Sugarbud Craft Growers Corp (OTCMKTS: SBUDF) has filed its unaudited consolidated preliminary financial statements for the quarter and nine months ending September 30, 2021, and associated management’s discussion and analysis.
Change in consumer adoption boosting product sales
CEO John Kondrosky said, “We are very encouraged by the step-change in consumer adoption and product sales we saw in Q3 2021 and believe that the commercial momentum we have generated over the first nine months of 2021 will continue to grow and accelerate into 2022.”
The company reported net revenue of $554,231 in Q3 2021, representing 120% QoQ growth. Sugarbud shipped 156,703 grams of dried flower during the quarter, with net grams sold and invoiced being 135,073 grams representing a QoQ increase of 160%.
Sugarbud continues to develop gross margin leverage despite sustained industry-wide price deflation, thanks to a very rigorous tactic to product pricing, operating efficiency, and internal cost control. In Q3 2021, gross profit before fair market value adjustments was $231,930, up from $57,397 in Q2 2021. The company has a strong gross profit margin of 31% so far this year.
During the quarter, Sugarbud harvested 249,703g of dried cannabis with a yield of 122grams/plant. The company’s targeted and disciplined approach to high-quality, efficient agriculture is gaining traction. Despite increasing net revenue, the company continues to keep general overhead manageable.
Sugarbud Q4 outlook
The company predicts that it will ship 120,000 to 140,000 grams of dried cannabis in the fourth quarter, with revenue expected to be between $750,000 and $850,000.
Kondrosky commented, “In our first 12-months of commercial operations, we believe that our focus on both establishing our efficient, demand-driven operating model and on a high degree of consumer-focused excellence, will ultimately pay dividends for investors. Our view is that the pathway to long term shareholder value is primarily through sustainable consumer adoption of our premium brands, rather than scale and size alone. Based on the feedback and uptake received from our customers, our commitment to exceptional cannabis and total value is most definitely resonating with consumers coast-to-coast.”
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