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This Cannabis Stock is up over 230% YTD: Here’s Why

Jocelyn Aspa Jocelyn Aspa, The Market Herald
2 Comments| August 19, 2021

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The marijuana industry is now well into the Cannabis 2.0 phase, and while the market faced some unprecedented challenges in 2020 it is still the fasted-growing industry in Canada. Case in point, cannabis sales in Canada hit C$2.6 billion last year catapulted by diversification in products and new brands.

Now that we’re well past the halfway mark of 2021 — and inching closer to the last quarter of the year — cannabis sales in Canada are expected to grow twice as fast this year and three times faster into next year.

With that in mind, companies like Decibel Cannabis Company Inc. (TSX-V.DB, OTCQB: DBCCF, Forum) are reaping the benefits of that growth thanks to its high quality products.

The premium craft cannabis producer is an amalgamation of Westleaf Inc., and We Grow BC Ltd., which merged at the beginning of 2020 to form Decibel Cannabis Company. The company has three production house that are currently operating or under development and has a wholly owned retail business in Prairie Records.

Based out of Calgary, AB, Decibel Cannabis grows its revenue through wholesale sales of both products and services through its production houses to distributors and licensed producers. This also includes direct sale of products through its retail locations to end customers.

In other words, the company’s presence in Canada hasn’t gone unnoticed and, is in fact, ranked number one in premium flower and concentrates and ranks third in the vape category.

With that in mind, the company’s product lines and brands include:
  • Qwest – “perpetuating the legendary status of BC Bud through the meticulous craft cultivation of uncommon strains and rare phenotypes.”
  • BlendCraft – “keeping it simple with Indica, Sativa, Hybrid Blends…created using only flower and trichome-coated sugar leaf from Qwest’s collection of superior cultivars.
  • General Admission – a brand with four strain specific vapes: and
  • Prairie Records – the company’s retail vertical offering “an immersive and conceptual purchasing experience.”

With quarterly financial reports season upon us, it goes without saying that the first half of the year has been nothing short of kind to the premium producer. Decibel Cannabis reported its Q2 2021 financial report on August 16, highlighting the company achieved net revenue of C$12.4 million and strong gross margins of 41 per cent and a record adjusted EBITDA of $2.1 million, representing its fourth consecutive quarter of positive adjusted EBITDA.

Q2 2021 financial results highlights

In a press release, the company said it reached net revenue of $12.4 million, catapulted by strong product sales, representing a 111 per cent increase of the same quarter from last year.

In addition to a record adjusted EBITDA quarter, Q2 2021 adjusted EBITDA increased 6 per cent from the previous quarter.

Meanwhile the company sold 449 kilograms of flower in the second quarter with an average wholesale net price of $7.96 per gram. In terms of retail sales, the company net $3.2 million, a 1 per cent increase from Q1, driven primarily by seasonality and sales growth in its Alberta retail stores and relaxation in COVID-19 restrictions.

In terms of its products, Decibel Cannabis continued rolling out in-demand products by laughing 15 new product SKUs across provinces such as Ontario, Saskatchewan, Alberta and British Columbia. Decibel Cannabis also launched two new cultivars — Stuffed French Toast under its Quest brand and Sunset Mac under its Qwest Reserve brand — as well as two live resin vapes, two strains and large format pre-rolls.

“We are confident in our strategy centered around creating industry leading quality and choice to meet the needs of today’s cannabis consumer,” the company said in a release. “With the strength in our multiple brands, we remain focused on driving innovation and bolstering our product offerings through our 2.0 pipeline and Thunderchild flower production ramp up.”

In line with this, Decibel Cannabis also continues its investment into working capital as it looks to ramp up its facility, with all 20 rooms fully planted and commissioned. Already, the facility has outperformed the company’s expectations on a yield per square foot.

By Q4, Decibel anticipates being able to conduct run rate production with a focus on implementing a range of operational efficiencies that can be done in post-processing.

The investment opportunity

As the Canadian cannabis market continues its path towards record-breaking revenues, investors will want to keep their eyes on Decibel Cannabis.

At $0.32 per share as of market close on August 13, the company is already a steal, while its share price has risen over 250 per cent since March 2021 alone.

In other words, investors are paying attention to this small cap company as it continues to dominate in market branding and retail pricing.

To find out more about the company, visit its website at decibelcc.com.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.



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