Cann Group (ASX:CAN), a prominent player in the Australian medicinal cannabis industry, has announced its unaudited revenue results for the fiscal year 2023, showcasing remarkable growth.
The company expects unaudited operating revenue of approximately $13.5 million, representing a substantial 111% increase compared to the previous fiscal year. This significant surge in revenue is driven by strong market demand, particularly for dried flower products, which witnessed an astonishing 500% growth compared to the previous year.
The exceptional growth in revenue has been primarily fueled by the domestic market, with Cann Group successfully attracting new clients and securing supply agreements with several existing clients.
The company's ability to consistently deliver high-quality, Good Manufacturing Practice (GMP) products from its flagship facility in Mildura has been a key factor in customer acquisition. In the fiscal year 2023, the production output at the Mildura facility reached an impressive 2.2 tonnes. Additionally, in May 2023, Cann Group planted its largest crop to date, representing an annualized yield of 8 tonnes, which is scheduled for harvesting in July 2023.
Expressing his satisfaction with the revenue growth, Peter Koetsier, CEO of Cann Group, emphasized the company's focus on scaling production to meet the increasing customer demand. He highlighted the unique advantage Cann Group possesses in Australia, with the ability to rapidly scale production and capitalize on the surging demand for locally grown and manufactured high-quality cannabis products. Koetsier stated, "With production output increasing at an impressive rate, we have the unique ability in Australia to scale to big volumes right now, and capitalize on the rapidly growing demand for quality, locally grown and manufactured product."
To further fuel its growth trajectory, Cann Group plans to accelerate the scale-up of production over the next 18 months, aiming to achieve efficiencies, improved margins, and strong operating leverage, ultimately leading to EBITDA profitability. The company's strategic plan includes increasing production capacity at the Mildura facility to reach 12.5 tonnes on an annualized basis. This scaling is expected to secure efficiency and margin benefits, positioning Cann Group for sustainable growth and profitability.
In addition to the revenue growth and production scaling plans, Cann Group is hosting an investor update webinar and Q&A session to provide shareholders with insights into the company's growth strategy. This interactive session will offer an opportunity for shareholders to engage with management and gain a deeper understanding of the company's plans and future prospects.
Cann Group, with its headquarters in Melbourne, operates a state-of-the-art large-scale cultivation and GMP manufacturing facility near Mildura, Victoria.
The company supplies a range of dried flower and oil products, as well as active pharmaceutical ingredients and extracts, to customers in Australia and around the world.
With its proprietary Satipharm capsule technology and a commitment to delivering high-quality medicinal cannabis products, Cann Group is well-positioned to capture a significant share of the rapidly expanding Australian medicinal cannabis market.
The Australian medicinal cannabis market is experiencing rapid growth, with an estimated value of $245 million in 2022.
Legislative changes aimed at facilitating access to medicinal cannabis and increasing demand for reliable, locally produced high-quality products are expected to further drive market growth. Cann Group, leveraging its strong competitive advantage, advanced facility, and experienced team, is poised to capitalize on this growing market and deliver long-term value for its shareholders.
