JustCBD sales drag Flora Growth’s Q2 revenue down

Flora Growth Corp. (NASDAQ: FLGC) filed its second quarter earnings ending June 30 on Monday, showing a 27% year-over-year revenue decline for its second quarter, despite recent acquisitions in Europe and an improved bottom line.

Revenue for the Florida-based company dropped to $15.7 million for the quarter, down from $21.5 million in the same period last year. In its regulatory filings, Flora Growth attributed the decline primarily to lower sales at its JustCBD brand, which saw revenue fall to $4.4 million from $9 million a year earlier.

The company’s gross profit margin improved slightly to 20% from 18% in the prior-year quarter.

Flora Growth reported a net loss of $2.7 million, versus a $44.6 million loss in the second quarter of 2023. While the net loss improvement is substantial (94%), it’s largely due to the absence of asset impairments and losses from discontinued operations the firm suffered this same time last year, filings show.

“In the second quarter of 2024, we demonstrated an aptitude to make accretive acquisitions and form strategic partnerships to capitalize on the most robust market trends,” CEO Clifford Starke said in a statement. “Our operating expenses and cash flows used in operating activities have decreased notably across the board compared to the prior period.”

During the quarter the company acquired Australian Vaporizers in Australia and launched a joint venture with Althea Group Holdings to enter the U.S. hemp-beverages market. Those come after the Flora Growth in April acquired TruHC Pharma GmbH in Germany.

“TruHC’s licenses allow TruHC to apply for new medical cannabis and cultivation licenses and become an official cannabis test lab for upcoming cannabis social clubs. It also enables international import of seeds and flowers for future distribution,” the company said in a news release.

The TruHC facility features “flexible production space with EU-GMP certified modules,” potentially allowing Flora Growth to expand into various cannabis operations, the company said, which “enables a license extension for a future in country cultivation of medical cannabis and supply of cannabis dispensaries expected to be opened in 2025 during phase 3 of legalization” in Germany.

The company faced headwinds from regulatory actions in Florida, according to filings, where stop sale orders on certain hemp extract products negatively impacted revenue by an estimated $700,000 in the first half of 2024.

Flora Growth ended the quarter with $6.1 million in cash. The company noted in its financial statements that there is “substantial doubt” about its ability to continue as a going concern, citing the need for additional capital to fund operations.