TORONTO - Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) ('Heritage' or the 'Company'), today announced its financial results as at and for the three-month period ended January 31, 2023.
'In a traditionally slow period, we are very pleased to have achieved gross margin growth - evidence our continued focus to lower our operational costs has been effective. Even with a number of our achievements expecting to positively impact our operations in the coming months, such as our Thrifty brand launch and U.S. investments, we are continuing to remain focused on cost management while improving our market penetration in our core markets', said David Schwede, CEO of Heritage. 'While this past quarter we saw provincial pricing that negatively impacted our results, we feel the majority of this reset is now behind us and we can focus on continued growth by leading in market innovation, focusing on growing our entire portfolio of in-demand products. With our U.S. strategy ramping up and early indications showing positive results ahead of expectations, we are well positioned to see an up-trend in the business in 2023.'
Q1 2023 Financial Highlights
The Company reported gross revenue of $9,446,995 for the three months ended January 31, 2023, a decrease of $149,146 compared to the gross revenue of $9,596,141 for the three months ended January 31, 2022. The decrease in gross revenue was primarily due to negative pricing movements in the period by the provincial boards which impacted the results by over $125,000.
Cost of sales for the three months ended January 31, 2023 was $4,272,251, a decrease of $384,199, compared to $4,656,450 for the three months ended January 31, 2022. The decrease represented a 3% improvement, as a percentage of sales, in the current period. The improvement was a result of a continued refinements to enable more efficient production.
Gross margin for the three months ended January 31, 2023 was $2,051,161 compared to gross margin of $1,884,761 for the three months ended January 31, 2022. The increase of $166,400 was primarily a result of improved production efficiencies which were partially offset by a higher excise percentage which increased to 33.1% from 31.8% in the prior period. This was driven by a reduction in provincial board pricing previously mentioned.
For the three months ended January 31, 2023, the Company recorded a comprehensive loss of $2,762,960 or $0.00 loss per share compared to a comprehensive income of $6,257,213 or $0.01 income per share for the three months ended January 31, 2022. The increase in losses during this period were attributable to the prior period benefiting from unrealized gains which more than offset the improved operational performance by the Company in the current period.
About Heritage Cannabis Holdings Corp.
Heritage Cannabis is a leading cannabis company offering innovative products to both the medical and recreational legal cannabis markets in Canada and the U.S., operating under two licensed manufacturing facilities in Canada. The company has an extensive portfolio of high-quality cannabis products under the brands Purefarma, Pura Vida, RAD, Premium 5, Thrifty, feelgood., the CB4 suite of medical products in Canada and ArthroCBD in the U.S.
Forward-Looking Statements
This press release contains certain 'forward-looking information' within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute 'forward-looking statements' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as 'plans', 'expects' or 'does not expect', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate', or 'believes', or variations of such words and phrases or may contain statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'will continue', 'will occur' or 'will be achieved'. The forward-looking information contained herein may include, but is not limited to, assumptions related to cash flow and capital resources, and expectations related to the supply and manufacturing agreements, the intended expansion of the Company, and partnerships and Joint Venture Partnerships.
By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.
An investment in securities of the Company is speculative and subject to several risks including, without limitation, the risks discussed under the heading 'Risks and Uncertainties' in the Company's annual management discussion and analysis for the year ended October 31, 2022, and dated February 28, 2023. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.
Contact:
Kelly Castledine
Tel: 647-660-2560
Email: kcastledine@heritagecann.com
HERITAGE CANNABIS HOLDINGS CORP. 
