategies in its key states.
The company reported a significant 28% increase in revenue, reaching $6 million for the three months ending April 30, 2023. The growth represents a substantial hike from the $4.7 million recorded in the same quarter of 2022. Net income totaled nearly $412,000, which is higher than the $145,000 net income in the same period last year.
Grown Rogue also showed some strength in its cash flow performance. Before changes in working capital, the company’s operating cash flow spiked by 62%, from $1.1 million in the second quarter of 2022 to $1.7 million for the second quarter in 2023. Meanwhile, free cash flow, following $700,000 in investments in working capital and capital expenditures, totaled $1 million. The company ended the quarter with $3.8 million of cash on hand.
According to CEO Obie Strickler, the strategic partnership with Goodness Growth Holdings (OTC: GDNSF), aimed at enhancing the quality and efficiency of the latter’s operations in Minnesota and Maryland, also contributed additional revenue during the second quarter.
“In Q2, we recorded over $270k in revenue from this agreement, which was more than anticipated as the agreement was not definitive until after the quarter ended,” Strickler said in a statement Tuesday.
Looking forward, the company said it is preparing to launch new proprietary genetics combined with strain-specific packaging in Michigan and craft pre-rolls in Oregon. These new developments, Strickler suggested, are intended to deepen the company’s relationship with its existing customers and attract a new consumer base.
In Oregon, Grown Rogue said it held the top spot as the #1 flower brand for the eighth consecutive quarter according to LeafLink’s MarketScape data. Additionally, despite an overall 8% decrease in the state’s indoor wet weight harvested, Grown Rogue reported a 15% increase year over year. The company is focused on expanding its market share in the third quarter of 2023 through the launch of craft pre-roll products.
In Michigan, the company, operating through Golden Harvests, reported a steady rise in pricing per ounce of flower for the past four months, according to the Michigan Cannabis Regulatory Agency. To maintain the positive trend, the company is planning to launch strain-specific packaging in the third quarter of 2023, which is expected to improve both pricing and product mix.
“I want to thank the entire Grown Rogue team for their continued efforts and look forward to updating shareholders on our new market efforts in due course,” Strickler said.
Although during the six months ending April 30, 2023, Grown Rogue generated net income of approximately $1.0 million, it has historically incurred net losses, and as of that date, the company’s accumulated deficit was approximately $19.1 million. It is still reporting as a going concern.
