Cann Group reported deepening operating losses of almost A$34 million in FY23, up 28% on the previous year, despite more than doubling sales.

Revenue jumped 115% to $13.8m, with total revenue including government grants and tax incentives rising to $21.7m.

Sales of inhalable flower during the year climbed 500%.

Cann Group said the growth was driven by domestic sales, with the increased capacity and certainty of supply at its Mildura facility helping to grow its customer base.

But the scale of its losses raised questions, with independent auditor William Buck warning there was “material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern”.

Cann Group CEO Peter Koetsier

In addition to the overall loss, net cash outflows hit $22.9m while the group had a net working capital deficiency of $32.m.

Chief executive Peter Koetsier has previously defended the firm’s financial position.

He said the company has made “considerable progress” during FY23, including completion of Mildura.

“This state-of-the-art facility represents a substantial investment and an asset that must be fully utilised to capitalise on its capabilities and production efficiencies,” he said. “As we continue our growth towards 12.5 tonne optimal capacity, we expect Cann Group to prove to be a globally competitive and profitable business.

“The company is now focused on scaling production of its high-quality portfolio, as well as fully resourcing our sales and marketing in an effort to quickly build revenue.”

Cann Group said its latest harvest equated to an annualised production of eight tonnes, and was 17% ahead of target, with the “ultimate desire” to achieve annualised production of 12.5 tonnes in FY25.

In its annual report, the company said its “confidence” in achieving profitability comes from the “strong revenue growth across FY23, coupled with scaled increase in annual yield occurring with many fixed costs within the Mildura facility”.

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...

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