Sundial’s revenue from recreational cannabis in Canada plunged by more than one-third in its most recent quarter compared to the previous period, as the company took a hit from price compression and provincial wholesalers culling slow-moving products.
The Calgary, Alberta-based marijuana producer reported net revenue of 9.9 million Canadian dollars ($8 million) for its first quarter through March 31, well below analysts’ expectations of approximately CA$12 million.
Net loss doubled from the previous quarter to CA$134.4 million, largely as a result of a CA$130 million noncash charge.
From January through March, Sundial harvested 5,387 kilograms (11,876 pounds) of dry cannabis, or about half the amount harvested one year ago.
The company sold 3,989 kilogram equivalents in the quarter, less than the 4,437 kilogram equivalents it sold in the same period last year.
Sundial experienced significant revenue declines in most of its key product categories.
By category, revenue was:
- Dried flower: CA$9.7 million (down 19% from previous quarter).
- Vapes: CA$1.4 million (down 67%).
- Cannabis oil: CA$181,000 (down 43%).
- Edibles and concentrates: CA$438,000 (up 43%).
A bright spot was sales to other cannabis companies.
Sundial earned revenue of CA$2.7 million from wholesale sales to other licensed producers, up 11% over the previous quarter.
Sundial recently announced plans to acquire Inner Spirit Holdings, a major Canadian cannabis retailer and franchisor of Spiritleaf stores. The transaction is expected to close this summer.
Sundial’s cash and cash equivalents as of March 31 was CA$873 million.
Sundial shares trade as SNDL on the Nasdaq exchange.