Aleafia Health Reports Q4 2021 Financial Results with $11.5 Million Branded Cannabis Gross Revenue, representing a 103% Increase from 2020

  • Transforming business towards a branded cannabis provider, with branded revenue representing 80% of total net revenue in 2021 compared to 33% in 2020 
  • 96% increase in branded cannabis net revenue to $28.7 million in 2021 from $14.6 million in 2020  
  • 396% increase in adult-use net revenue to $16.0 million in 2021 from $3.2 million in 2020 
  • 60% increase in branded cannabis net revenue to $8.3 million in Q4 2021 from $5.2 million in Q4 2020 
  • 33% increase in medical cannabis net revenue to $10.6 million in 2021 from $8.0 million in 2020 
  • Consolidating medical market share with 17% growth in scripts in 2021 relative to 23% overall market decline  
  • Average THC potency of 22% with up to 27% levels achieved in record-breaking outdoor harvest 
  • Projecting Adjusted EBITDA Profitability during the Second Half of 2022 

Aleafia Health Inc. (TSX: AH, OTCQX: ALEAF) (“Aleafia Health” or the “Company”) is pleased to report its financial results for the three and 12 months ended December 31, 2021. The Company’s 2021 unaudited, consolidated financial statements and management discussion and analysis for the fourth quarter and 12-month periods will be available in the Investors section of the Company’s website at and will be filed on SEDAR and available at   

“The core strategic objectives that will drive Aleafia Health to sustained profitability reflect a pivot to focus on branded cannabis revenue. Branded revenue is comprised of ‘sticky,’ recurring medical revenue at attractive gross margins and robust growth in adult-use cannabis revenue where Aleafia continues to aggressively take market share,” said Aleafia Health CEO Tricia Symmes. “We are focused on achieving Top 10 in total LP market share in 2022, driven by leadership in the value cannabis category. Aleafia’s five cannabis brands span the spectrum from premium and craft flower to the value category with Divvy, where we already enjoy significant leadership. The company’s market share rose from 30th in Q1 2021, when we launched our House of Brands, to 15th in Q4 2021, representing the third highest change in market share rankings out of 40 Canadian Licensed Producers (“LPs”).(1) Q4 retail sales increased 37% relative to Q3. Our Divvy value brand is consistently among the top searched brands at the Ontario Cannabis Store website.”  

“In 2021, the total net revenue of $36.1 million represents a highly diversified sales mix. Driven by robust growth in adult-use and medical sales, these two sales channels represented 80% of total net revenue, a complete turnaround from 2020, where bulk-wholesale product represented 67% of total net revenue,” Symmes added. “This is just the beginning, and we are very excited about the future. A record-breaking outdoor harvest that produced average THC potency of 22% allows us to direct this flower into the adult-use market, delivering significantly higher net margin per gram than the bulk wholesale channel. With our highly competitive THC levels, the quality of the brand is the company’s competitive advantage in the value category, and by focusing on the top performing high margin products through portfolio optimization, we are poised to achieve breakeven adjusted EBITDA profitability in the second half of 2022.”   

“Aleafia Health’s revenue is driven by three strong business lines: its CPG branded adult-use portfolio, where we aim to enjoy a Top 10 overall market share position, which currently generates $24 million annualized run-rate net revenue, with significant momentum in the first 6 weeks of 2022; leadership in medical cannabis with its highly recurring $10 million annualized run-rate net revenue, and a 17% increase year over year in script counts; and international sales, where we are well positioned in three countries, Germany, the UK and Australia, and have developed partnerships with key established European supply distributors.  

Our Sunday Market House of Brands achieved 396% growth year over year and is anchored around our hugely successful everyday Divvy brand, we have moved strongly ahead into categories that consumers want and are providing the innovative products and a value proposition that they demand.”   


  • Net revenue was $36.1 million for the 12 months ended December 31, 2021 (“2021”), compared to $44.5 million in the 12 months ending December 31, 2020 (“2020”). For the three months ended December 31, 2021 (“Q4 2021”), net revenue was $8.8 million, compared with $15.2 million in Q4 2020. The decline in net revenue was based on shifting from lower margin, higher volume bulk wholesale commodity cannabis revenue to higher margin, higher potency and innovative adult-use products, offering a unique value proposition. The Company’s branded cannabis revenue includes its “sticky” medical sales and market share consolidating branded adult-use cannabis products along with its burgeoning international sales.  
  • Branded cannabis net revenue increased 96% to $28.7 million in 2021 compared to $14.6 million in 2020, and increased 60% to $8.3 million in Q4 2021 compared to $5.2 million in Q4 2020, largely attributable to the launch of the Sunday Market House of Brands, which enjoyed 396% growth in 2021 compared to 2020, anchored around Divvy, the everyday brand focused on potency and an exceptional value proposition. Aleafia delivered the top 3 out of 40 Canadian LPs in market share rank increase from Q1 2021 (#30) to Q4 2021 (#15).(1) 
  • Adult-use net revenue increased 396% to $16.0 million in 2021 compared to $3.2 million in 2020, and increased 326% to $6.0 million in Q4 2021 compared to $1.4 million in Q4 2020. Sales velocity continues to accelerate driving market share capture with 37% retail sales pull through in Q4 2021 relative to Q3 2021.(2) 
  • Medical cannabis net revenue increased 33% to $10.6 million in 2021 compared to $8.0 million in 2020, driven by strong ordering patterns from its flagship Emblem cannabis brand. Script count increased 17% year over year, to 37,779 in 2021 compared to 32,191 in 2020. The patient base grew 13% to 19,700 in 2021 from 17,400 in 2020. In 2021, the Company onboarded four unionized employers through its exclusive partnership with Unifor, Canada’s largest private sector union, with more than 515,000 members and retirees across the country. The highly scalable new patient onboarding platform is well-positioned to accelerate patient uptake. The Company will continue pursuing its recurring revenue base in which patients receive reimbursement for medical cannabis. 
  • Bulk wholesale net revenue declined 75% to $7.4 million in 2021 compared to $29.9 million in 2020, which was offset in part by strong growth in branded cannabis revenue. This was driven by the Company’s redirection of its cultivation flower from the bulk wholesale sales channel towards its higher net revenue per gram branded cannabis products.  
  • The Q4 2021 outdoor harvest delivered over 11,600kg of high potency saleable flower with THC levels averaging 22%.  The Company plans to primarily utilize this product in the first half of 2022 in its adult-use branded cannabis products.  
  • Total gross profit fair value adjustments and inventory provision was 31% in Q4 2021, compared to 59% in Q4 2020, primarily due to the Company’s pivot away from bulk-wholesale towards branded cannabis products that deliver higher overall net margin per gram.   


