Record revenue with seven consecutive quarters of gross margin improvement leading to record Adjusted EBITDA of $5.5 million, an increase of 161% and positive net earnings

EDMONTON, AB, Aug. 9, 2023 /CNW/ - Nova Cannabis Inc. (the "Company" or "Nova") (TSX: NOVC) today released unaudited condensed interim consolidated financial statements (the "interim financial statements") and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2023. All financial information in this press release is reported in millions of Canadian dollars and represents results from continuing operations, unless otherwise indicated.

NOVA Cannabis Inc. Logo (CNW Group/Nova Cannabis Inc.)

"During the second quarter, Nova achieved positive net earnings, record revenue, gross margin and Adjusted EBITDA as a result of our disciplined pricing strategy combined with expanding proprietary data licensing agreements and private label sales," said Marcie Kiziak, CEO of Nova. "This quarter's results demonstrate Nova's effective execution in positioning the Company for long-term profitable growth. We have been disciplined in our strategy and maintained a sharp focus on our key objectives, and our resolute dedication solidifies our promise to deliver tangible shareholder value. With the added financial and operational scale from the upcoming Nova Reorganization (defined below), we are tremendously excited for the future as we expand our strategy and retail offerings to serve Canadians coast to coast."

The transaction between Nova and SNDL Inc. ("SNDL") to implement a strategic partnership in the cannabis industry (the "Nova Reorganization") was approved by Nova's minority shareholders who are not related parties on May 5, 2023. Completion of the Nova Reorganization remains subject to certain other customary closing conditions, including receiving approval from one remaining provincial regulator. Subject to the satisfaction or waiver of all closing conditions, the Nova Reorganization is expected to be completed on or before August 25, 2023.


  • All-time high revenue of $64.0 million, a 13.7% increase from the second quarter of 2022 and a 6% increase from the first quarter of 2023.
  • Same-store sales for the second quarter of 2023 grew by 38% from the second quarter of 2022.
  • Record gross margin of $14.6 million (22.8% of revenue), a 37.9% increase from $10.6 million for the second quarter of 2022 (18.8% of revenue). Gross margin improvement was driven by price stabilization in the Alberta market, strategic inventory and pricing review, private label initiatives and growth in proprietary data licensing arrangements. These factors contributed to seven consecutive quarters of gross margin improvement.
  • Net earnings of $1.0 million ($0.02 per share) in the second quarter of 2023 compared to a net loss of $1.4 million ($0.02 per share) in the second quarter of 2022. This marks Nova's first quarter of positive net earnings since its inception.
  • Adjusted EBITDA for the second quarter of 2023 of $5.5 million (8.6% of revenue) compared to $2.1 million (3.7% of revenue) for the second quarter of 2022.
  • Nova took proactive steps to optimize its proprietary data licensing program in the first half of 2023. This margin accretive opportunity has resulted in revenue of $2.7 million for the second quarter of 2023, compared to $1.3 million in the second quarter of 2022. Revenue from licensing agreements increased by 73% from the first quarter of 2023.
  • 92 stores operating as of August 9, 2023, a net increase of four stores since the beginning of 2023.
  • Same store sales continue to improve, with average annualized sales of $2.9 million dollars from stores that have been open for at least one year.
  • On April 6, 2023, the Company launched Firesale Cannabis, a new deep discount retail banner that combats industry waste and provides a unique experience for value-conscious shoppers. Firesale's inaugural location opened in Edmonton, Alberta, with more locations expected to open in Alberta and Ontario.
  • Nova's management team ("Management") estimates that its market share was approximately 3.6% in Alberta and 19.9% in Ontario for the second quarter of 2023, based on available industry data1.
  • Value Buds' private label products represented approximately 7% of total 28-gram sales and 18% of 14-gram sales in Value Buds stores nationwide. Private label margins are approximately 5% higher than margins on comparable competitor products.
  • Cash provided by operating activities in the second quarter of 2023 of $2.55 million, a $2.53 million increase from $0.02 million cash provided by operating activities in the second quarter of 2022.
  • Liquidity, including cash and availability under the Revolving Credit Facility (defined below), of $8.5 million as at June 30, 2023.


