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Cannasouth reports full-year loss but revenue growth

March 4, 2024
in Business
Cannasouth reports full-year loss but revenue growth
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Farmer holding cannabidiol (CBD) bottle  in cannabis field. (Photo by IGOR STEVANOVIC / SCIENCE PHOTO / IST / Science Photo Library via AFP)

File photo. The company said it had exported commercial quantities of dried flower and cannabidiol to Australia.
Photo: IGOR STEVANOVIC / SCIENCE PHOTO LIBRARY

Cannasouth says direct access to one of the world’s fastest growing markets will continue to boost revenue growth along with regulatory changes expected this year.

The medicinal cannabis company made another full-year net loss of $8.8 million in the year ended December, which included costs of $1.3m to merge with Eqalis Group. Revenue grew 11 percent to $956,000.

Chief executive Mark Lucas said the company’s growth was linked to that of Australia’s which had emerged as one of world’s fastest-growing markets.

“In 2023 retail pharmacy sales were A$165m – this figure is 60 percent higher than 2022 and illustrates the huge growth of the industry (in Australia),” he said, adding the market was expected to each A$1.15 billion by 2033.

However, he said there were differences between the two countries, which would have benefits for New Zealand manufacturers.

“New Zealand, products must be verified by the Medicinal Cannabis Agency to meet the New Zealand Minimum Quality Standard. Conversely, in Australia, the responsibility falls on the product importer.”

Lucas said New Zealand manufacturers already complied with Good Manufacturing Practice (GMP) standards, which was the standard Australia was moving to.

He said Cannasouth successfully exported commercial quantities of both dried flower and Cannabidiol (CBD) to Australia in the year just ended, which demonstrated diversification in the sales channel.

“Cannasouth is currently negotiating to deliver ongoing bulk supplies of pharmaceutical ingredients to some of the largest industry manufacturers in Australia and expects to announce completion of these contracts in the coming months.”

He said a number of amendments to enable non-therapeutic research involving cannabis plant material in New Zealand would improve the company’s operational process.

“These changes will streamline our operational processes, reduce costs, and enable us to seize new market opportunities.”

The changes were expected to be implemented in the first half of 2024.

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