💸 High Impact

The Canadian LP You Have Never Heard Of

The What - MTL Cannabis Corp.(CSE:MTLC) has announced its Q4 and full-year 2024 financial results with revenue of $83.1M, up 165.7% from the previous year. Those are very large revenue numbers for a company that most people might not be familiar with. As a comparison, the company’s revenue would be about 25% of that of its Canadian competitor, Aurora Cannabis, which is widely known. 

Before we continue with their earnings, let’s take a detour to share some company background. The company is based in Montreal, Canada, and is focused on sustainable and advanced cultivation practices. It is also still focused on Canada’s medical market, which allows insurance reimbursement of medical cannabis. The company’s history is also linked to Canada House Cannabis, which it merged with last year. The company also has an international expansion plan with established exports already to established in Germany, Australia, Poland, Portugal, and the United Kingdom.

The company’s gross margin significantly improved from cost-cutting to reach 45.6%, an increase of 9.9% from the previous year. This gross margin level aligns it with other smaller US MSOs. Operating income surged by 486.7% to $4.6M, a dramatic turnaround from a loss of $1.2M in the prior year. Net and comprehensive income were $2.4M, marking a substantial recovery from a loss of $2.2M the previous year.  The company is one of the cannabis companies that are fully profitable after all taxes and costs are paid.

The company’s adjusted EBITDA reached $13.2M, up 122.2% from the prior year. This growth reflects enhanced operational efficiencies and the company’s ability to scale its business effectively. The company also reported positive cash flows from operations, with net cash inflows of $13.8M, a significant improvement compared to a net outflow of $0.7M the previous year.

This is where the story takes a twist. Although the current market capitalization is only $9.14M, the one-year cash flow and adjusted EBITDA are higher than its market capitalization! It is rare to find a company trading at its one-year cash flow! Like many Cannabis companies, the chart below shows how the stock has been affected over time.

The Why - Management is reinvesting the cash flow into the business to produce future earnings. Investment activities saw a net cash outflow of $2.2M, primarily reflecting the capital expenditure on facility upgrades and expansion projects. Key business reinvestments included the completion of retrofits at MTL’s facilities in Montréal, Louiseville, and Pickering. These upgrades have expanded the company’s consolidated cultivation capacity by 6,500 kg annually, bringing the total estimated cultivation capacity to 19,500 kg annually. 

Consumers are also becoming big fans; the MTL cannabis brand received significant recognition within the Canadian recreational cannabis market, winning Brand of the Year at the 2024 Grow Up Conference. Additionally, Canadian budtenders named it the #1 recommended brand in a survey conducted by the Brightfield Group and O2O. 

Big Takeaway

It’s rare that we see a cannabis company that has apparently been operating for years come out of left field and report an annual run rate of almost nine figures. I almost feel as if we have been doing a disservice to our audience by not being up to speed on this name, but here we are.

This company is apparently doing everything right in terms of growth metrics, and the YoY numbers are quite impressive, to say the least. That, paired with the fact that their mission is to be known as a craft cannabis company versus a multi-million square foot behemoth that just stamps out product, makes me want to dive in even more.

This is a Canadian LP that will be on my radar moving forward, and we have reached out to management to get them on the podcast to take a deeper dive into the business and bring you the scoop.

📈 Dog Walkers

Virginia Cracking Down On Hemp

As of this week, the state of Virginia has been cracking down on shops that are selling intoxicating hemp products that go against the ban they put into place last year. The ban focused on Delta-8 and most synthetic cannabinoids that lack transparency and safety standards to keep them from getting into the hands of consumers.

The group’s study of the state hemp enforcement found:

• 346 out of 424 businesses inspected were in violation of the sales ban.

• 17,715 violations were recorded.

• Civil penalties totaling $10,772,250 were issued.

• Just $433,262 of those fines have thus far been collected, but many initial fines are heavily reduced if paid on time.

Original source: GMR

High Tide Expands

High Tide (Nasdaq: HITI) announced that they will open four new Canna Cabana stores in Alberta as of tomorrow, bringing the grand total to 180 stores in Canada. The leading cannabis retailer in Canada continues to expand its footprint and assert its dominance in the Canadian market with its flagship Canna Cabana brand.

Press Release

Florida Doing Florida Things

We had some very interesting data come out of Florida yesterday showing that Donald Trump and Rick Scott are leading the polls over their Democratic candidates. However, the two Amendments on the ballot that align more with the principles of their opponents are polling high as well. At first glance, this could easily give you a head fake. Amendment 3 is pacing nicely towards the end goal of breaching the 60% threshold come election day and granting the state of Florida adult use cannabis. All eyes will be on Amendment 3 for the next 98 days leading up to the election, and we expect these numbers to move as we get closer to election day.

🗞️ The News

Boris Jordan On Rescheduling Updates

Tilray Reports FY Record 26% Revenue Growth

MTL Cannabis Reports Record 2024 Financial Results with $83.1M Revenue

Trump Claims Harris Jailed ‘Thousands And Thousands Of Black People’ Over Marijuana, But Her Actual Record As A Prosecutor Is More Nuanced

CBD Lotion Tied To Reduced Skin Damage From UV Rays, New Study Finds

Sustainable cannabis cultivation methods boost efficiency and the bottom line

📭 Research

Initiating Coverage: Green Thumb Industries - Download Here

Reconfirming Buy Rating: MariMed - Download Here

Initiating Coverage Of Verano Holdings Corp. - Download Here

Initiating Coverage: TerrAscend - Download Here

📺 YouTube

Tilray CEO Irwin Simon Explains Net Revenue Growth I Trade To Black

What we covered:

✅ Tilray Brands (NASDAQ: TLRY) CEO, Irwin Simon, will be joined us to discuss their latest earnings, including the Q4 2024 results and the full fiscal results for 2024. He will shed light on the reasons behind the 26% increase in net revenue for the year and why the company remains as one of the most talked about cannabis stocks in the industry.

One of the main contributors to Tilray Brands' growth over the past year was the result of their beverage alcohol acquisition from Anheuser-Busch, which experienced remarkable growth, with net revenue soaring by 113% to $202 million.

We will also dive into the topic of hemp-derived products and discuss whether that's an opportunity the company is considering as they head into 2025.

Key Takeaways from the Results:

- Strong revenue growth in Q4 2024

- Increase in net revenue for the full fiscal year 2024

- Strategic initiatives driving profitability

- Market positioning and growth strategies in the cannabis industry

Video: https://www.youtube.com/watch?v=sYdsWltnRP8