Cannara Biotech (OTCPK:LOVF.F) 2025 Conference Transcript

Cannara Biotech Conference Summary Company Overview - Company Name: Cannara Biotech Inc. - Stock Symbol: LOVE (TSXV) - Industry: Canadian Cannabis - Founded: 2018 - Headquarters: Quebec, Canada - Facilities: Operates over 1.6 million square feet across two fully owned facilities in Quebec [2][5] Core Business and Market Position - Cannara Biotech is a vertically integrated cannabis company focused on producing premium-grade cannabis at scale, emphasizing profitability, innovation, and long-term value creation [2][4] - Currently the seventh largest producer in Canada by sales and second largest in Quebec, with a 12.8% market share in Quebec, up from 9.7% a year ago [5][17] - Annualized production run rate is approximately 50,000 kilograms (50 million grams) [5][6] Financial Performance - Q3 2025: Best quarterly financial results in the company's history - Nine months of 2025: - Net revenue: $80 million - Gross profit: $32.7 million - Gross margin: 41%, with steady quarter-over-quarter increases [9][10] - Adjusted EBITDA: $20.7 million (26% of revenues) [10] - Net income: $9.8 million, a 53% increase from the previous year [10] - Cash Flow: Generated $17.2 million in operating cash flow and $12.3 million in free cash flow in the first nine months of 2025 [11] Operational Highlights - Achieved a 26% increase in capacity over the past year without additional capital costs [6][9] - Vertical integration allows full control over the cannabis supply chain, enhancing quality and efficiency [7][24] - Upcoming launch of a new vape category in Quebec, with 20% retail shelf space already secured [8][17] Competitive Advantages - Strong operational platform with a focus on premium quality, scalable operations, and cost leadership [8][9] - Access to Quebec's low electricity rates of $0.059 per kilowatt, significantly lower than other provinces [26] - High barriers to entry in Quebec due to strict regulations on sales and marketing, allowing Cannara to thrive without heavy promotional activities [26][27] Strategic Initiatives - Plans for a $10 million investment in a new dedicated processing center to support growth and expand capacity to 100,000 kilograms annually [16][24] - Focus on internal growth rather than external acquisitions, emphasizing operational discipline and quality [25][27] Market Trends and Outlook - The Canadian cannabis market is experiencing a shift, with a 41% surge in estimated retail sales year-over-year, positioning Cannara as a leader in growth [16][17] - The company is well-prepared to meet unserved demand and capitalize on upcoming market opportunities, particularly in the vape segment [8][17] Conclusion - Cannara Biotech is positioned as a dominant player in the Canadian cannabis market, with a strong financial performance, operational efficiencies, and a clear growth strategy focused on quality and innovation [2][9][27]