Losses at Cann Group more than doubled in the first half of the 2023 financial year as admin, corporate and R&D expenses all climbed sharply.
The company reported an operating loss after tax of A$18.84 million, up from $8.3m in the previous corresponding period.
More positively, revenue jumped 83% to $5.8m, driven in the main by domestic sales.
Despite the deepening losses, Cann chief executive Peter Koetsier said the company was making “positive progress” in its aim to optimise production efficiencies at Mildura and “building confidence with our customers around the supply of quality medicinal cannabis products in the volume they require”.
“Sales in the December quarter showed strong growth and I expect to be able to build on that growth over the balance of the financial year,” he said. “As we continue to scale up production and secure production efficiencies, this will be reflected in improved margins.”
Initial talks with customers indicate the company has the “opportunity to grow market share in a market that is continuing to expand”, he added
“Our focus is on continuing to streamline operations to secure those scale-based efficiencies and to build profitable revenue.”
During the period, admin and corporate costs totalled almost $17m, up from $11.5m, while R&D costs jumped from $974,000 to $2.6m. Depreciation and amortisation costs further hit the bottom line, rising to $6m, up from $1.2m.
Meanwhile, the full data set from its phase III clinical trial exploring the efficacy of CBD for insomnia will be “reviewed closely” by Cann and Haleon, the consumer healthcare division of GlaxoSmithKline (GSK).
Haleon has 60 days after receiving the final report to decide if it intends to commercialise Satipharm, Cann Group’s over-the-counter CBD hope.
Although trial participants saw benefits from Satipharm, the improvements were not discernibly different to those on the placebo.
Koetsier told Cannabiz last month that Cann Group was not giving up its pursuit of an over-the-counter product to tackle sleep disturbance.
