Ottawa-based CannaRoyalty’s early investments in the burgeoning California cannabis market started paying off this quarter, with further growth expected to come from the company’s acquisition pipeline.
CannaRoyalty (CSE:CRZ) recorded revenues of $3.5 million for the quarter ending June 30. That’s an increase of 265.7 per cent year-over-year and 445.1 per cent quarter-to-quarter.
While the company is technically based in Ottawa, the cannabis investment vehicle’s holdings are primarily based in California. It has spent the past couple of years laying foundations in the state’s lucrative cannabis market, and this past quarter’s results reflect its production and distribution operations coming online.
"Q2 marked a turning point for CannaRoyalty and its shareholders as the team translated strategy and execution into record financial performance,” said CEO Marc Lustig in a statement.
He added that he expects this quarter-to-quarter growth trend to continue, citing two more California acquisitions that either have already closed or are expected to close later this quarter. The company also recently raised funds through a private placement and noted in a release that future acquisitions are in the pipeline.
CannaRoyalty also recorded $9.3 million in net income for the quarter. These earnings follow a fair value accounting change connected to the sale of a CannaRoyalty investee to Aurora Cannabis last month. That acquisition closed a few weeks ago, and while the fair value change resulted in a $15.3-million income boost in Q2, next quarter will see an associated loss.
Without the fair value accounting change, CannaRoyalty would have posted a loss of roughly $6 million this past quarter.