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DELTA 9 CANNABIS INC. (OTCQX:DLTNF) (TSX:DN) released financial results for the three-month and nine-month period ending September 30, 2022, revealing net revenue of CA$15.7 million ($11.8 million) for the Q3 2022, an increase of 3%, from CA$15.2 million for the same quarter last year.
Q3 2022 Financial Highlights
Gross profit of CA$1.9 million for the third quarter of 2022, versus CA$4.8 million for the same quarter last year.
Net loss from operations of CA$6.2 million for the third quarter of 2022 versus a net loss from operations of CA$55,031 for the same quarter last year.
Adjusted EBITDA loss of CA$1.7 million for the third quarter of 2022 versus an adjusted EBITDA gain of CA$191,056 for the same quarter last year.
Other Highlights
The company received a Cannabis Distributor License from the Liquor Gaming and Cannabis Authority of Manitoba. Under the license, Delta 9 is authorized to acquire, store, sell and deliver cannabis in accordance with The Liquor, Gaming and Cannabis Control Act. The company’s distribution services will allow out-of-province suppliers to improve logistics efficiencies and reduce shipping costs into the Manitoba market and will provide Delta 9 with additional diversified revenue streams.
The company purchased Garden Variety’s three branded retail cannabis stores located in Manitoba for CA$3.25 million in common shares of Delta 9. The company expects the transaction to be accretive in 2022 and 2023 before synergies. The acquisition represents an attractive revenue multiple of approximately 0.41x annualized revenue.
Delta 9 announced the cash repayment of its unsecured 8.5% convertible debentures issued in July. The CA$11.8 million cash repayment represents a full payout of the convertible debentures. The convertible debentures were previously traded on the Toronto Stock Exchange under the trading symbol “DN.DB”. The company met the pre-disbursement conditions required to draw-down CA$11.8 million under its credit facility with ConnectFirst Credit Union and concurrently made the cash repayment of the convertible debentures. The company's CA$11.8 million draw-down from its credit facility is subject to a 60-month term at a fixed rate of 4.55% per annum, amortized over 144 months.
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Photo by Esteban Lopez on Unsplash
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