Is the state of Nevada about to head down the same path as California for the cannabis industry? 1933 Industries (CSE: TGIF) suggested as much this morning when they reported their Q1 2022 financing results, wherein they indicated their declining sales is a result of “low-priced flower flooding the market.”
The firm this morning reported Q1 revenues of $2.5 million, down from $2.7 million in the year-ago period, and down marginally from the $2.5 million reported in the fourth quarter of 2021. The poor results were also blamed on “poor employment patterns in Nevada, a resurgence of COVID-19, [..] social distancing and mask mandates, and [..] low-priced flower flooding the market,” – effectively, the company looked to blame the poor results on anything that would stick.
The impact however, is that the firm has adjusted its pricing strategy to meet market demands (read: they lowered their prices), while also trying to achieve profitability through cost cutting and increased yields.
In terms of gross margins, to the company’s credit, they managed to post gross margins of $1.1 million, an improvement from $0.7 million in the year ago period, and the negative $0.1 million in the prior quarter.
The firm also managed to lower expenses to $1.9 million from $2.1 million in the prior quarter, and $3.5 million in the year ago period. This however was not enough, as the company posted a net loss of $1.0 million for the three month period, while adjusted EBITDA was a loss at $0.3 million.
The firms cash position meanwhile declined from $4.4 million to $3.2 million.
1933 Industries last traded at $0.045 on the CSE.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
