WeedMD Inc (TSXV:WMD) (OTCQX:WDDMF) reported positive second-quarter results yesterday, boosting WeedMD stock during Thursday trading.
For the quarter ended June 30, the company posted record revenue of $8 million CAD, which is a significant increase of 139% from the previous quarter and up 282% for the same period last year. The gains can be attributed to 10 newly-licensed 10,000 sq ft cultivation rooms alongside a 27-acre outdoor cultivation yield. WeedMD stock is up 2% off the back of the earnings report.
Chief Financial Officer Nichola Thompson said of the results, "WeedMD continues to make solid progress and we're proud to post another record quarter that highlights the strength of our operations and the demand for our products. Our gross margins improved to 46% as we realized scale in our cultivation operations and continued optimizing our supply chain."
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The earnings come as a welcome reprieve for WeedMD stock, which has had a bumpy summer. Its current valuation of $1.23 is down nearly 12% from a June peak of $1.29, but recent months have seen the company's shares dip as much as 25% at times. The bumpy summer is indicative of the market's performance in general, but investors in WeedMD stock will be hoping that these earnings, and the arrival of legalization 2.0 in October, will signify a period of upward trajectory.
Other important financial and operational highlights for the company include the sale of 1,979 kgs of dried cannabis, which is an increase of 150% from the previous quarter. Gross profit margin improved by 15% up to 46%, as well as a $15.6 million CAD increase in inventory to $29.5 million CAD. "Consistent product, efficient operations and capital discipline remain our core focus. We are delivering on our commitments to build an industry-leading cannabis production platform with our low-cost outdoor cultivation platform," said CEO Keith Merker.
For investors in WeedMD stock, it's clear that the company is going from strength to strength both operationally and financially. With legalization 2.0 set to boost pot stocks across the board, maybe now is a good time to get in on WeedMD shares?
Featured image: Canva
