BZAM Ltd. Reports Strong Q1 2023 Results, Achieving Record Revenues and Expanding Market Share

LOS ANGELES– BZAM Ltd a Canadian cannabis producer, has released its financial and operating results for the first quarter of 2023, reporting impressive growth and positive developments. The company’s Q1 2023 highlights include achieving record quarterly gross revenues of $35.0 million, marking a significant 41% increase compared to the previous quarter. Additionally, BZAM achieved record quarterly net revenues of $24.1 million, representing a 40% increase quarter-over-quarter.

With these outstanding results, BZAM expanded its market share and is now ranked as the 6th largest producer in Canada, according to Hifyre, a renowned industry data provider. Furthermore, the company successfully reduced its adjusted selling, general, and administrative expenses (SG&A) to 43% of sales, down from 59% in the previous quarter.

Matt Milich, CEO of BZAM, expressed his satisfaction with the Q1 2023 performance, attributing the strong net revenue growth to the impact of the November merger and organic sales growth. Milich highlighted the company’s ongoing efforts to improve margins and reduce SG&A through measures such as headcount rationalization and cost-saving initiatives, which are expected to generate approximately $2.5 million in annual savings.

Looking ahead, BZAM anticipates a robust second half of the year, driven by the launch of over 20 new products across Canada in the next six months. The company’s export market endeavors have also gained momentum, as it recently obtained its EU GMP certification, enabling it to execute distribution agreements in Germany and the UK. BZAM expects branded products to enter the UK market by the fourth quarter of this year.

In terms of financial highlights for Q1 2023, BZAM experienced substantial growth in gross and net revenues. Gross revenue reached $34.97 million, a 41% increase compared to Q4 2022, while net revenue amounted to $24.1 million, reflecting a 40% quarter-over-quarter increase. The company successfully reduced its adjusted SG&A to 43% of net revenue, down from 59% in the previous quarter. Additionally, BZAM reported an adjusted EBITDA of ($3.9 million), an improvement from ($6.8 million) in Q4 2022.

The increase in gross revenue was primarily driven by the company’s expanded brand and product portfolio resulting from the November merger, as well as organic sales growth and increased demand for products under the TGOD and Highly Dutch brands. BZAM’s gross profit saw a significant boost, rising by 141% quarter-over-quarter due to increased revenue, improved cost absorption, and reduced inventory provisions.

BZAM’s focus remains on enhancing operating cash conversion through streamlined operations, cost containment initiatives, and the implementation of automation. The company expects to continue increasing its revenue, improving margins, and generating positive cash flow as a result of the synergistic impacts of the November merger.

During the first quarter, BZAM achieved notable operational milestones. The company expanded its recreational market share to 5.2% in March 2023, up from 2.0% in March 2022, according to Hifyre data. BZAM also made progress in its facility optimization strategy, transitioning Wyld production to the Pitt Meadows Facility and preparing for the sale of the Puslinch Facility within the next 12 months. Additionally, negotiations with potential buyers for the Maple Ridge Facility are underway, with expected gross proceeds of $3 to $4 million from the sale.

BZAM’s subsidiary, The Green Organic Dutchman Ltd., recently obtained EU-GMP certification for its Ancaster facility in Ontario. This certification allows the company to export certain medicinal cannabis products to various global markets and execute on existing strategic distribution agreements