The company said it will continue investing in Germany, which now accounts for 24% of all company revenue.
IM Cannabis Corp. (NASDAQ: IMCC) (CSE: IMCC), which has headquarters in both Canada and Israel, on Wednesday reported a net loss of C$3.5 million for the second quarter of the year, down from its C$6 million loss in the first quarter and a C$3.7 million loss year-over-year.
While losses are down, revenue has surged for the company, up 12% year-over-year to C$14.8 million from C$13.2 million. Sales in Germany are up 129% to C$3.5 million since the country legalized personal possession of cannabis and nonprofit marijuana clubs in April, IMCC reported. With that new sales baseline, Germany now makes up 24% of all company revenue.
“The German market is not just poised to start delivering significant growth after the April 1 cannabis legalization, we can already see the impact the legalization has had on our German business. We were well positioned to take advantage of the growing market and delivered a 200% increase in sales in Q2,” CEO Oren Shuster said in a press release.
Shuster added that IM Cannabis will continue investing in the German market “to deliver further accelerated growth.”
CFO Uri Birenberg said that cannabis flower sales prices also increased 21% as a result of German legalization, to C$6.09 per gram. This happened while IMCC slashed operating costs during the second quarter by 29% to C$3.7 million, as the company searches for the right financial balance to achieve profitability.
Birenberg said the positive financial trends were also due to the company’s restructuring plan implemented last year.
“Conversely, we cleared old raw material and accrued for slow moving stock for total of about C$1.9 million which impacted our cost of sales, gross margin and gross profit,” Birenberg said.
IM Cannabis sold a total of 2,333 kilograms of dried marijuana flower in the second quarter, up from 2,128 kilograms in the second quarter a year ago.
As of June 30, IM Cannabis had C$40.2 million in total assets, including C$700,000 in cash, against C$34.7 million in total liabilities.
The company said it will continue investing in Germany, which now accounts for 24% of all company revenue. Read More