Cannabis Cultivation Exit To Revenue Crash: The Story Behind Lowell Farms' Q2 Loss

Author: Nicolás Jose Rodriguez | August 14, 2024 09:53am

Lowell Farms Inc. (OTC:LOWLF) reported its unaudited financial results for the second quarter of 2024, revealing significant challenges in revenue and profitability. CEO Mark Ainsworth said the company is focused on strategic alternatives to optimize assets, reduce overhead 

and strengthen its financial position.

A Decrease In Bulk Product Revenue

The company recorded a net loss of $0.8 million, an improvement from the $2.9 million loss in the first quarter of 2024, but a steep decline compared to the $0.1 million loss in Q2 2023.

Revenue for the quarter dropped sharply by 50% year-over-year to $3.5 million, down from $7.0 million in the same quarter last year and a 27% decline from Q1 2024.

The company reported this downturn was primarily driven by a substantial decrease in bulk product revenue, which fell to $0.5 million following the company’s exit from its cultivation facility in January 2024.

Gross profit remained in the red, with a gross loss of $0.6 million, yielding a negative gross margin of 15.7%.

Gross Margin

Despite these losses, the company saw a slight improvement in gross margin compared to the first quarter's negative 17.0%, reflecting some stabilization after exiting cultivation.

Adjusted EBITDA for Q2 2024 was negative $1.9 million, a further decline from negative $1.3 million in Q2 2023 and negative $1.1 million in Q1 2024.

Read Next: MediPharm Q2 Loss Narrows, Adjusted EBITDA Climbs As Gross Profit Improves Nearly 300% YoY

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Posted In: LOWLF