RE:RE:RE:RE:RE:RE:RE:RE:Why the 3Q Investor Reaction With respect to up scaling flower and meeting pre-roll demand.
SCQuin wrote: Hugo said this "Our quarter could have been much better had we been able to fill all of the demand."
This is not an overarching statement of the business at large. It's a specific problem with a series of available solutions.
Hugo continued in his intro with this;
"we did encounter some operational challenges during the quarter, which negatively impacted our gross margin. Those challenges were related to the scale-up of dried flower in pre -roll operations and especially delays out of our control in the delivery and commissioning of key automation equipment, which resulted in lower than anticipated volumes and higher than anticipated production costs. And while we have improved and we will continue to improve in navigating those operational challenges, we do expect some of them to persist throughout Q4 and part of Q1 2022 and regrettably that will impact our adjusted EBITDA target."
or ... If we can get the equipment we were promised here as promised by the manufacturer, welll....
I guess we'll just need to hire more elves for Xmas.
Short term pain.
The long term solution is to install the equipment. Margins will improve significantly then.
Long term gain.
Hang in there mates.
cheers