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Decibel Cannabis Company Inc. brought in $24.1 million in net revenue for the three months ended September 30, 2024, with a net loss of $585,000 in their most recent Q3 2024 financial report.
Gross revenue for the cannabis company was down 13% year-over-year, from $46.5 million in Q3 2023 to $36.9 million in Q3 2024, which the company says is primarily due to a decline in net Canadian recreational sales and international sales.
This was an increase in net revenue from the previous quarter ($22.1 million) but a decline in net income of $122,000.
Net Canadian recreational sales for the three months ended September 30, 2024, were $23.8 million, a decrease of 12% from the same period in 2023. Decibel says the decline was driven by increased competition in the infused pre-roll segment, and a seasonal slowdown in demand for pre-roll and vape products.
International sales for the three months ended September 30, 2024, and were $309,000, down from $500,000 in Q3 2023. Decibel attributed the decrease to the halt of exports to Israel as the Company transitioned to a new partner, and was partially offset by exports to new partners in the United Kingdom and Australia.
Calgary-based Decibel is one of the Canadian companies named in an investigation by the Israeli government into claims of “product dumping”, with the Israeli government initially recommending a floating levy or tariff of 63% for Decibel products sold in Israel. The most recent recommendation dropped that proposed rate to 2%.
Decibel incurred nearly $12.8 million in excise taxes in the most recent quarter, 34.9% of its gross Canadian recreational sales.
“Decibel has been very deliberate about reducing our current liabilities by ~5mm this quarter. Maintaining discipline over time will result in a stronger balance sheet,” stated Decibel CEO Benjamin Sze in a company press release. “This marks the last quarter where our primary focus is on Canadian domestic recreational sales. While we continue to integrate AgMedica into our portfolio, it is encouraging to see there is significant demand internationally for Decibel flower.”
Decibel is a vertically integrated cannabis company with two licensed cultivation facilities and a licensed manufacturing facility. Decibel also acquired a third licensed cultivation facility upon acquiring AgMedica Bioscience Ltd., a subsidiary of Atlas Global Brands, which the company completed on October 28, 2024. (Q4 2024). Decibel also acquired GreenSeal Nursery, Ltd., a licensed nursery, in connection with the deal.
AgMedica is a licensed cannabis producer focusing on international distribution to seven countries, including Australia, Denmark, Germany, Israel, Norway, Spain, and the United Kingdom.
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