The following is a summary of the Lowell Farms, Inc. (LOWLF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Lowell Farms reported a decline in Q1 2024 net revenue by 35% both sequentially and year-over-year to $4.9 million.

• Their CPG revenue also decreased by 10% sequentially and 11% annually to $4.1 million.

• There was a reported negative gross margin of 17% due to expenses related to the exit from the cultivation facility and reduced volume at the processing facility.

• The company suffered an operating and net loss of $2.9 million with an adjusted EBITDA at negative $1.1 million in the first quarter.

Business Progress:

• Lowell Farms successfully transitioned away from their own biomass harvested at Zabala cultivation site to procuring biomass from the spot market, which led to improved margins and a diverse product offering.

• They are actively monitoring the California cannabis market's significant consolidation as a strategic opportunity.

• Following discontinuation of direct farming operations, the company is exploring subleasing options for effective utilization of additional capacity.

• Their third-party distribution services are experiencing robust demand, with plans to expand the portfolio.

• Lowell Herb Co registered over 42% quarterly growth with their Lowell infused 35's line.

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