VANCOUVER, BC – C21 Investments Inc., a vertically integrated cannabis company, filed its interim financial statements and management discussion and analysis for its first quarter ending June 30, 2025. The Company’s financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). All currency is reported in U.S. dollars.
First Quarter Highlights (April 1, 2025 to June 30, 2025)
- Revenue of $8.6 million – up 30% year-over-year and up 6% sequentially – driven by continued same store sales growth across all dispensaries; State of Nevada sales were down 14% year-over-year and flat from the sequential comparative periods
- Gross Margin of 35% – up 410 basis points year-over-year
- Income from Operations of $0.2 million – up $1 million from Q1 last year, driven by higher retail sales and lower SG&A costs
- Earnings (Loss) Per Share of ($0.01) – flat year-over-year, primarily impacted by Income Tax provisions; Net Income Before Tax of $0.1 million
- Adjusted EBITDA of $1.1 million – up 244% from Q1 last year
- Free Cash Flow, before working capital changes and taxes, of $0.9 million; $0.8 million Income Tax paid in Q1
- Retail Transaction Growth up 45% from the Q1 last year and 5% sequentially
- Purchased 184,500 common shares for cancellation pursuant to the NCIB
Q1 Management and Operational Commentary
CEO and President, Sonny Newman: “30% revenue growth in Q1 underscores the soundness of our retail strategy and ability to deliver exceptional results in a challenging market. We are pleased with yet another quarter of robust same-store sales growth across all of our dispensaries. Our flagship Sparks store, celebrating its 10th anniversary as Nevada’s first licensed dispensary, reported impressive results with a 5% increase in customer transactions quarter-over-quarter. Our South Reno location continues to outperform, achieving 120% same-store sales growth over its first full year of operations. Despite industry-wide price compression and the decline in overall Nevada state sales, we have delivered sequential revenue growth and another quarter of positive free cash flow. These results reflect the strength of our business model, the capabilities of our team, and focus on operational efficiency. Looking ahead, we remain committed to our long-term goal of sustainable growth.”
- Q1 revenue of $8.6 million was up 30% over the previous year, despite a 14% decline in Nevada sales over the comparative period1. Revenue was up 6% from the previous quarter. Increases were driven by same store sales growth in each of Silver State’s three dispensaries as well as higher wholesale volume.
- Gross Margin of 35% in the first quarter was up 410 basis points year-over-year but down sequentially, impacted by seasonality around 4/20 discounts and an increase in wholesale activity.
- C21 reported Income from Operations of $0.2 million in the first quarter, up $1.0 million from the previous Q1 and down sequentially, primarily due to lower gross margin. SG&A costs were down 3% year-over-year and relatively flat sequentially despite the material increase in revenue.
- The Company reported a Net Loss of $0.8 million in the first quarter, or ($0.01) per share, versus a Net Loss of $1.4 million in the previous first quarter. Q1’s Net Loss was primarily due to Income Tax provisions. The Company generated $0.1 million Net Income Before Tax for Q1.
- Q1 Adjusted EBITDA was $1.1 million, up 244% from the previous Q1 but down sequentially. The increase in Adjusted EBITDA year-over-year was driven by the 30% increase in retail sales, improved gross margin, and lower SG&A costs.
- Q1 Free Cash Flow before working capital changes was $0.9 million, up $1.0 million from the previous Q1 and down sequentially.
- Cash at the end of Q1 was flat from Q4 notwithstanding $0.8 million in Income Tax paid, a $0.3 million debenture principal repayment, and shares purchased for cancellation in the quarter.
Based on legal interpretations and opinions that challenge its tax liability under Section 280E Internal Revenue Code of 1986, the Company has taken the position that it does not owe taxes attributable to the application of this Section of the Code. The Company plans on refiling amended U.S. federal income tax returns for the years ended January 31, 2022, January 31, 2023, January 31, 2024, and the two months ended March 31, 2024. Management exercises significant judgment when assessing the probability of successfully sustaining the Company’s tax filing positions, and in determining whether a contingent tax liability should be recorded and, if so, estimating the amount. See disclosure of Risk Factors in the MD&A.
About C21 Investments Inc.
C21 Investments Inc., based in Vancouver, Canada, is a vertically integrated cannabis company that cultivates, processes, and distributes cannabis and hemp-derived consumer products in the United States. The company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing, and distribution assets in strategic markets, leveraging industry-leading retail revenues with high-growth potential multi-market branded consumer packaged goods. The company owns Silver State Relief and Silver State Cultivation in Nevada, including legacy Oregon brands Phantom Farms, Hood Oil and Eco Firma Farms. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, pre-rolls, cannabis oil, vaporizer cartridges and edibles.
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