MONTREAL, June 25, 2024 /CNW/ - The Good Shroom Co Inc. (the "Company" or "MUSH") (TSXV: MUSH), an emerging player in the Canadian cannabis industry which owns and operates a portfolio of brands that include cannabis products and wellness beverages, announces its financial results for the quarter ended April 30, 2024. Readers are encouraged to review the financial statements and the accompanying Management's Discussion and Analysis available at www.sedar.com.
FINANCIAL HIGHLIGHTS
- The Company achieved Q3 gross revenue of $1,135,991 with trailing 9 months gross revenue of $3,773,050.
- A gross profit of $264,105 was recorded for the quarter, with trailing 9 months gross profit of $1,080,407.
- Notably, the Company achieved a net quarterly profit of $30,840, marking a fifth consecutive quarter of profitability.
- Cannabis products accounted for 96% of revenue, underscoring the Company's strategic focus on this segment, with wellness beverage sales of $61,665. The Company will begin re-focusing its efforts on its wellness beverage line as it now has the capacity to do so.
- As of April 30, 2024, the Company maintained satisfactory working capital of $658,129 and carried no long-term debt obligations.
- Importantly, the Company has no outstanding excise taxes owed, demonstrating its commitment to fiscal responsibility.
Growth Strategy
The Company's approach in Quebec is defined by the unique market dynamics where product cycles occur only twice a year, allowing few opportunities annually to expand its portfolio and increase revenue in any one fiscal year. While this limits the immediate ability to introduce new products, its track record in Quebec demonstrates its ability to navigate these cycles successfully, and it continues to build on this foundation. The Company's strategy is not focused on short-term gains but on sustained profitable growth over the medium to long term.
- Annual Product Cycle: Few chances per year to expand our portfolio.
- Proven Track Record: Consistent performance since launching its first cannabis product less than three years ago.
- Long-Term Focus: Emphasis on strategic growth rather than immediate revenue.
Expanding beyond Quebec, the Company's strategy adapts to the different market conditions in other provinces. Unlike Quebec, where its established approach has yielded positive results, other provinces present markets saturated with traditional cannabis products. Therefore, it is imperative to introduce innovative and competitively priced products to differentiate itself from the competition. The growth strategy involves leveraging strengths in Quebec while innovating for broader market appeal in other regions.
Innovation Highlight: THC-Infused Pouches
One of its key innovations is the development of THC-infused pouches for sublingual administration, in collaboration with a partner. This product, currently in the final stages of development, is similar to popular nicotine pouches but with THC. This method of administration is familiar to consumers and offers a competitive edge in pricing due to its favorable excise tax classification.
- Product Details: 10 pouches per unit, each containing 10mg of THC.
- Cost Efficiency: Approximately $1 of excise tax per unit, making it competitively priced.
- Market Familiarity: Familiar method of administration similar to nicotine pouches.
- First to Market: Potentially the first THC-infused pouch product in the market.
The Company has received its first approval to list this line in Alberta and expects to launch it in late 2024/early 2025. We are submitting this product line to various strategic provinces across Canada, anticipating market interest and consumer adoption. This innovative product exemplifies the strategy to introduce differentiated cannabis products in new markets, setting the stage for continued growth.
Upcoming Product Cycles
Looking ahead, the next product cycle in Quebec occurs in October/November of this year for which the Company has already made its submission and is expecting to receive the submission results in August. This upcoming product cycle is a culmination of its efforts and the knowledge they have gained of consumer habits over the past three years. Across Canada, various product cycles occur at different times, and the Company plans to participate in them strategically, especially for innovative products like its THC-infused pouches.
CEO's Statement
"We are pleased with our financial performance this quarter, marking our fifth consecutive quarter of net profits—an achievement that few cannabis companies can claim," stated Eric Ronsse, Chief Executive Officer. "In less than three years, we have managed to reach this point and we are just getting started. Our consistent profitability underscores our strategic focus and disciplined execution, positioning us strongly for potential future growth. We are excited about the opportunities ahead. In Quebec, we now understand local consumption habits better than ever, our strategy of navigating the unique product cycle dynamics has proven effective and we will be doubling down on what we do here over the next many product cycles. Additionally, we have a strategy for the rest of Canada and beyond, currently being developed. We are happy with our current market position as there are opportunities that lie ahead."
Grant of Stock Options
The stock options were issued on the 20th of June 2024, granting 100,000 options to each member of the board of directors and the CFO. The options have an exercise price of $0.11 per share, which is the closing price of the Company's shares on the TSX Venture exchange on the 19th of June 2024. The options will expire on 19th of June 2032.
On April 24th 2024 stock options were issued to a new director, Mr. Michel Dahan, in the amount of 100,000 stock options with an exercise price of $0.135 per share. The options will expire on April 24th 2030.
Stock options were also issued to a contractor of the Company, Mr. Rob Leichman, in the amount of 120,000 stock options with an exercise price of $0.17 per share on January 3rd 2024. The options will expire in the 3rd of January 2027.
About the Company
MUSH operates a portfolio of brands which include traditional cannabis and wellness beverage products.
SOURCE Good Shroom Co Inc. (The)
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