Adam Jackson
C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) reported its financials for the period ending July 31. The company logged a revenue of $7.2 million, mirroring its performance from the prior year. This comes even as the broader Nevada cannabis market saw a 5% drop in sales.
“We are pleased to report strong cash flow generation and stable revenues again this quarter given the industry headwinds persisting in the first half of the year,” said C21’s CEO and president, Sonny Newman said in a statement.
The quarter ended with a reported net loss of $400,000. Still, the firm’s cash holdings amounted to $2.3 million by the end of the period, a rise from the preceding quarter. The company said that its total liabilities shrunk by $1.5 million since the beginning of the year.
“Having now retired the balance owing on our senior secured note, we are actively pursuing expansion of our retail footprint in Nevada. We believe this will maximize margins from our cultivation assets.”
The loan Newman referred to was a remaining $1 million on a senior secured note that the company settled during the period.
Improving Cash Flow
C21’s gross margin climbed to 40% this quarter, indicating a positive trend sequentially. Cash flow from core business operations came in at $1.6 million, marking a 37% surge from the first quarter. The results underscore the firm’s 17th straight quarter of yielding positive cash flow, it said.
While C21’s quarterly revenue remained steady, it notably outstripped broader Nevada market trends. The firm’s direct sales to consumers saw a boost, counterbalancing reduced sales to other businesses. Profit margins have been on an upward trajectory, although they continue to face external pressures.
Nevada Pumps Brakes
Newman noted the first uptick in sales in existing locations since 2021 and conveyed the company’s aspirations to expand its presence in Nevada.
Following the end of the quarter, C21 announced the appointment of Aron Swan as its Chief Operating Officer, positioning the firm for further growth. The company also unveiled a drive-through feature at its flagship cannabis outlet in Sparks, launching operations ahead of initial projections.
