CANB Canadabis Capital Inc

• Gross quarterly revenue of $7.1 million
• Fiscal Q2/24 marks tenth consecutive quarter generating positive net income
• Adjusted EBITDA¹ in fiscal Q2/24 of $0.6 million
• Over 2000% growth in net revenue from Cultivation & Wholesale segment

CALGARY, AB, April 1, 2024 /CNW/ - CanadaBis Capital Inc. (the "Company" or "CanadaBis") (TSXV: CANB), a premium vertically integrated Canadian cannabis company, is pleased to announce results from our second quarter fiscal 2024, represented by our tenth consecutive quarter generating net revenue. The Company's Financial Statements and Notes, as well as Management's Discussion and Analysis ("MD&A") are filed on SEDAR at www.sedarplus.ca.

This quarter reflects another period generating positive earnings and Adjusted EBITDA¹ for CanadaBis, despite a 26% decrease in gross revenue over the same period the prior year due to increased competition in the market, and the resultant price compression. In response, the Company has allocated capital to innovation designed to remain ahead of competitors and to expand the SKU offering by adding multiple new products for future release. To support the Company's product enhancement initiatives, we have adjusted our strategy to increase brand awareness and capture market share through an extensive nation-wide campaign designed to equip retailers with enhanced awareness of the various SKUs, programs and educational value-adds to CanadaBis' wide variety of high-quality, lower-cost products. While such investments can have an impact on results in the immediate quarters, reinvesting in the business is critical to support the Company's top and bottom line over the longer-term.

Stigma Grow continues to re-formulate concentrate lines to meet demands from current clients to maintain larger terpene and cannabinoid profiles across the product offerings while also earning repeat sales. With these ongoing improvements, coupled with demand for our award-winning Infused Pre-rolls, Electric Dartz, Live Rosin Vapes and High-CBD Cartridges, CanadaBis anticipates continued positive performance in Fiscal 2024, while maintaining prudent financial management.

"Building on momentum realized in Q1 2024, I am proud to report that our second fiscal quarter represents another period of positive net revenue, earnings and adjusted EBITDA, reflecting our resilience despite a significant increase in competition and meaningful price compression as cultivators and processors reposition themselves in the market," said Travis McIntyre, CEO of CanadaBis. "Both in fiscal Q2 and Q3 2024, we are directing investment to enhance our product offering, while also launching a comprehensive nation-wide retail-focused marketing campaign that leverages existing brand awareness. Our goal is to increase the profile of established brands while supporting the introduction of at least 17 exciting new SKUs that we anticipate will increase sales in subsequent quarters. With our unique capabilities and consumer-centric value proposition, the Company has earned brand loyalty that positions us well to drive continued shareholder value creation in an industry rife with competition and continued regulatory challenges."

Q2 2024 HIGHLIGHTS

• Major Growth in Cultivation and Wholesale Segment – Net revenue from the Cultivation and Wholesale segment for Q2 2024 was $0.7 million compared to $0.03 million for the corresponding period in 2023, representing over 2000% growth. Several specialized SKU launches in the provinces contributed to this increase, including the Super Slim Cigarette Style Pre-roll and milled flower, positioning CanadaBis in a niche category of providing high quality, yet affordable, products. This new product is expected to increase sales throughout fiscal 2024, along with new dry flower brands and yet-to-be released SKUs. For the six months ended January 31, 2024, net revenue in the segment increased to $1.5 million from $0.07 million in the corresponding period of 2023.
• New Products Remain Critical to Continued Success - In tandem with enhanced marketing efforts focused on increasing awareness of the Dab Bods brand, the Company intends to introduce a minimum of 17 new SKUs to the market through the coming quarters. Leveraging the Company's existing brands and unique products, such as our infused and non-infused Super Slim Cigarette Style Pre-Rolls, the "Electric Dartz", affords a stable platform on which to launch exciting new brands and SKUs.
• Continued Profitability - Adjusted EBITDA¹ totaled approximately $0.5 million, while net income totaled $0.11 million after tax in Q2 2024, representing the tenth consecutive quarter of profitability.
• Cost Management Remains a Sharp Focus - The Company continued to actively manage input expenses and inflationary pressures through negotiations and economies of scale, securing cost savings while increasing operational efficiencies and expanding yields in cultivation and extraction. Cost management plans remain in focus, along with initiatives designed to increase efficiencies, improve cash flow and enhance liquidity.

QUARTERLY HIGHLIGHTS

OUTLOOK

With ongoing year-over-year profitability and cost controls realized to date in Q2 2024, CanadaBis has set the stage to continue delivering positive results by capitalizing on the budding cultivation and wholesale segment, while reinvesting to refresh extract brands and effectively navigate a rapidly evolving, and highly competitive cannabis industry.