1 Source: Statistics Canada: Retail trade sales by province and territory as of May 2023.



Certain specified financial measures in this earnings release, including Adjusted EBITDA, are non-IFRS measures and may not be comparable to similar measures reported by other companies. This non-IFRS financial measure should not be considered in isolation or as an alternative for measures of performance prepared in accordance with IFRS.

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure that the Company uses to evaluate its operating performance. Adjusted EBITDA provides information to investors, analysts, and others to aid in understanding and evaluating the Company's operating results in a similar manner to Management. Adjusted EBITDA is defined as loss and comprehensive loss before finance costs; gains and losses on fair value adjustments; depreciation; impairments, lease remeasurements and other costs; and certain one-time transaction costs and restructuring costs, as determined by Management.

The following table reconciles Adjusted EBITDA to net loss and comprehensive loss for the periods noted:

Three months ended
June 30

Six months ended
June 30

(expressed in thousands)





Earnings (loss) and comprehensive earnings (loss)






Finance costs





Net loss (gain) on fair value adjustments










Impairment, lease remeasurements and other costs





Transaction costs (1)


Restructuring costs (2)



Adjusted EBITDA






Transaction costs include expenses incurred in connection with SNDL's acquisition of Alcanna Inc. on March 31, 2022, Nova's former majority shareholders.


Restructuring costs include expenses incurred in connection with the Nova Reorganization.


The Company expects to transition from reporting Adjusted EBITDA to reporting EBITDA on an unadjusted basis following completion of the Nova Reorganization.


Summary of Consolidated Cash Flows

Cash provided by (used in)

Three months ended
June 30

Six months ended
June 30

(expressed in thousands)





Operating activities





Investing activities





Financing activities





Net increase (decrease) in cash






Revolving Credit Facility

Nova has an uncommitted revolving credit facility with SNDL in an aggregate principal amount not to exceed $15.0 million (the "Revolving Credit Facility"). On July 25, 2023, the term of the Revolving Credit Facility was extended to August 25, 2023.

As at August 9, 2023, the full $15.0 million available under the Revolving Credit Facility has been drawn by the Company.


Nova's objective is to be one of the largest and fastest-growing cannabis retailers in Canada. Its goal is to disrupt and solidify the cannabis retail market by promoting a wide range of cannabis products at everyday best-value prices while encouraging greater migration from the illicit cannabis market. The Company's strategy is rooted in the quality of its store footprint and locations, the sales efficiency of Nova stores, and the appeal of the Value Buds brand. Nova remains disciplined and customer focused by choosing the best real estate to execute its strategy – whether through acquiring stores or building its own.

  • Through its partnership with SNDL, Value Buds' private label strategy has been successfully launched in Alberta and Ontario. The private label strategy enables Nova to develop higher gross margin offerings, build customer loyalty and create long-term brand awareness. The private label strategy focuses on keystone segments, specifically large format, uniquely curated for the Value Buds consumer, and drives meaningful differentiation through the retail network.
  • Nova's partnership with SNDL enables the Company to leverage shared services with SNDL, which contributes valuable support to scale key initiatives for an annual fee which is materially lower than the cost of building and operating the infrastructure necessary for Nova to manage those services in-house. This collaboration empowers the organization to access additional resources and expertise, further enhancing our ability to drive success and achieve our strategic objectives.
  • The Company continues its aggressive pricing strategy to capture further market share. Nova has begun adjusting pricing across all categories in different markets to test elasticity and understand consumer buying trends.
  • Nova took proactive steps to optimize its proprietary data licensing program in the first half of 2023, which has no direct associated costs. Data licensing revenue is expected to increase the Company's gross margin by approximately two percentage points in each quarter.
  • Nova has opened or acquired four additional stores in 2023, two in Alberta and two in Ontario. Pending completion of the Nova Reorganization, announced by the Company on December 20, 2022, the Company will acquire 29 additional stores located in Alberta, Ontario, Saskatchewan and Manitoba British Columbia from SNDL's retail network, increasing the Company's store footprint by more than 33%.
  • The completion of the Nova Reorganization is expected to create a well-capitalized cannabis retail platform through a vertical integration model leveraging SNDL's upstream and midstream capabilities. The Nova Reorganization will enable Nova to continue to evolve in a still immature sector by becoming a trusted partner to the Canadian cannabis ecosystem.


