Cannabis distributor Humble & Fume Inc. (CSE:HMBL) (OTC:HUMBF) reported its financial and operating results on Wednesday for the first quarter of fiscal 2022, revealing a drop in revenue to $18.1 million from $19.4 million in the corresponding quarter of fiscal 2021.
Humble's Canadian operations saw revenue growth of $8.6 million, representing a 27% increase year-over-year as a result of the expansion of sales agency partnerships, along with higher margin sales from its core accessories business.
"We are encouraged by the strong revenue growth we saw this quarter from our Canadian operations, which was driven by our expanding cannabis brands partnerships and higher margin sales from our accessory portfolio," Joel Toguri, CEO of the Toronto-based company, said.
Q1 2022 Financial Highlights
- Gross profit totaled $4.2 million, which resulted in a gross margin of 23%, compared to $3.2 million, or a gross margin of 17%, year-over-year.
- Adjusted EBITDA came in negative at $1.3 million, compared to $0.8 million loss in the first quarter of last fiscal year.
- Net loss amounted to $1.7 million, or $0.02 per diluted share, compared to a net loss of $4 million, or $0.07 per share, for the prior year's quarter.
- Operating loss of $2.05 million, compared to a $1.6 million loss in the first quarter of 2021.
- Ended the quarter with a cash balance of $6.5 million.
Q1 2022 Operational Updates
- Signed an exclusive sales distribution partnership with TREC Brands Inc., Canada's global premium cannabis brand house.
- Fume Labs launched the cannabis brand FUME in Ontario, Alberta, and British Columbia, Canada. Fume is a cannabis extracts brand delivering a pure and flavorful cannabis experience using a proprietary extraction process that removes terpenes from the plant without the use of solvents.
Post Q1 2021 Updates
- Signed a share purchase agreement to acquire licensed California cannabis distributor Cabo Connection on Oct.19.
- Announced it had completed an $8 million private placement by Green Acre Capital Distribution Corp. to acquire 15.23% of Humble, with an LOI to complete definitive agreements for an additional US$2 million for the formation of a joint venture on Nov, 15
- Announced it will be closing the Florida warehouse facility, effective November 30.
In addition, Humble & Fume also revealed that the president of Canadian distribution and founder of BobHQ, Robert Ritchot, will be retiring and stepping away from his position at the company. Ritchot will continue his role on the board of directors.
"As we head into 2022, I am confident that Humble is well-positioned to continue to bridge the gap between cannabis brands, accessory producers, and the growing retail market in North America," Toguri stated.
HUMBF Price Action
Humble & Fume's shares traded 6.88% lower at $0.4332 per share at the market close on Wednesday.
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