Red Light Holland, a psychedelics manufacturer based in Ontario (CSE TRIP), reported Wednesday a decline of 9.5% in its third quarter revenue. The company was faced with challenges such as lower mushroom sales and an unfulfilled Costco order.
The revenue for the company that sells functional mushroom, mushroom grow kit and legal Psilocybin Truffles was $1.17 Million in the third quarter, ending December 31, down from the $1.29 Million reported during the same period of last year.
In contrast, revenue for the nine months of last year increased 17.8% from $3.5 to $4 million.
In a press release, CEO Todd Shapiro stated that “our financial performance for the third quarter 2025 reflects commitment to sustainable growth and strategic partnerships while maintaining strong cash control.”
In the third quarter, gross profit margins dropped from 42.3% to 35.5%. Shapiro blamed the drop in revenues on “lower wholesale sales of mushrooms and the returns from Costco Canada.”
Red Light Holland held $13.3 Million in cash by the close of December. Due to the company’s collections at Costco, and tax refunds from sales taxes, its cash level increased by $500,000.
One of the biggest problems for the Company is the fact that, back in January this year, it had been de-banked by a Canadian major bank due to its “compliance difficulties related to legal Dutch operations.” It complicates the financing of its planned mushroom farm, which is 80,000 square feet in size.
The company is currently looking for solutions to its banking problems for all of its operations.
Red Light Holland announced that Costco Canada will reorder 20,000 Happy Caps mushroom kits in the spring, after returning an earlier order. Red Light Holland announced that Irvine Labs, in California, will manufacture micro-dosing caps.
Red Light Holland’s business model has shown its resilience despite a number of challenges. These include the decline in tourism in The Netherlands, the debanking of Canadian banks, the lack of any regulatory changes, and the uncertain economic outlook from the market.
Its quarterly losses were reduced to $684,000 from $862,000, a 20.7% drop.