Oregon-based Grown Rogue International Inc. (CSE: GRIN) (OTC: GRUSF) dipped back into the red as of its fiscal fourth quarter this year, when the company reported a consolidated $2.1 million loss for the three months ended Oct. 31.
The losses end a profitable streak for the second-tier multistate operator, which has a footprint outside its home state in Michigan, Minnesota, and Maryland, and it recently entered New Jersey. In the company’s third quarter, it posted a $345,000 net income, and in the second quarter, net income of $412,000.
Despite the losses, the company continued increasing revenue, up 29% to $6.5 million from $5 million for the same quarter a year prior, and had free cash flow of $100,000 even while spending $500,000 on infrastructure in Oregon and Michigan and another $1.2 million on other capital expenditures.
Grown Rogue also saw a seasonal dip in its Oregon outdoor cannabis sales, with numbers down $200,000 sequentially and $500,000 year-over-year.
“We were free cash flow positive for the sixth consecutive quarter, despite a large increase in CapEx this quarter as we accelerate our growth in new and existing markets,” CEO Obie Strickler said in a statement. “We are particularly pleased with the construction progress in New Jersey by our partner and believe it to be one of, if not the highest return on investment in the cannabis space currently.”
Strickler said that looking forward to 2024, the plan is for Grown Rogue to increase its performance even more in its existing markets, continue staffing up and finalizing New Jersey infrastructure, and add at least one other U.S. state to its footprint.
During the quarter, the revenue increase was driven by “our commitment to controlling costs and our focus on producing high quality cannabis products,” Strickler said, noting that Grown Rogue has been the top flower brand in Oregon for 10 consecutive quarters, according to data from LeafLink.
Revenue in Oregon was up 7% year-over-year to $2.9 million from $2.7 million, while revenue in Michigan was up 53% year-over-year to $3.2 million from $2.4 million.
“Our recently released strain specific packaging in Michigan has pushed our pre-packaged product mix to (roughly) 40% of sales,” Strickler said.
Also during the quarter, Grown Rogue closed on another $1 million long-term loan, bringing its total convertible debentures for the year to $6 million, with a total convertible debt load of $6.35 million.
It wasn’t clear on Tuesday what Grown Rogue’s total assets or liabilities were at the close of its fiscal year; its full financial report was not yet available via Sedar.
But as of July 31, Grown Rogue had $27.2 million in total assets, including $8.4 million in cash, against $16.6 million in total liabilities.
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