MONTREAL — Cannara Biotech Inc., a vertically integrated producer of cannabis products at affordable prices, reported its financial and operating results for the three and nine-month periods ended May 31, 2025.
All financial results are reported in Canadian dollars, unless otherwise stated.
“Fiscal Q3 2025 represents another record-breaking quarter for Cannara, producing records for revenue, gross profit, gross margin, adjusted EBITDA, adjusted EBITDA margin, operating cash flow, and free cash flow, showcasing the successful execution of our long-term business strategy, as well as our industry leadership,” stated Zohar Krivorot, President & Chief Executive Officer of Cannara.
“In addition to our stellar operating results, we have achieved two very significant milestones within our business. First, for the upcoming launch of Québec’s high-demand vape category, the acceptance of 5 Cannara SKUs, pending final procedural steps, representing 20% of all accepted in-store SKUs by the province. Second, the optimization of our cultivation procedures which has resulted in a 26% yield improvement across our facilities, allowing Cannara to achieve our Fiscal 2026 cultivation target a full year ahead of schedule.”
“I would like to sincerely congratulate our commercial and operational teams on their execution, and look forward to delivering on these new opportunities,” concluded Krivorot.
“Our record-breaking financial performance in Fiscal Q3 2025 highlights the strength of Cannara Biotech’s strategy, and our absolute focus on disciplined cost management and evolving operational competencies while continuing to profitably grow the business,” commented Nicholas Sosiak, Chief Financial Officer of Cannara. “Gross profit before fair value adjustments rose 110% year-over-year to $12.1 million in Fiscal Q3 2025, driven by expanded production capacity, higher yields from the Company’s phenohunt program, and ongoing improvements to cultivation techniques. Gross profit margins improved ahead of expectations, rising to 44% in Q3 2025 from 29% a year ago, supported by increased yields, cost optimization efforts, and economies of scale.”
“We delivered our seventeenth consecutive quarter of positive Adjusted EBITDA, generating a record-high of $7.6 million, a 173% increase against the prior year period, underscoring the scalability and profitability of our operations. Operating cash flow surged to a record high of $13.9 million, up significantly from $4.3 million in Q3 2024, and we delivered record-high free cash flow of $11.7 million, up from $1.2 million in Q3 2024. We also secured a reduction in the interest rate on our BMO credit facility, reducing our cost of debt on our credit facility to below 6%.”
“This industry leading profitability profile reflects our extremely focused leadership, best-in-class production facilities, and many inherent competitive advantages within our operating platform, and will allow us to further strengthen our financial position ahead of our significant, low-cost, high ROI opportunities present within our existing footprint.” concluded Sosiak.
Fiscal Q3 2025 financial highlights
Q3 2025 vs Q3 2024 Comparable Period Highlights
- Gross cannabis revenues before excise taxes increased to $37.8 million in Q3 2025 from $26.2 million in Q3 2024, a $11.6 million or 44%, increase. The increase is attributable to increased market penetration in existing markets, entry into new markets and the addition of new genetics and products in its portfolio increasing overall sales generation;
- Total revenues, net of excise taxes, increased to $27.3 million in Q3 2025 from $19.5 million in Q3 2024, a $7.8 million or 40% increase;
- Gross profit before fair value adjustments rose to $12.1 million in Q3 2025, up 110% from $5.7 million in Q3 2024. This strong growth was driven by expanded production capacity following the activation of the 10th grow zone in Q1 2025 and the 11th and 12th grow zones in Q3 2025. In addition, continuous enhancements to cultivation practices significantly improved operational efficiency and boosted yields, which was also supported by the Company’s pheno-hunt program, which identified higher yielding genetics;
- Gross profit percentage before fair value adjustments increased to 44% in Q3 2025 from 29% in Q3 2024, driven by increased production capacity as well as cultivation and post-processing operational improvements and optimization;
- Operating income reached $6.8 million in Q3 2025, compared to an operating income of $3.6 million in Q3 2024. The improvement was driven by higher sales, lower production costs, which was partially offset by higher sales and marketing expenses year-over-year;
- Net income before income tax was $5.8 million in Q3 2025, compared to $2.0 million in Q3 2024. This marks a positive milestone and underscores the continued success and profitability of the Company;
- Adjusted EBITDA increased by 173%, from $2.8 million in Q3 2024 to $7.6 million in Q3 2025;
- The Company generated operating cash flow of $13.9 million in Q3 2025, compared to $4.3 million in Q3 2024;
- Free cash flow for Q3 2025 increased by $10.5 million, from $1.2 million in Q3 2024 to $11.7 million in Q3 2025 ;
- Generated earnings per share of $0.05 in Q3 2025 compared to $0.02 in Q3 2024.
