MONTREAL, Dec. 23,
2024 /CNW/ - The Good Shroom Co Inc. (TSXV:
MUSH) ("TGSC" or "the Company"), an emerging cannabis company with
a focus on innovation, announces its financial results for the
first quarter of 2025.
Key Financial Metrics
- Revenue (net of excise): $691,382
- Net Income (Loss): ($55,398)
- EBITDA: ($40,553)
- Gross Margin: 33.9%
- Long-Term Debt: TGSC continues to operate without any long-term
debt.
The Company faced a challenging quarter, with quarterly results
reflecting several key factors that impacted performance. TGSC
remains focused on its long-term growth strategy by continuing in
Quebec and focusing on innovations
nationally.
Quarterly Performance: Key Factors
TGSC's refined operations over time, combined with economies of
scale, have allowed the Company to achieve greater efficiency. As a
result, even at reduced revenue levels, the Company is operating
close to breakeven. This demonstrates that significant setbacks,
like those experienced this quarter, are not deeply pernicious for
the Company and underscore its resilience and ability to weather
challenges.
TGSC's main market, Quebec,
operates on a biannual product call system through its cannabis
board. This system means that one underperforming product call can
result in weaker performance across two consecutive quarters. This
was the case for TGSC, as the recent "rationalization" of offerings
by the cannabis board of the province affected the entire market,
including the Company. As a result of this rationalization, TGSC
received a return of $29,622 plus
associated fees and lost sales opportunities during late Q4, Q1 and
early Q2. Despite this setback, it is important to highlight that
this is the first instance of such an outcome in TGSC's history, a
testament to its typically strong performance in the Quebec market. Based on its proven track
record, TGSC expects to rebound with the upcoming product call,
beginning in late Q2 and continuing into Q3.
In addition, the Company experienced a return of traditional
cannabis products from the province of Alberta during Q1 2025. The value of this
return was $35,913 plus associated
return fees. While this return impacted the quarter's results, the
Company plans to redirect these products to the medical cannabis
market and other sales channels, ensuring minimal waste and
optimized revenue streams.
Strategic Response and Future Outlook
TGSC's strategy moving forward is twofold. First, the Company
will continue its established approach in Quebec. Historically, this strategy has
yielded consistent results, and TGSC expects it to continue
delivering, barring rare occurrences like the recent
underperforming product call that impacted two quarters.
Quebec remains a core market where
TGSC has a competitive advantage and strong track record.
Second, the Company is advancing its national expansion
strategy, which excludes traditional cannabis products outside of
Quebec. TGSC's analysis of market dynamics has shown limited
competitive advantage in traditional products beyond its home turf,
as evidenced by the product returns from Alberta this quarter. Consequently, the
Company is focusing nationally on innovative offerings, such as its
THC-infused pouches, branded as DYP's and Deckies. These
innovations are already experiencing a successful launch in
Alberta, reaffirming TGSC's
strategic pivot towards differentiation and growth through
innovation.
Looking forward, TGSC is enthusiastic about the upcoming
launch of THC-infused pouches in Ontario in January
2025. Additionally, the Company expects Q3 2025 to be the
first quarter in which it will have three consecutive months of
ramped-up sales for DYP's in Alberta, following the current high demand and
ongoing ramp-up period. Q3 will also include initial sales data
from the Ontario market, providing
critical insights into the true sales velocity of these innovative
products. This will further solidify TGSC's position in the
market.
While the challenges of late Q4, Q1 and early Q2 have impacted
short-term results, the Company is confident in its ability to
navigate these obstacles and emerge stronger. TGSC's
commitment to innovation, adaptability, and strategic growth will
continue to drive shareholder value and position the Company as a
leader in the Canadian cannabis market.
About The Good Shroom Co. Inc.
The Good Shroom Co Inc. (TSXV: MUSH) is an emerging
cannabis company that sells a variety of traditional cannabis
products and innovations, with its primary market in Quebec but expanding nationally. For more
information, visit
[www.thegoodshroom.co](http://www.thegoodshroom.co).
Website: www.thegoodshroom.co
Disclaimer
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the Policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which constitute
"forward-looking statements" and "forward-looking information"
within the meaning of applicable securities laws, including
statements regarding the plans, intentions, beliefs, and current
expectations of the Corporation with respect to future business
activities and sales. Forward-looking statements are often
identified by the words "may", "would", "could", "should", "will",
"intend", "plan", "anticipate", "believe", "estimate", "expect", or
similar expressions. Investors are cautioned that forward-looking
statements are not based on historical facts but instead reflect
the Corporation's expectations, estimates, or projections
concerning future results or events based on the opinions,
assumptions, and estimates of management considered reasonable at
the date the statements are made. Although the Corporation believes
that the expectations reflected in such forward-looking statements
are reasonable, such statements involve risks and uncertainties,
and undue reliance should not be placed thereon, as unknown or
unpredictable factors could have material adverse effects on future
results, performance, or achievements.
Among the key factors that could cause actual results to
differ materially from those projected are the following: market
acceptance of the Company's products, changes in the Company's
strategy, changes in supplier operations and pricing, expectations
regarding competition and their pricing strategy, maintaining in
good standing all necessary regulatory licenses and authorizations
for its products, the benefits, safety, efficacy, dosing, and
social acceptance of cannabis-related products, and no material
changes in the legal environment. Changes in applicable laws and
regulations, compliance with extensive government regulation, and
operational risks related to COVID-19 or other pandemics and supply
chain disruptions and shortages are also factors.
Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results may vary materially from
those described herein as intended, planned, anticipated, believed,
estimated, or expected. Although the Company has attempted to
identify important risks, uncertainties, and factors which could
cause actual results to differ materially, there may be others that
cause results not to be as anticipated, estimated, or intended, and
such changes could be material. The Company does not intend and
does not assume any obligation to update the forward-looking
statements except as otherwise required by applicable law. Trading
in the securities of the Company should be considered highly
speculative.
SOURCE Good Shroom Co Inc. (The)