The Company has established several competitive advantages to ensure long-term success, which will be leveraged in the ongoing marketing campaign, including offering top-quality extracts derived through our butane hydrocarbon (BHO) extraction process, first of a kind Infused Pre-Rolls and Super Slim Cigarette Style Electric Dartz Pre-Rolls. Investment in new formulations that can meet demand and support the diversification of the Company's product offerings increased in the current quarter, while rising demand from Manitoba for both new and existing products has broadened the market. The Company is pleased to confirm that Dab Bod and High Priestess products continue to attract greater market share reflecting the success of our ongoing marketing efforts.

As a vertically integrated cannabis organization, the Company brings unique insights and the ability to respond swiftly to external factors that may impact selling prices, input costs or shifting customer demands. With an unwavering commitment to strategic capital management, the extensive CanadaBis portfolio will represent a platform on which to support future growth. The Company intends to allocate capital to further develop innovative products that optimally align with consumer preferences, while ensuring strong brand recognition in order to capture increased market share.

The Company remains committed to shareholder value creation, by actively pursuing growth opportunities; remaining agile to react swiftly within a volatile cannabis market; and consistently striving to improve quality and operational standards. CanadaBis looks forward to sharing further updates on our continued progress and success during the second half of 2024, and appreciates the support of all shareholders, the Board of Directors and dedicated employees. 

ABOUT CANADABIS CAPITAL INC.

CanadaBis Capital Inc. (TSXV:CANB) is a vertically integrated Canadian cannabis company focused on achieving large-scale growth, from cultivation to retail, in the fast-emerging global cannabis market. By targeting organic growth opportunities alongside the right-fit partners, we remain focused on finding and capitalizing on chances to grow, diversify and continue to lead our industry.

Our integrated subsidiaries:

• Stigma Pharmaceuticals Inc. – 100% held
• 1998643 Alberta Ltd. (operating as "Stigma Grow") - 100% held; www.stigmagrow.ca
• Full Spectrum Labs Ltd. (operating as "Stigma Roots") - 100% held
• 2103157 Alberta Ltd. (operating as "INDICAtive Collection") -100% held; www.indicativecollection.ca
• Goldstream Cannabis Inc. - 95% held

ABOUT STIGMA GROW

Stigma Grow is a cutting-edge cannabis cultivation and extraction company positioned advantageously to meet the unmet market demands and stigmas within the legal cannabis industry head on, with products designed to disturb the status quo and dramatically shift the conversation surrounding Canada's legal cannabis industry.

CAUTIONARY STATEMENTS

Non-GAAP Measures

This news release contains the financial performance metric of Adjusted EBITDA, a measure that is not recognized or defined under IFRS (a "Non-GAAP Measure"). As a result, this data may not be comparable to data presented by other cannabis companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the MD&A for the three months ended October 31, 2023. The Company believes that Adjusted EBITDA is a useful indicator of operational performance and is specifically used by management to assess the financial and operational performance of the Company.

Adjusted EBITDA is a measure of the Company's financial performance. It is intended to provide a proxy for the Company's operating cash flow and is widely used by industry analysts to compare CanadaBis to its competitors and derive expectations of future financial performance of the Company. Adjusted EBITDA increases comparability between comparative companies by eliminating variability resulting from differences in capital structures, management decisions related to resource allocation, and the impact of fair value adjustments on biological assets, inventory, and financial instruments, which may be volatile on a period-to-period basis. Adjusted EBTIDA is not a recognized, defined, or standardized measure under IFRS. The Company calculates Adjusted EBITDA as net income (loss) and comprehensive income (loss) excluding changes in fair value of biological assets, change in fair value of biological assets realized through inventory sold, depreciation and amortization expense, share-based payments, and finance costs.

Regarding Forward-Looking Information

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include but are not limited to statements with respect to our business and operations; timing of the Sundial products coming to market; the demand and market for live-resin vape cartridges, and our general business plans. Forward-looking statements are necessarily based upon a number of assumptions including: the ability of the Company's products to compete with the pricing and product availability on the black-market; the market demand for the Company's products; and assumptions concerning the Company's competitive advantages. These assumptions, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: compliance with extensive government regulation, the general business, economic, competitive, political and social uncertainties; ability to sustain or create a demand for a product; requirement for further capital; delay or failure to receive board, shareholder or regulatory approvals; the results of operations and such other matters as set out in the Company's continuous disclosure on SEDAR at www.sedar.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements. Investors are cautioned that forward-looking information is not based on historical facts but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although we believe that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have a material adverse effect on our future results, performance or achievements.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE CanadaBis Capital Inc.