The firm has reached a number of key milestones including achieving the first harvest from its new facility in Nevada and expanding cultivation and manufacturing at the California operation
1933 Industries Inc () (OTCQX:TGIFF), the cannabis goods company, said its expectations for strong revenue growth and profitability for fiscal 2021 remain on track as it posted its second-quarter numbers for 2020.
In the three months to January 31, the firm revealed it reached a number of key milestones including achieving the first harvest from its new facility in Nevada and expanding cultivation and manufacturing at the California operation under a deal with Green Spectrum Trading.
It also debuted its subsidiary AMA brand of THC concentrates and those of licensing partner Blonde into the California market.
READ: 1933 Industries marks the beginning of continuous cultivation in Nevada with second cannabis harvest underway
The quarter saw lower than expected revenue due to reduced sales for its cultivation arm as the group transitioned from the old facility to the new one and a slower than expected recovery of vape and distillate sales.
Thus, revenue was C$3.1 million, 20% lower than the previous quarter, and 15% down on the second quarter of fiscal 2019. The group's net loss came in at C$6.4 million for the three months, compared to a net loss of C$2,9 million in the same quarter of 2019.
"Our focus has been to bring our assets into continuous production in order to lower our costs of production and improve our margins," 1933's CEO Chris Rebentisch noted in the results statement.
He added: "We have made significant progress in achieving this and we are now witnessing the results of these efforts in the first two months of our third quarter."
1933 told investors it had implemented cost-saving measures across its operations and remains committed to reducing overhead expenses.
During and subsequent to the reporting period, the firm has reduced its workforce by 24%, decreased expenses related to operating as a public company by 68%, and decreased other non-operating expenses by 24%.
It has a strong cash position, the group said, with a balance of $9.1 million available for on-going operations.
The outlook for the rest of fiscal 2020 is for limited revenue growth, 1933 added, as the company adapts to current market conditions, including the ongoing coronavirus crisis, for which it’s is taking "prudent measures" to weather the economic environment.
"By implementing sound, disciplined and prudent financial measures, we are confident that the current cash position will sustain the company until market conditions improve, affording us the longevity that is necessary to achieve future growth. Our projections for a significant increase in revenue growth and profitability remain unchanged for fiscal 2021," the company said.
The firm's award-winning proprietary portfolio of brands include AMA flower and AMA concentrates as well as CBD-infused Canna Hemp, Canna Hemp X, and Canna Fused products.
1933 owns 91% of Alternative Medicine Association, LC (AMA), and 100% of Infused MFG LLC. It continues to focus its operations in the licensed US cannabis industry as a multi-state operator in Nevada, Colorado and California.
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