48North stock is down over 20% today after 48North Cannabis Corp (TSXV:NRTH) (OTCPK:NCNNF) reported disappointing Q4 results for the fiscal year ended June 30, 2019.
48North Cannabis posted its Q4 results after the bell yesterday, reporting revenue of just $0.48 million CAD compared to $0.68 million CAD in the third quarter, which is a loss of nearly 30%. To make matters worse, expenses increased substantially as a result of the company harvesting its outdoor crop during the fourth quarter. While the company did not break its operational costs into a quarterly basis, an examination of the report shows that total expenses of $6.08 million CAD represented an increase of nearly 50% compared to Q3's $4.07 million CAD
Annually, 48North posted total revenue of $4.83 million CAD for the fiscal year, compared to expenses of $15.9 million CAD. The company also posted a net loss of $8.12 million CAD for the year; however, it is worth noting that some of these expenses relate to the ongoing outdoor cultivation process at the company's Good Farm, and so the revenues for this crop will be recorded in the current fiscal year. Investors are struggling to see the upside, as seen by 48North stock's decline today.
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It's not all doom and gloom for the Canadian firm, as CEO Alison Gordon said in yesterday's statement, though: "The past 12-months have been foundational for 48North, the year was spent successfully laying the building blocks for what will result in a leading consumer-focused Canadian cannabis company focused on the development of next-generation cannabis products made possible and reinforced by low-cost cultivation and beloved brands." 48North stock is currently valued at $0.49.
As Gordon alluded to, 48North Cannabis reported some positive operational highlights for the fiscal year. The most substantial of these was the company's acquisition of Good & Green Cannabis Corp, bringing additional production facilities and outdoor cultivation opportunities on its 100-acre farm. Investors in 48North stock can also be assured by the fact that the company also raised over $48 million CAD in capital, bringing cash reserves to $52.7 million CAD and positioning the company to execute its long-term business plan.
What do you think of 48North's Q4 results?
While you're here, you might want to check out our pick of cannabis penny stocks to start your October off the right way!
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