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LEEF Brands, Inc. (OTCQB:LEEEF) (CSE:LEEF) released its audited financial statements for the year ended 2022 along with the unaudited first quarter of 2023, revealing net revenue of $27 million in FY 2022, a decrease of 19% compared to $33.5 million in full year 2021.
FY 2022 Highlights
Gross profit of $9.6 million, an increase of 14% from full year 2021.
Gross margin of 35%, an increase of 10% from full year 2021.
Adjusted EBITDA of $($2.7 million)
Net loss and comprehensive loss of $28.9 million compared to a loss of $7.7 million in full year 2021.
Q1 2023 Highlights
Net revenue of $9.7 million increased 114% from Q4 2022 and 31% from Q1 2022
Gross profit of $3.5 million increased 96% from Q4 2022 and 15% from Q1 2022
Gross margin of 36% increased 1% from 2022 average
Adjusted EBITDA of $726,000
Net loss income and comprehensive loss of $1.5 million compared to income of $151,090 in Q1 2022.
Cash at the end of the period $3.9 million.
“Despite the overall difficult landscape of the California cannabis industry during 2022, our first quarter results demonstrate that LEEF's growth strategy is delivering positive results in a market that is recovering from many challenges,” stated Micah Anderson, CEO of LEEF. “With many of the larger MSO’s leaving the state, we remain optimistic about the future of the cannabis industry in California and are committed to maintaining our position as a leader in the market. I am proud of our team and how we have worked together to navigate the difficult landscape. The year 2022 was challenging for the entire cannabis industry. From an operations standpoint, I believe we have seen the bottom in pricing in California. According to the Department of Cannabis Control, 35% of testing labs, 19.4% of cultivators, 14.6% of distributors, 19.1% of manufacturers and 11% of retailers did not renew their licenses in 2023. As unfortunate as this is for some of our fellow colleagues, this will strengthen the supply and demand dynamics for operators in the California cannabis market.”
Management Changes
The company announced the appointment of Ben Slome to the board of directors as an independent director. Slome will fill the vacancy left by Kou’s resignation in March 2023. Slome has been an investor and operator in the cannabis business for the last seven years, having held multiple positions with Cookies and BellRock Brands (OTCEM:DXBRF) during that tenure.
In addition, the company issued 5 million common shares to satisfy the working capital adjustment payment required as part of The Leaf at 73740, LLC. transaction that closed on January 11th, 2023.
Price Action
LEEF shares were trading 28.30% lower at $0.019 per share at the time of writing Tuesday morning.
Photo: Benzinga edit with photos by Stefan Balaz on Shutterstock and Peter Pike on Pixabay
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