Nova will host a conference call and webcast at 10:30 a.m. EDT (8:30 a.m. MDT) on Thursday, August 10, 2023.

Call Access

Canada: 1-800-319-4610
International: +1-604-638-5340

Webcast Access

To access the live webcast of the call, please visit the following link:


The webcast archive will be available for three months via the link provided above.  A telephone replay will be available for one month. To access the replay dial: 

Canada/USA Toll Free: 1-800-319-6413 or International Toll: +1-604-638-9010
When prompted, enter Replay Access Code: 0322# 

For further information, refer to the Company's interim financial statements and MD&A for the three and six months ended June 30, 2023, which are available from the Company's profile on SEDAR+, at, or on the Company's website at


Nova Cannabis Inc. (TSX: NOVC) is one of Canada's largest and fastest-growing cannabis retailers with a goal of disrupting the cannabis retail market by offering a wide range of high-quality cannabis products at every-day best value prices. Nova currently owns and/or operates 92 locations across Alberta, Ontario, and Saskatchewan, primarily under its "Value Buds" banner. Additional information about Nova Cannabis Inc. is available at and Nova's website at


This news release contains forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "continue", "anticipate", "will", "believes", "should", "plan", "intention", "expects", and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to: the Company's expectations regarding its growth and business strategies; Nova's private label strategy; and the Company's ability to successfully launch additional private label offerings; Nova's ability to become one of the largest cannabis retailers in Canada; the Company's ability to increase its market share; the Company's expansion in Alberta, Ontario, Saskatchewan, Manitoba, and other jurisdictions in Canada where it believes there is business efficacy to operate; the satisfaction or waiver of conditions precedent, including key regulatory approvals from applicable provincial regulators and the TSX, required in connection with the Nova Reorganization; the anticipated timing and completion of the Nova Reorganization, including the Company's acquisition of additional cannabis retail stores; and the expected benefits resulting from the Nova Reorganization.

With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the Company's ability to identify locations for, construct and open new stores and the costs related thereto; the availability of hardware and equipment for those stores; government regulation and applicable laws will not change in a manner adverse to the Company; receipt of necessary regulatory approvals to open new stores; the Company's ability to obtain leases for new sites and attract the necessary personnel to operate new stores; demand for the products the Company sells; other factors that will drive sales growth in the Value Buds and Firesale banners, including Nova's private label strategy; availability of acquisition opportunities; sustainability of competitors' businesses and competition in the retail cannabis industry, including from the illicit cannabis market;  consumer demands; and factors that influence consumer behavior.

Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, the risk that Nova will be unable to execute its strategic plan and growth strategy, as planned without significant adverse impacts from various factors beyond its control; business decisions and strategies of SNDL, Nova's direct majority shareholder; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the retail cannabis industry; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in Canada (including Alberta, Ontario and Saskatchewan), and globally; industry conditions, including changes in government regulations; fluctuations in foreign exchange or interest rates; unanticipated operating events; failure to obtain regulatory and third‐party consents and approvals when required; changes in tax and other laws that affect Nova and its shareholders; the Company's ability to complete the Nova Reorganization and to realize the projected benefits; the potential failure of counterparties to honour their contractual obligations; stock market volatility; and the other factors described in the Company's public filings available at Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Nova does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

SOURCE Nova Cannabis Inc.

Copyright 2023 Canada NewsWire

Nova Cannabis (TSX:NOVC)
Historical Stock Chart
From Jan 2024 to Feb 2024 Click Here for more Nova Cannabis Charts.
Nova Cannabis (TSX:NOVC)
Historical Stock Chart
From Feb 2023 to Feb 2024 Click Here for more Nova Cannabis Charts.