Cannabis consumer packaged goods company, SLANG Worldwide Inc.(CSE:SLNG) (OTCQB:SLGWF) released its financial results Thursday for the first quarter ended ended March 31, 2024. The Toronto-headquartered company announced revenue of CA$7.03 million ($5.13 million), down from CA$10.8 million.
The company attributed revenue declines to increased competition in recreational cannabis stores in core markets in Vermont and Colorado, offset by increases in its wholesale channel in Vermont and a decline in the overall cannabis market in Colorado.
"Our results for the first quarter demonstrated the importance of SLANG's diversified strategy as well as our commitment to our disciplined, efficient business model," stated John Moynan, chief executive officer of SLANG. "While we saw softness in our Core Markets in the first quarter, we mitigated the impact on our business with increased sales in our newer, higher-margin e-commerce channel, our Vermont wholesale channel and across our Emerging Markets, and by reducing operating expenses sequentially and year-over-year, driving operational efficiencies across most segments of our business.
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Q1 2024 Financial Summary
- Gross profit of CA$3.36 million (48% gross margin) in Q1 2024, compared with CA$5.72 million (53% gross margin) in Q1 2023, representing a 41% decrease in gross profit and a 5% decrease in gross margin year-over-year.
- Operating expenses of CA$5.54 million in Q1 2024, compared with CA$5.78 million in Q1 2023 and CA$6.63 million in Q4 2023, representing a 4% decrease year-over-year and 16% decrease quarter-over-quarter.
- Adjusted EBITDA was a loss of CA$1.06 million in Q1 2024, compared with a gain of CA$742,000 in Q1 2023.
- Total comprehensive loss amounted to CA$6.02 million, which compares to a loss of CA$2.33 million in Q1 2023.
- The company had CA$8.32 million in cash and restricted cash on March 31, 2024, compared to CA$9.04 million on December 31, 2023.
Q1 2024 Operational Highlights
- Vermont Q1 2024 wholesale sales were CA$310,000, compared to CA$60,000 in Q1 2023.
- During Q1 2024, SLANG signed an agreement with a new distribution partner to sell its Alchemy Naturals CBD gummies throughout the United States.
"During the quarter, our new channels continued to increase their contribution to our overall sales. Revenue from our e-commerce business segment increased by approximately 45%, demonstrating the strength of our Alchemy Naturals CBD gummy product line, and our Vermont wholesale sales channel increased by approximately 417% year-over-year," Moynana continued. "Looking ahead, we believe we will continue to elevate our market position and build our leadership position in these important cannabis product categories."
Price Action
Slang shares traded 7.32% lower at $0.02 per share at the time of writing Thursday morning.
Related link: Cannabis CPG Co. SLANG Worldwide Narrows Q4 Loss By 56% YoY, Reports Dip In Revenue
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