Adam Jackson
Toronto-based IM Cannabis Corp. (Nasdaq: IMCC) (CSE: IMCC), an international medical cannabis company, revealed encouraging results in its earnings report ending March 31.
The company posted a 46% rise in gross profit over the year, largely attributed to a decisive shift in the company’s strategic focus. Additionally, operating expenses were notably reduced by 42% over the same period.
IM Cannabis’ new operational strategy seems to be paying off, as the net loss from the previous year has been entirely eliminated.
The company’s revenue remained stable, recording a modest 1% year-over-year increase to C$13.2 million.
“In 2022, IMC reworked its strategy,” CEO Oren Shuster said in a statement. “We shifted our focus to meeting patients’ and pharmacies’ needs. During Q1 of this year, we have continued this transition. IMC is becoming a lean and agile company, with a clear focus on building brands that consumers love, driven by consumer insight.”
During the first quarter, IMC continued its restructuring initiatives, reducing its workforce in Israel by 21% across all functions. The move, which is expected to yield annualized cost savings of C$3.6 million from mid-2023, maintains current revenue levels.
Additionally, the company raised approximately US$3.5 million via a non-brokered private placement offering, issuing over 2.8 million units at US$1.25 each.
IMC sold around 1,842 kilograms of total dried flower at an average price of C$6.59 per gram during the first quarter; during the same period a year ago, the company sold 1,415 kilograms at a higher average price of C$8.13 per gram. The decrease in average price is attributed to increased competition within the retail segment.
The gross profit for first quarter came in at C$3.5 million, a 46% increase from the C$2.4 million in Q1 2022. This improvement is largely due to higher-margin sales of premium imported cannabis products and cost reduction.
Operating expenses for the first quarter amounted to C$6.5 million, down 41% from C$11.3 million in Q1 2022. The reduction is mostly attributed to restructuring that took place during the period.
