Rubicon Organics Reports Q2 2024 Financial Results

LOS ANGELES- Rubicon Organics Inc. a licensed producer specializing in organic and premium cannabis, released its financial results for the second quarter ending June 30, 2024. The company reported record net revenue of CAD 12.1 million, representing a 7% increase from the same period in 2023. For the first six months of 2024, Rubicon’s net revenue reached CAD 21.0 million, up 5% year-over-year.

Financial Performance

Rubicon achieved an adjusted EBITDA of CAD 900,000 for Q2 2024, down 50% from CAD 1.8 million in Q2 2023. The company generated positive operating cash flow of CAD 1.1 million and free cash flow of CAD 700,000 during the quarter. Despite the revenue growth, the company faced a decline in gross profit before fair value adjustments, which dropped 21% to CAD 3.7 million compared to the previous year.

Market Position and Product Expansion

Rubicon maintained its position as the leading premium licensed producer in Canada across all product categories, with a 6.5% national market share. Notably, its Wildflower™ topical brand captured a dominant 28% share of the Canadian market for the first half of 2024. The company also reported strong market shares in premium flower and pre-rolls, as well as premium edibles, with respective shares of 5.7% and 29.9% for Q2 2024.

In line with its growth strategy, Rubicon expanded into the vape sector, launching full-spectrum extract vapes in key markets including British Columbia, Alberta, and Ontario. The company reported that its national distribution had reached over 40% of stores within the first two months of sales.

Outlook and Strategic Initiatives

Rubicon’s CEO, Margaret Brodie, expressed confidence in the company’s continued growth, particularly with the recent entry into the vape market. The company plans to introduce additional vape strains by the end of the year, aiming to strengthen its market position further.

Despite the positive revenue trajectory, CFO Janis Risbin highlighted challenges such as the shift in consumer preference towards larger format purchases, which tend to yield lower gross profit per unit. To address this, Rubicon is working on strategies to re-engage consumers with its more profitable product offerings.

Rubicon reported a cash balance of CAD 9.5 million as of June 30, 2024, and is currently in discussions to refinance CAD 10.8 million in current loans and borrowings. The company anticipates continued revenue growth throughout 2024, although it remains cautious about ongoing competition and pricing pressures in the Canadian cannabis market.