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News

Decibel Reports 400% Dried Flower Market Growth And Expansion To UK, Australia, Israel And Germany

Author: Nina Zdinjak | September 10, 2024 07:50am

Canadian cannabis brand Decibel Cannabis Company Inc. (TSXV:DB) (OTCQB:DBCCF) announced Monday that its flower strategy has exceeded its expectations. The Calgary-headquartered marijuana operator also provided a corporate update.

This July, the company announced a refocus on its dried flower consumer, along with a reorganization of its processing across various facilities. The preliminary results of these initiatives indicate a positive trend and although these efforts are still in their early stages, the company anticipates the successful reception will continue.

"We are excited by the overwhelmingly positive feedback we have received from Provincial boards, retailers, budtenders and consumers of our reposition of QWEST dried flower and pre-roll products," stated CRO Adam Coates. "We are delivering on the promise to provide great quality product at an exceptional value to the flower consumer in Canada. Equally important, as demand is outpacing our current supply, we have established a plan to allow us to satisfy the great demand for our product in Canada while meeting the needs of our international partners in Australia, Israel, UK and Germany."

Decibel also applied for an extension to hold its annual shareholder meeting by December 31, 2024, with a court hearing scheduled for September 19. Additionally, the company announced the resignation of chief product development and marketing officer Warren Matzelle, effective September 6, 2024.

Domestic And International Flower Updates

Decibel's cannabis brand QWEST was re-launched in Alberta, BC & Ontario in July with the slogan "More Dank, Less Bank" aiming to attract flower consumers looking for quality cannabis flower at an affordable price. The launch campaign included a sampling program for budtenders and retailers, with 98% of respondents indicating they would recommend the flower product to their customers

Over the last four weeks, Decibel's retail market share in dried flower grew by more than 400% and the company initiated the development of a new product pipeline for 2025 to expand the QWEST brand.

In the United Kingdom, the company received its first purchase order and expects to ship its first order of QWEST branded dried flower products to the UK before the end of September.

In Australia, Decibel received an advanced purchase order through the end of 2024, with its next shipment expected before the end of September.

The company expects to ship its first order of dried flower to Israel in the coming week, and to Germany by the end of the year.

Zaunic's Analysis

In his recent analysis senior analyst Pablo Zuanic of Zuanic & Associates said Decibel's market valuation is compelling.

As Canada’s fourth-ranked player, Decibel holds a significant position in infused pre-rolls and vape products. However, in the second quarter of 2024, Decibel reported a 19% year-over-year drop in domestic recreational sales, totaling $22.1 million, in a slightly declining market. This performance marked the second consecutive quarter of year-over-year sales decline, largely due to losing market share in the infused pre-roll and vape segments.

"Recent shifts in product strategy and management’s focus on operational efficiencies are aimed at achieving a free cash flow run rate of $10 million per annum and reducing debt by about $6 million over the next two years," reveals a recent recap of Zuanic’s analysis by Benzinga’s Nicolás Jose Rodriguez.

According to the analyst, the company's valuation presents an attractive entry point for investors considering the company's new strategic moves and potential for market repositioning.

Price Action

Decibel shares closed Monday market session 4.83% lower at $0.049 per share.

Photo: Courtesy of iQoncept via Shutterstock

Posted In: DBCCF TSXV:DB

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