C21 Investments Inc., (CSE CXXI), (OTCQX CXXIF), seems to have done better than usual in the current desert.
Vertically integrated, the company’s third quarter revenue was $7.9m ending December 31, up 20.8% from $6.55m in the previous period. This increase is primarily due to a new Nevada retail outlet.
Retail revenues grew by 20.2% to $7.6million, compared with $6.3million in the previous quarter. The growth is largely due to the opening of the South Reno Silver State Relief Dispensary in June 2024, which was not part of the results from the previous year. The company has not disclosed the same-store sales for its existing Nevada stores in Sparks, and Fernley.
The new South Reno location, which it bought from Deep Roots Harvest for $3.5 million, has shown strong sequential growth since opening, with monthly sales rising 90% to $518,000 in December from $273,000 in July, according to filings.
Sonny Newman, CEO of Sonny Newman Inc. said that despite the continued compression in industry margins have improved dramatically. Retail sales increased by 22% in the last two quarters.
In the most recent quarter, gross margin increased to 46.5% from 43.5% one year ago. This was attributed by the company to synergies in operations from the new site. In the last quarter, income from operations rose to $978.114. This is up from $486.544.
The loss per share was reduced to breakeven, which is $130,941. This compares with a loss per share of 2 cents, or $2, million in the previous year.
The company reported an increase in wholesale revenue to $333.632 from just $245.461 one year ago. However, executives warned that this segment could decline if production is shifted to the expanding retail operation. According to market data, the growth was achieved despite a 4% decline in Nevada cannabis sales during the same period.
The cash flow metrics improved, as the third quarter’s operating cash before tax reached $1.7m, an increase of 44.6% over $1.2m in the previous year. Cash was $2.5M at the end of last year, with liabilities falling by $900K.
C21 announced in November that it would repurchase up 5% of the outstanding shares under a standard issuer bidding program.
Silver State Relief is the brand of three dispensaries operated by the company in Nevada, as well as cultivation and processing plants. Although it has legacy operations still in Oregon, under the brands Phantom Farms and Hood Oil.