National Post (National Edition)
Newly listed pot firm Sundial makes top 10
Net revenue of $19.3M in inaugural report
Sundial Growers Inc., a Calgary-based cannabis producer that went public two weeks ago, brought in $19.3 million in net revenue in the second quarter, placing it among the top 10 pot companies in the country in terms of sales.
Sundial announced Wednesday it had sold 4,700 kilograms of cannabis in three months ended June 30. It was the company’s inaugural quarterly financial report as a public company, following its Aug. 1 listing on the Nasdaq, where it raised US$143 million through the issuance of 11 million shares.
Sundial has a market value of more than $900 million.
Since its debut however, Sundial’s stock has performed poorly, dipping as much as 30 per cent upon listing, which industry observers attributed in part to bearish sentiment toward the Canadian pot industry overall following recent regulatory breaches at CannTrust Holdings Inc. and the firing of former Canopy Growth Corp. co-CEO and founder Bruce Linton.
Sundial’s stock declined slightly in the first few hours of Wednesday morning before rebounding. It closed at US$10.75, up 3.5 per cent.
“We were surprised and disappointed on the first day because it was not what we expected, and that muted the celebration of the IPO a little bit,” said Torsten Kuenzlen, Sundial’s chief executive.
“What we are going to focus on is building a great business and do a better job of telling our story.”
The company reported a net loss of $12.4 million for the quarter, an improvement from the $16.7 million hit Sundial took in the quarter ended March 31. Adjusted EBITDA — often considered a more precise measure of a company’s profitability — showed a loss of $500,000 for the second quarter compared to a $5.5-million loss in the previous quarter.
“Sundial accomplished great things this past quarter and our team’s solid execution across key areas of our business resulted in significant revenue growth,” Kuenzlen said in a statement.
The company, which has over 300,000 square feet of licensed indoor grow space in Olds, Alta., said it harvested 9,551 kilograms of cannabis from 94 crops in the second quarter compared to 1,896 kilograms from 30 crops in the previous quarter. In midJune, the company received Health Canada approval for an additional 115,000 square feet of licensed space, which would add 34 new growing rooms to its facility.
Sundial operates primarily in Calgary, but has a cannabis business in the United Kingdom, under a subsidiary Sundial UK Ltd. In early July, the company acquired Bridge Farm Group, a producer of ornamental plants, flowers and edible herbs for $115 million — the company has said that the acquisition was part of a larger strategy to produce and sell CBD internationally.
All of the company’s revenue in the second quarter came from its domestic cannabis business. Kuenzlen said it is too early to project when Sundial will start bringing in revenue from its CBD venture in the U.K.