Cannabis Extractor LEEF Brands Sees Stronger Margins And EBITDA In Q1, CEO Explains Why

Author: Jelena Martinovic | April 18, 2024 09:24am

Vertical cannabis operator LEEF Brands, Inc. (CSE:LEEF) (OTC:LEEEF) announced the release of its audited financial statements for the year ended 2023 on Thursday along with interim financial statements for the first quarter of fiscal 2024.

"I am proud of the team and their performance in the past year and specifically in this quarter," said Micah Anderson, the company's CEO. "We've seen stronger margins and EBITDA in the first quarter of the year and believe Q1 results are the beginning signs of success stemming from the efforts to reduce redundancies after our merger with Icanic Brands."

In 2022, LEEF Brands merged with Icanic Brands Company in a $120 million deal, a move Anderson called the next stage of LEEF Brands' development.

Under his leadership, LEEF Brands has grown to a business led by an expert group of legacy operators with decades of experience in organic soil-based farming and sophisticated extraction practices. Moreover, it boasts developed distribution relationships with leading retailers nationwide.

On Thursday, LEEF also provided an update to its previously announced cultivation project, the Salisbury Canyon Ranch, a 1,900-acre property located in Santa Barbara County with a 187-acre Land Use Permit for cannabis cultivation.

"We have made substantial progress in relation to the construction of the farm," Anderson stated. "Our buildout is advancing steadily, and we are in close collaboration with county and state partners to ensure readiness for planting by late spring, targeting a fall harvest."

LEEF closed the acquisition of the Salisbury Canyon Ranch in 2023, which was a “monumental milestone,” according to Anderson as it will “enable us to fully execute our vision of building one of the largest biomass cultivation sites in California.”

Q4 2024 Financial Highlights

Net revenue totaled $7.9 million, representing an increase of 35% from the prior quarter.
Gross profit was $3.2 million, an increase of 26% from the fourth quarter of 2023.
Gross margin of 40.6%, representing an increase of 25% from full year 2023.
Net loss and comprehensive loss attributable to the company's shareholders was $1.5 million, up from $1.4 million in the previous period.
Adjusted EBITDA came in positive at $1.77 million, representing an increase of 347% from the fourth quarter of last year.

FY 2023 Financial Highlights

Net revenue was $30.5 million, representing an increase of 13% from the full year 2022.
Gross profit was $9.9 million, an increase of 4% from the full year 2022.
Adjusted EBITDA came in positive at $ 1.64 million, representing an increase of 162% from full year 2022.
As of March 31, 2024, the company had $44.4 million in total assets and $46.2 million in total liabilities compared to $43.8 million and $45 million, respectively, as of Dec. 31, 2023.