Q3 2025 YTD vs Q3 2024 YTD Highlights
- Gross cannabis revenues before excise taxes rose to $109.5 million for the year-to-date period ending Q3 2025, up from $78.8 million in the same period in 2024, an increase of $30.7 million or 39%. This growth reflects deeper market penetration across existing provinces, successful entry into new markets, and the expansion of the Company’s product portfolio through the launch of new genetics and SKUs that have strengthened sales performance;
- Total revenues, net of excise taxes, increased to $79 million in Q3 2025 YTD from $58.7 million in Q3 2024 YTD, a $20.3 million or 35% increase;
- Gross profit, before fair value adjustments, increased to $32.7 million in Q3 2025 YTD from $20.8 million in Q3 2024 YTD, a $11.8 million or 57% increase. This increase is attributable to increase production capacity combined with the efficiencies generated from the scale of the operations and various improvements in operations from cultivation to post processing;
- Gross profit percentage before fair value adjustments in Q3 2025 YTD was 41% an increase of 6% compared to 35% in Q3 2024 YTD reflecting our capabilities in economies of scale;
- Operating income of $16.9 million in Q3 2025 YTD compared to an operating income of $5.0 million in Q3 2024 YTD, due to increase in sales and reduction in production costs offset by increased sales and marketing costs compared to the prior year period;
- Net income before income tax was of $13.6 million in Q3 2025 YTD compared to net income of $0.7 million in Q3 2024 YTD;
- Adjusted EBITDA increased by 81 %, from $11.4 million in Q3 2024 YTD to $20.7 million in Q3 2025 YTD;
- The Company generated operating cash flow amounting to $17.2 million in Q3 2025 YTD compared to $7.5 million in Q3 2024 YTD;
- Free cash flow for Q3 2025 YTD increased by $11.8 million, from $0.5 million in Q3 2024 YTD to $12.3 million in Q3 2025 YTD;
- Generated earnings per share of $0.11 in Q3 2025 YTD compared to earnings per share of $0.01 in Q3 2024 YTD.
Fiscal Q3 operational highlights
Capacity Expansion and Yield Optimization
During the quarter, the Company maintained a strong focus on execution, scaling its operations and supply chain to support continued growth in sales and market share across Canada. As part of its 2025 expansion plan, Cannara advanced the activation of two additional grow rooms at its Valleyfield facility. These rooms came online in May and June 2025, adding 50,000 sq. ft. of additional capacity. In parallel, the Company achieved a major operational milestone by optimizing its cultivation cycle time through its ongoing and extensive research and development efforts. These improvements increased both yield and harvest frequency, enabling Cannara to increase its production capacity from 39,500 kg to 50,000 kg annually reaching its Fiscal 2026 production target one year ahead of schedule, while maintaining a disciplined, margin-focused growth strategy.
While the Valleyfield Facility has only realized half of its full 24-zone capacity, the Company’s strategy is to scale production gradually, in line with market demand, rather than pursuing rapid volume growth at the expense of profitability. This disciplined approach, coupled with investments in sales and marketing, positions Cannara to strengthen brand recognition and loyalty across its three flagship brands — Tribal, Nugz, and Orchid CBD — while protecting margins in an increasingly competitive landscape.
Quebec Vape Category Launch
Following the SQDC’s recent announcement to open the vape category in Quebec starting November 2025, in July 2025, Cannara secured approval, pending final procedural steps, to launch 5 live resin and rosin vape cartridges formulated to deliver a full-spectrum experience, without fillers or distillate and while remaining under 30% THC. These products are planned for full provincial retail rollout at SQDC stores and online at SQDC.ca in November 2025 (Q1 2026).
Capital transactions and other events
During Q3 2025, the Company granted 100,000 stock options at an exercise price of $1.25 and 84,400 stock options at an exercise price of $1.80 to employees subject to certain vesting and conditions in accordance with the Company’s employee share option plan. The Company also granted 22,500 RSUs without performance conditions and exercisable for no consideration, which will vest in 2 years, to a board member.
Subsequent to quarter-end, the Company granted 7,500 stock options at an exercise price of $1.80 to employees subject to certain vesting and conditions in accordance with the Company’s employee share option plan and expiring in 7 years.
About Cannara
Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) (FRA: 8CB0), is a vertically integrated producer of affordable premium-grade cannabis and cannabis-derivative products for the Canadian markets. Cannara owns two mega facilities based in Québec spanning over 1,650,000 sq. ft., providing the Company with 100,000 kg of potential annualized cultivation output. Leveraging Québec’s low electricity costs, Cannara’s facilities produce premium-grade cannabis products at an affordable price.
