Kelowna, British Columbia and Las Vegas, Nevada– Fiore Cannabis Ltd. (CSE: FIOR) (OTCQX: FIORF) , a licensed multi-state cannabis cultivator, producer and retailer, today announced its second quarter 2021 financial results, which support the Company’s turnaround efforts and its continued push for a U.S.-based growth strategy. Fiore’s Interim Financial Statements and corresponding Management’s Discussion and Analysis for the quarter ended June 30, 2021 are available on the Company’s SEDAR profile at www.sedar.com and the Company’s website at www.fiorecannabis.com.
“The second quarter of this year was an important stepping stone for Fiore as we achieved a number of key milestones,” said Erik Anderson, President and CEO of Fiore Cannabis. “We continued to build upon our strong first quarter and hone in on driving our efforts in our revenue-generating U.S. operations while divesting non-performing operations in Canada and improving our balance sheet. During the quarter, we continued to see strong sales performance at our Apex Cultivation and Production Facility in Las Vegas, Nevada and retail sales performance continuing to progress along with expectations at our cannabis dispensary in Desert Hot Springs, California. With our year-over-year revenues up by more than 50% and a gross profit achieved, we also reduced our G&A substantially.”
Fiore reported the following financial highlights for the second quarter and for the half year ended June 30, 2021:
- Revenues were $605,000 in the second quarter of 2021, an increase of 5% compared with $578,000 in the second quarter of 2020. For the first half of 2021, revenues were $1,692,000, an increase of 53% compared with $1,108,000 in the first half of 2020. Increased sales from the Apex Facility and continued strong retail performance at Desert Hot Springs were the primary drivers.
- Gross profit was $337,000 in the second quarter of 2021 compared with a gross loss of $457,000 in the second quarter of 2020. For the first half of 2021, gross profit was $559,000 compared with a gross loss of $365,000 in the first half of 2020. Improved gross profit illustrates the Company’s ongoing focus on operational efficiencies and pushing its efforts to high-profit activities in the U.S. operations.
- General & Administrative expenses were $1,138,000 in the second quarter of 2021, a substantial improvement compared with $2,283,000 in the second quarter of 2020. This was due primarily to operating efficiencies at the corporate level and continued maximizing of workflows.
- Net loss from continuing operations was $629,000, or $0.004 per share in the second quarter of 2021, compared with $5,043,000, or $0.04 per share, in the second quarter of 2020. The net loss in the second quarter of 2021 included income from the sale of licences in Nevada.
- The Company’s deficit was $114,737 at June 30, 2021, essentially unchanged compared with $114,391 at March 31, 2021.
- Cash increased to $366,000 at June 30, 2021, compared with $175,000 at March 31, 2021. During the second quarter of 2021, the Company completed a private placement with two tranches for proceeds of $1,281,000.
Anderson continued, “Our focus for the remainder of 2021 is to move the Company into a growth phase and expand operations in the U.S. We are very pleased with progress at the Apex Facility and the high-quality cannabis products we are producing there and it should be noted that sales towards the end of the quarter were strong, which gives us a great start on our Q3 revenues. We have also broadened our product lines and ramped up our Diamante extraction lab to satisfy the growing demand in concentrates from the Nevada market. Revenues generated from our concentrates will start to hit our income statement in Q3. Our planning, experience and ability to source strategic tranches of financing have also continued to pay returns. While our sale of the Celista assets in Canada happened subsequent to the second quarter, the benefits of this divestiture and the positive impact on our balance sheet will be fully captured and communicated in the second half of this year. I’m proud of the Fiore team and the effort we have put in to turn the company and point it in the direction of growth. We have put ourselves in a solid position and expect to continue growing our operations and executing on our strategy with the second half to this year already looking very promising.”
Cannabis Industry Involvement
The Company owns marijuana licenses in California and Nevada. Marijuana is legal in each state; however, marijuana remains illegal under United States federal law and the approach to enforcement of U.S. federal law against marijuana is subject to change. Shareholders and investors need to be aware that federal enforcement actions could adversely affect their investments and that the Company’s ability to support continuing U.S.-based operations and its access private and public capital could be materially adversely affected.
This news release contains forward-looking statements or information that relate to our current expectations and views of future events, including in respect of future financial and operational performance, future business goals and plans, the resiliency of the Nevada and California markets, the likelihood of the growth of retail sales, the doubling of our cultivation footprint, the expansion of our operations in Nevada and California, the U.S. growth strategy generally, future revenues due to new product releases and the prospect of future returns for investors. Statements which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, outlook, expectations or intentions regarding the future including words or phrases such as “anticipate”, “objective”, “may”, “will”, “might”, “should”, “could”, “can”, “intend”, “expect”, “believe”, “estimate”, “predict”, “potential”, “plan”, “is designed to”, “project”, “continue”, or similar expressions suggest future outcomes or the negative thereof or similar variations. These forward-looking statements are based on the Company’s current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate.
Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Such factors include, among others: the risks and uncertainties identified in the Company’s reports and filings with the applicable Canadian securities regulators, risks and uncertainties related to the economic impacts of COVID-19 and vaccination programs across the U.S., assumptions regarding future levels of tourism to Las Vegas, assumptions regarding consumption rates for cannabis in the U.S., assumptions regarding the success of future product launches and demand for such products, assumptions regarding restrictions on air and other travel, assumptions and uncertainties related to financing activities, assumptions regarding the activities of secured and unsecured creditors of the Company, uncertainties and risks related to ongoing litigation matters, , risks related to the manufacture of cannabis products for consumer consumption, risks related to manufacturing process itself, regulatory and other impediments to the legal sale of cannabis in the U.S., risks related to certain joint ventures and partnerships, risks related to the regulatory processes regarding licensing in the States of Nevada and California and assumptions regarding the approval of additional cultivation space by regulatory agencies where required. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise.