Cannabis firm Rubicon reports quarterly profit with Canada focus

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Vancouver, British Columbia-based cannabis producer Rubicon Organics said it recorded adjusted EBITDA profitability, net profit from operations and positive free cash flow in its quarter ended Sept. 30.

Even if it represents only one quarter, the trifecta of positive results is a rare achievement in Canada, where competing standard producers have lost billions of dollars to date.

Rubicon reported a profit from operations of 2.03 million Canadian dollars ($1.51 million) in the third quarter, an improvement over the CA$3.62 million loss in the same quarter last year.

Adjusted EBITDA was CA$1.9 million in the July-September period, compared with negative adjusted EBITDA of CA$644,000 in the same period in 2021, according to a news release.

Rubicon also said it recorded operating cash flow of CA$1.4 million and positive free cash flow of $400,000 for the three months ended Sept. 30, 2022.

The company credited its achievements to steadily growing sales.

Rubicon’s net revenue has grown in every quarter since early 2020 – another extremely rare achievement for a federally licensed standard producer.

Net revenue was CA$10.5 million in the third quarter of this year (up 49% year-over-year), CA$8.8 million in the second quarter (up 48% year-over-year) and CA$5.1 million in the first quarter (up 25% year-over-year).

The company said in the release that job action in British Columbia – a cyberattack impacting the government monopoly distributor in Ontario and rotating strikes in Société québécoise du cannabis stores – had an impact on net revenue, “given that the orders were either halted for weeks or significantly slowed down in both BC and Ontario, but we are unable to quantify the impact of these events.”

Rubicon said it is focused on providing “premium organic certified” marijuana for the medical and adult-use markets in Canada.

According to the release and citing data from data from analytics firm Hifyre, Rubicon said its total market share in the Canadian flower and pre-roll category amounted to 3.2% in the quarter that ended Sept. 30.

That figure is even higher when considering only the premium flower and pre-roll markets, where Rubicon said it commands 8% of the Canadian market.

Rubicon said it is doing so well in Canada that it hasn’t been able to look abroad.

“At the beginning of 2022 our third pillar was to open the routes to market for our products internationally. However, due to domestic demand of our products over available volumes produced, Rubicon plans to focus on the profitable premium Canadian market in the short term,” the company said in a regulatory filing, adding that it “will continue to assess international opportunities in the future.”

Rubicon said it will not continue to pursue its certificate for European Union-Good Manufacturing Practice (GMP).

The certification is generally considered to be an important step to export medical marijuana to markets in the EU.

However, despite cannabis producers in Canada and overseas pouring significant capital into efforts to obtain the certificate, international medical cannabis markets outside North America remain extremely small.

“While we believe that there will be opportunities in the international markets, we have decided to continue to focus on the Canadian market in the short-term and thus for the time being, (Rubicon) will not continue to pursue its EU-GMP certificate or maintain other certifications required solely for international export,” Rubicon said in its filing.

“Rubicon expects to continue to evaluate and investigate international markets for future opportunities.”

Rubicon shares are traded on the TSX Venture exchange as ROMJ.

Matt Lamers can be reached at