Cannex Capital Holdings Inc (CNSX:CNNX) (OTCMKTS:CNXXF) announced impressive financials today. The low profile Washington and California-based operator reported revenue and adjusted EBITDA increases that have few peers in the cannabis sector. We explore further.
This morning, Cannex released numbers regarding its Q1 2019 financial results ended July 31st, 2018. These were of the audited variety, in accordance with International Financial Reporting Standards (IFRS). The results, as mentioned, should garner some attention.
Revenues—generated primarily by way of packaging sales and rental income—increased 223% to $3,400,435 in Q1 2019, compared to $1,528,341 for the comparative period. Income for the period was $2,428,507 ($.01 per share) versus a loss of $403,027. Adjusted EBITDA increased 73% to $1,780,832 for Q1 2019, as compared to $983,186 for the prior corresponding period.
While these numbers signal robust growth, it’s important to note that due to the company’s change in fiscal year end, the quarterly numbers only included two months of operations instead of three. Thus, the YoY comparables look more impressive than might otherwise be the case. Still, the vigorous growth is clearly indicating that Cannex is making a significant dent in the marketplaces in which they operate.
Cannex Capital Group CEO Anthony Dutton shares news of the company’s strong financials based on revenue generated from its holding company, Northwest Cannabis Solutions
The next milestone in-wait for Cannex is the closing of the Jetty Extracts (Ametrine Wellness Inc.) announced in April. The acquisition of the popular Oakland-based edibles operator is still pending months after the binding letter agreement was reached. Today, the company also revealed it had executed an amendment to the previously‐signed accord, extending it until October 15, 2018. No assurances were given that the transaction will actually follow through as proposed—or at all.
Apparently, some additional due diligence was required, however Cannex CEO Anthony Dutton revealed that the acquisition was “still on track… there are no issues other than just the typical things you would expect to see around a complex, cross-border transaction” as early as September. The pending transaction would qualify as among the most material events the company’s short history, should it close.
Midas Letter will have further coverage on Cannex Capital Holdings as further events warrant.
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