Today, we are lucky to have Aleafia Health CFO Matthew Sale with us. During the last year, the company has reported impressive growth and we believe the business is flying under the radar and hope this interview can help answer the questions that our readers have.
1. During the last year, Canadian cannabis companies have come under pressure. What are the key issues the Canadian industry is facing? Do you see these factors changing over the next year?
Key factors affecting the Canadian cannabis industry are: excise reform, continued challenges in eradicating the illicit market, and scalable profitability in the face of deep pocketed competition. There are many elements out of the control of Licensed Producers which contribute to whether or not these factors can change in the next year – many of which are in the hands of Health Canada and our leaders in the federal government. Internally at Aleafia, we are doing everything in our control to mitigate these factors and press forward with scalable practices that contribute to the growth of our business.
2. Can you tell our readers about the brand’s assets that are owned by Aleafia Health and what exciting new launches and expansions are underway this year?
In our Divvy portfolio, we are excited to join the concentrates category with our new infused pre-rolls and Afghan-style hash this summer. Infused pre-rolls are the fastest growing product format in Canada and we think Divvy’s generous pre-roll tins are the perfect shareable way to enjoy this high-THC, flavour-forward product format.
3. Earlier this year, Aleafia Health reported third quarter financial results? What metrics or developments do you consider to be the most important for the Company?
We consider our growth toward profitability to be our biggest achievement in this fiscal year, having achieved two consecutive quarters of positive Adjusted EBITDA, however our increased international commitments and continued ability to innovate and remain relevant in the Canadian adult-use market with our flagship Divvy brand are close contenders as well.
Aleafia remains diligent in our mission toward profitability and increased market share leading into our next fiscal year, as well as a couple of things up our sleeves to increase our shelf presence in Canadian licensed retail shops.
4. Can you please tell our readers about Aleafia’s multi-faceted growth strategy?
We have taken a three-pronged approach to growing our business: first, the largest portion of our revenue comes from the Canadian adult-use market, although that is the section of the business that we have the least control over profitability. Which is why we also have our medical business, which provides us with a base of clients that deliver sticky, recurring revenue. In a portion of the market that has shown considerable decline in the past couple of years, our medical branch of the business has remained steady if not growing. Lastly, we have turned our ambitions overseas and begun to ship bulk cannabis to emerging and growing medical markets in Europe and Australia. As these countries look to adult-use legalisation, we have planted the seeds of our brands and products in some key future markets.
5. When it comes to international markets, what countries are generating the most revenue for the company?
Currently Germany, England and Australia are generating the most revenue for Aleafia Health.
6. What are some additional upside opportunities or catalysts for Aleafia Health?
Our outdoor 86-acre farm in Port Perry, one of the largest licensed outdoor facilities in Canada, provides us with low-cost, high-yield input for some of our most popular formats, including milled product and pre-rolls.
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This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws