John Schroyer
Canadian edibles maker Indiva Limited (TSX: NDVA) lost $1.7 million in the first quarter of 2023 despite slightly increasing revenues both sequentially and year-over-year, partly because the company had almost $700,000 to write off in older goods it was prohibited from selling due to an intervention by the federal Canadian government.
Specifically, the federal Canadian health agency, Health Canada, delivered Indiva an order in March to cease production and sale of its line of THC-infused lozenges because the products had been categorized as extracts instead of edibles.
But the company is still bullish on its future, and company leadership indicated a continuing focus on production automation and other cost-cutting measures that will help move it into the black.
“Looking forward, Indiva will continue to leverage its core strengths, low-cost production platform, and capability to launch and scale new products on a national basis, while leaning more heavily on in-house innovation of new products,” CEO Niel Marotta said in a press release. “Over time we expect our revenue mix to shift away from licensed products, as we continue to introduce new products.”
Among the highlights of the first quarter, for instance, was the implementation of “two key pieces of automation used in the processing and packaging” of its top-selling brands, Indiva reported.
“This is an important milestone for the company as it allows Indiva to scale innovation and continue to drive unit costs lower,” the company reported.
Indiva hit $6.9 million in revenues in Q1, up 6% from $6.5 million the same time frame a year prior but only up 1% from the final quarter of 2022. The increase was “driven primarily by new product introduction,” the company reported, and it projected that revenues should continue to improve through 2023.
However, Indiva warned, “there is a risk that net revenue may decline sequentially” if new products don’t offset the intervention by the Canadian government to cut off Indiva’s sales of its lozenges.
Citing data from Hifyre Inc., Indiva also reported it’s maintained its top slot in the Canadian marijuana edibles market, with 27% of market share in five of the country’s 10 provinces: Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan.
Also in the first quarter, Indiva began supplying Tilray Brands with four of its edibles product lines, and signed a deal with Valiant Distribution Cannabis to more widely get its products on dispensary shelves in Saskatchewan.
Then in April and May, Indiva continued expanding its product portfolio, with edibles deliveries into Alberta, the launch of three new Wana brand infused gummies, the introduction of a trio of new infused chocolate bars in Alberta, and has another 18 products awaiting approval.
Figures were converted from Canadian dollars to U.S. dollars at the current exchange rate.
