- WeedMD (TSXV:WMD) has posted a 162 per cent increase in revenue for the 12-month period ending December 31, 2019
- Total annual revenue jumped from C$7.99 million in 2018 to $20.8 million last year
- While gross profit increased, gross profit margins fell from 40.7 per cent to 19.4 per cent
- The drop in margins was largely due to the company ramping up in cannabis production in 2019
- WeedMD (WMD) is currently down 14.75 per cent and is trading at 52 cents per share
WeedMD (TSXV:WMD) has posted a 162 per cent increase in revenue for the 12-month period ending December 31, 2019.
Headquartered in Aylmer, Ontario, WeedMD’s revenue increased from C$7.99 million in 2018 to $20.8 million last year. This was driven largely by sales to other licensed cannabis producers, as well as WeedMD’s provincial distribution channel for the adult-use market.
8.6 per cent of the total 2019 revenue amount, or approximately $1.8 million, came from consumer sales, while the other 91.4 per cent came from wholesale orders.
While gross profit jumped from $3.2 million in 2018 to $4 million in 2019, gross profit margins took a dive from 40.7 per cent to 19.4 per cent.
This was largely due to a significant ramp-up in cannabis production following the input of ten new cultivation rooms, as well as a decrease in selling prices brought on by the implementation of excise tax.
Over the 2019 period, WeedMD harvested a total of 17,988 kilograms, representing a 921 per cent increase compared to the year before, which saw a total harvest of 8,950 kilograms.
Angelo Tsebelis, CEO of WeedMD, said with the significant increase in production, 2019 was a year of planned investment coupled with a strategic focus the company’s brand and distribution channels.
“This solid year-over-year and quarter-over-quarter revenue growth is reflective of our strategy emphasizing customer-centric initiatives to drive direct-to-consumer sales and stronger margins and cash flow as we execute on our commercial plan,” he said.
The 2020 year has also seen a strong start for WeedMD, which posted a 329 per cent increase in revenue for the quarter ending March 31 compared to the same period last year.
In addition, the company successfully completed a milestone sale of its first outdoor-cultivated biomass, which was earmarked for extraction and international markets.
The sale agreement was signed in December 2019 and, following export certification, the product was shipped in January 2020 with the proceeds received later in the quarter.
WeedMD (WMD) is down 14.75 per cent and is trading at 52 cents per share at 3:37pm EDT.