Cannara Biotech (LOVE) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 results with 19 consecutive quarters of positive Adjusted EBITDA and 13 quarters of positive operating cash flow, driven by premium product launches and disruptive pricing.

• Became the number one licensed producer in Quebec and number seven in Canada by sales, with three flagship brands leading in their categories.

• National retail market share reached 4.1% in Q1 2026, with Quebec leading at 13.5% and continued growth in Ontario.

• Operating at 50,000 kg annual production, with plans to double capacity through a CAD 30 million CapEx plan over three years.

• Net income was $1.0 million for the quarter, down year-over-year due to non-cash fair value adjustments and higher share-based compensation.

Financial highlights

• Gross revenues reached CAD 42.8 million, up 20% year-over-year and 7% sequentially.

• Net revenue was CAD 30.1 million, up 20% year-over-year and 6% quarter-over-quarter.

• Gross profit before fair value adjustments was CAD 13.5 million, up 38% year-over-year and 14% quarter-over-quarter, with a record-high 45% gross margin.

• Adjusted EBITDA was CAD 8.8 million, up 47% year-over-year and 19% quarter-over-quarter, representing a 29% margin.

• Operating cash flow was CAD 8 million, up 36% year-over-year and nearly tripling quarter-over-quarter.

Outlook and guidance

• Plans to double production capacity to 100,000 kg annually through Valleyfield expansion, with phase one of post-processing expected to complete by end of fiscal 2026.

• Three additional grow zones to be cultivation-ready for fiscal 2027 to support anticipated demand.

• Targeting a sustained gross margin of 45%, with potential to reach 50% as efficiencies improve.

• Capital investment strategy prioritizes scaling post-processing and cultivation capacity in line with market demand.

• Confident in demand signals and will scale production in line with market needs, monitoring internal and external indicators closely.