Become A Featured Company

Decibel Announces Net Revenue Increases of 29% from Prior Quarter, First Period of Positive Adjusted EBITDA and Results of Annual Meeting

Ryan Allway

November 27th, 2020

News

Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSXV: DB) (OTCQB: DBCCF), a premium cannabis producer and retailer, is pleased to announce its third quarter financial results for the three-month and nine-month periods ending September 30, 2020.

“We are beginning to demonstrate the positive results of our collective efforts to reposition Decibel for success, as we remain focused on executing our strategic plan” said Benjamin Sze , CEO of Decibel. “We continue to execute as a producer of premium cannabis, with strong demand for our latest cultivars. The early success of our cannabis 2.0 product categories validates Decibel’s approach to product innovation while maintaining our commitment to quality.”

In the third quarter of 2020, the Company achieved net revenue growth of 29% and, for the first time, positive adjusted EBITDA, by delivering net revenue growth in all business verticals. The Company executed on its strategic plan, delivering high end cannabis products and consumer experiences through its Qwest Family of Brands and Prairie Records retail business, realizing cost reductions, and launching vape and concentrate products within the third quarter.

Q3 2020 Financial and Operational Highlights

  • Net Revenue Growth: Total net revenue grew by 29% over the second quarter to $7.6 million , driven by strong sales growth from retail and cultivation operations, and only includes one month of derivative product sales in September. Net revenue grew by 163% over the comparative 2019 period.
  • First Period of Positive Adj. EBITDA: The third quarter marks an inflection point in the business, as the Company achieved $860 thousand of adjusted EBITDA, an improvement of $886 thousand from the prior quarter.
  • Increased Qwest Sales : 272 kilograms sold in the third quarter, with an average wholesale flower net price per gram of $8.68 for the period, a 9% increase over the second quarter of 2020. The Company launched new trendsetting cultivars that deliver high THC and strong terpene profiles at the start of the quarter, including Kush Mints, Point Break, and Ex-Wife.
  • First Month of Derivative Sales: In September, Decibel achieved a key milestone with its extraction and manufacturing facility, The Plant, shipping its first orders to Saskatchewan andAlberta . This initiative contributed $785 thousand of net revenue for the period. Initial product launches have been well received with reorders being received shortly after initial sales.
  • Strong Prairie Records Results: Increased revenue for the period to $3.9 million , reflecting sales growth of 2% over the second quarter of 2020. Decibel opened two new Alberta retail stores in July, one near the University of Alberta campus in Edmonton and one beside the Palace Theatre in downtown Calgary on Stephen Ave.
  • Cost Reduction Initiatives: Decibel completed the majority of its corporate cost cutting initiatives in the third quarter, and remains laser focused on managing costs and driving profitable operations. Had Westleaf and We Grow been combined for the entire 2019 year, a 32% reduction in SG&A year to date would have been realized, despite commencing commercial operations at the Plant and new retail store openings in Q3 2020.
  • Substantial Completion of Construction of Thunderchild Cultivation: Decibel substantially completed construction of its large scale, indoor cultivation facility, Thunderchild Cultivation, in July. The Company has submitted a complete site evidence package to Health Canada for licensing of the Thunderchild Cultivation facility.

Quarterly Highlights

Three months ended

Nine months ended

September 30,

September 30,

September 30,

September 30,

2020

2019

2020

2019

Net wholesale revenue of flower

$2,361

$2,880

$6,578

$4,702

Kilograms of flower sold

272

369

782

563

Average wholesale flower gross pricing per gram

$10.18

$9.07

$10.15

$9.81

Average wholesale flower net pricing per gram

$8.68

$7.80

$8.41

$8.35

Kilograms of cannabis harvested

311

345

936

1,080

Net wholesale revenue of extracts

$785

–

$785

–

Other wholesale revenue

$500

–

$565

–

Number of retail stores

6

nil

6

nil

Retail revenue

$3,932

nil

$10,578

nil

Total

Net revenue

$7,578

$2,880

$18,505

$4,702

Gross profit before fair value adjustments

$2,898

$1,126

$7,164

$1,804

Adjusted EBITDA (a)

$860

$875

$425

$0

 

(a)

Adjusted EBITDA is a non-GAAP performance measure. Refer to ” Cautionary Statements – Non-GAAP Measures” for further details.

 

Decibel’s financial statements for the three-month period ending September 30, 2020(“Financial Statements”) and related Management’s Discussion & Analysis (“MD&A”) for the reporting period are available under the Company’s profile at www.sedar.com .  As of September 30, 2020 , Decibel was in compliance with all of its financial covenants and expects to remain in compliance for the remainder of its twelve-month forecast period.  The Company’s ability to meet the conditions of these ratio covenants over the next twelve months is subject to the Company’s ability to operationalize capital projects that are either recently completed or are subject to Health Canada licensing and operationalizing, and all other applicable regulatory approvals in order to generate revenues.

Leave of Absence

Due to personal reasons, Benjamin Sze , Chief Executive Officer, is taking a leave of absence from his role as Chief Executive Officer of the Company as of the close of business today for an indefinite period of time. Cody Church , the Company’s current Chairman of the Board, has been appointed Interim Chief Executive Officer, effective as of the close of business on November 25, 2020 .

Results of Annual Meeting

Decibel is also pleased to announce that its shareholders approved all matters submitted by the Company for consideration at its annual and special meeting of shareholders held yesterday, November 24, 2020 (the “Meeting”).

Due to the special circumstances arising from the global COVID-19 pandemic, and following guidance of local health authorities for social distancing, Decibel encouraged shareholders to vote in advance of the Meeting using the instructions provided in the Notice of Meeting and Management Informational Circular and Proxy Statement. The Company also provided remote access to the Meeting via an audio webinar, and will make a recording of the Meeting available on its website in the coming days.

At the Meeting, Decibel’s shareholders:

(i)

Fixed the number of directors of the Corporation to be elected at the Meeting at six directors;

(ii)

Elected each of Cody Church, Paul Wilson, Michael Kelly, Ivan Casselman, Benjamin Sze and Billy Yellowhead as directors of the Company;

(iii)

Appointed KPMG LLP, Chartered Professional Accountants, as the Company’s auditors;

(iv)

Re-approved the Company’s stock option plan; and

(v)

Re-approved the Company’s restricted share unit award plan.

 

About Decibel

Decibel is uncompromising in the process and craftsmanship needed to deliver the highest quality cannabis products and retail experiences. Decibel has three production houses operating or under development along with its wholly owned retail business, Prairie Records. The Qwest Estate in Creston, BC is a licensed and operating 26,000 square foot cultivation space which produces the widely championed, rare cultivar-focused brands Qwest and Qwest Reserve, which are sold in six provinces across Canada . Thunderchild Cultivation, an 80,000 square foot indoor cultivation facility in Battleford, SK is scheduled to be completed and licensed in 2020. The Plant, Decibel’s extraction facility, in Calgary, AB has 15,000 square feet of Health Canada licensed extraction and product development space. This production house will fuel the growth of our brands Qwest, Qwest Reserve, and Blendcraft, into new and innovative product formats like concentrates, vapes, edibles and beyond.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Network Partners

Follow Us on Social Media

LinkedIn

About CFN Media Group

CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.

Copyright © Accelerize Inc. · All Rights Reserved · Privacy Policy · Legal Disclaimer

loading