Nextleaf Solutions Ltd., a Canadian biotech company and cannabis processor, has announced its annual financial results for the fiscal year 2023, showing remarkable growth, operational efficiency, and financial resilience.
Revenue and profit surge
The company, along with its wholly-owned subsidiary Nextleaf Labs Ltd., reported a total gross revenue of nearly $10 million ($9.96 million) for the fiscal year 2023, with a gross profit of $2.3 million. This represents a growth of 186.1% compared to the previous year, when the company generated $4.6 million in gross revenue and $1.2 million in gross profit.
The company attributed the significant revenue increase to its commercialization efforts, especially in the fourth quarter, when it launched 15 new products into the Canadian recreational market, including soft gels, ingestible oils, and vape cartridges. The fourth quarter revenue was $3.3 million, a 24% increase from the previous quarter and a 77.7% increase from the same period in 2022.
Positive cash flow and debt-free milestone
The company also achieved four consecutive quarters of positive cash flow from operations, demonstrating its ability to reduce operating expenses, increase revenue, and improve gross margins. The company’s cash flow from operations was $1.1 million for the fiscal year 2023, compared to a negative cash flow of $2.4 million in 2022.
Moreover, the company reached a significant financial milestone by retiring its senior note, which was due in January 2024, and becoming debt-free. The company paid off the remaining principal and interest of $2.6 million in December 2023, using its cash on hand and proceeds from the exercise of warrants. The company said that becoming debt-free strengthens its balance sheet and reduces its interest expenses.
Strategic achievements and outlook
Nextleaf Solutions also highlighted its strategic achievements and outlook for the future. The company said that it has secured 16 patents related to its proprietary extraction and purification technology, which enables it to produce high-purity cannabis oils and ingredients at a low cost. The company also said that it has expanded its distribution network across Canada and entered into several supply agreements with licensed producers and cannabis brands.
The company also expressed its optimism for the growth of the cannabis industry, especially the demand for cannabis 2.0 products such as edibles, beverages, and vapes. The company said that it is well-positioned to capitalize on this opportunity, as it has a scalable and efficient production platform, a diversified and innovative product portfolio, and a strong intellectual property portfolio.
The company’s CEO, Paul Pedersen, said: “We are very proud of our team’s accomplishments in 2023, as we delivered strong financial performance, positive cash flow, and debt-free status while launching 15 new products into the Canadian market. We believe that we have established ourselves as a leader in the cannabis extraction and processing space, and we look forward to continuing to execute our vision of unlocking the full potential of the cannabis plant.”