Exit from cannabis cultivation leads to revenue slump: The story behind Lowell Farms’ second-quarter loss – Lowell Farms (OTC:LOWLF)

Company: Lowell Farms Inc. LOWLF has released its unaudited financial results for the second quarter of 2024, highlighting significant revenue and profitability challenges. CEO Mark Ainsworth The company focuses on strategic alternatives to optimize assets, reduce overheads

and strengthen its financial position.

A decline in sales of mass products

The Company reported a net loss of $0.8 million, an improvement from the loss of $2.9 million in the first quarter of 2024, but a sharp decrease from the loss of $0.1 million in the second quarter of 2023.

Revenue for the quarter decreased sharply by 50% to $3.5 million compared to the same period last year, down from $7.0 million in the prior year quarter and down 27% from the first quarter of 2024.

The Company stated that this decrease was primarily due to a significant decrease in bulk product revenue, which decreased to $0.5 million following the Company’s exit from its cultivation facility in January 2024.

Gross profit remained negative with a gross loss of $0.6 million, corresponding to a negative gross margin of 15.7%.

Gross margin

Despite these losses, the company reported a slight improvement in gross margin compared to the first quarter at minus 17.0%, reflecting some stabilization following the completion of cultivation.

Adjusted EBITDA for the second quarter of 2024 was negative $1.9 million, a further decrease from negative $1.3 million in the second quarter of 2023 and negative $1.1 million in the first quarter of 2024.

Read more: MediPharm narrows Q2 loss, adjusted EBITDA rises as gross profit improves nearly 300% year-on-year

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