In 2021, the Company transformed its business to become a branded cannabis provider. It has produced high potency flower at its Port Perry outdoor growth facility, allowing it to direct that product to higher margin, adult-use products. It has engaged with the consumer and attracted a top executive sales and marketing team, with an internal sales force, that understands the CPG marketplace, what consumers want and is focused on the need to drive value to secure loyal customers and drive and maintain market share. Higher THC levels as well as the lower cost of input materials has allowed the Company to significantly increase its market share. Other developments include: 

  • Branded Cannabis Represented 80% of 2021 Total Net Revenue: The Company launched 37 new SKUs since Q4 2020 and built five cannabis brands spanning value to premium, craft. Divvy, an everyday consumer value brand, is consistently a top searched brand on Twelve new product formats were launched in 2021 including: Craft Dried Flower, Milled Flower, 1g Distillate Vapes, Live Resin Vapes, Live Resin Diamond Sauce, Salted Caramel Pretzel Bites, Cluster Pucks, HotSauce, Omega CBD Soft Gels, Bath Bombs, Freshly Minted Roll-Ons and Topical Creams. 
  • Significant Increase in Adult-Use Market Share: The Company is aggressively capturing market share. It achieved a top 3 market share rank increase among 40 Canadian LPs in the Q1 2021 (#30) to Q4 2021 (#15) period, based on HiFyre data. Its 37% increase in retail sales pull through from Q3 2021 to Q4 2021 placed it among the top 10 Canadian LPs. The Company’s market share increased from 0.3% in Q1 2021 to 2.0% in Q4 2021. Over this period, the Company delivered strong retail sales pull through in each of the three major categories, with flower increasing approximately 1,400%, pre-roll increasing approximately 1,000% and vape increasing approximately 200%. The Company enjoys 94% penetration at the retail store level in Ontario and 84% in Alberta, and has supply agreements with Saskatchewan and British Columbia. 
  • Medical Ecosystem Expanded: The Company onboarded four unionized employers in 2021 through its exclusive Unifor partnership. These employers represent less than 5% of the Unifor member base and the Company continues to focus on additional onboardings.  Despite restrictions on interacting directly with potential patients due to Covid-19, the Company experienced modest growth in both Unifor-based patients and sales from Q3 2021 to Q4 2021. The Company saw scripts increase 17% year over year, driven primarily by continued onboarding of third-party clinics which represented a largely reimbursed patient base comprising approximately 55% of total medical sales in Q4 2021. The Company launched tailored programs targeted at the Veteran medical demographic and entered the Quebec market.  
  • International: The Company successfully saw its products exported into three countries Germany, UK and Australia in 2021. The Company established partnerships with key European suppliers and wholesalers to facilitate a ramp-up in pull-through into the European market in 2022. 
  • Cultivation: The Company owns three licensed cannabis production facilities and operates a strategically located distribution centre all in the province of Ontario, including in Port Perry the first large-scale, outdoor cultivation facility in Canadian history. Port Perry delivered over 11,500 kg of flower with average THC potency of 22% in 2021. THC levels ranged from a record-breaking 21-to 27% and the terpene profile was outstanding, ranging from 2.7% to 5.7%.  
  • Cost Rationalizations: The Company methodically reviewed its cost structure and optimized its talent and resources towards the sales channels which delivered the highest net realizable margin per gram of flower sold – its branded cannabis products. The Company initiated headcount reductions in Q4 2021, representing approximately 10% of the workforce and approximately $1.9 million in annualized savings. The Company has undergone a SKU optimization to align its portfolio on best-selling product formats with the strongest margin profile. The Company is in the process of integrating its virtual, physical and third-party clinic platform which is expected to generate additional operating expense savings. The Company reviewed its inventory and fixed assets and identified certain slow-moving assets primarily related to the bulk wholesale sales channel. As a result of the Company’s pivot towards focusing on branded cannabis products, the Company recorded a $19.6 million inventory provision.  The Company also recorded a $28.8 million impairment of property, plant & equipment due to changes in market conditions for these assets.  
  • Adjusted EBITDA Profitability: The Company evaluated all facets of the organization and realigned executive management to focus on achieving profitability. Significant non-recurring one-time costs were incurred in 2021 as the Company developed, built, and launched its Sunday Market House of Brands. Most of these costs are not expected to be recurring. Over the last four quarters, the Company saw significant progress and is trending towards achieving breakeven Adjusted EBITDA profitability in the second half of 2022. 
  • Repositioning the Balance Sheet. The Company completed two senior secured debt financings in Q4 2021, including a $10 million senior secured term credit facility in August 2021 and a new $19 million credit facility in December 2021. The new credit facility consists of a $12 million term loan and a revolving receivables facility of up to $7 million. The revolving receivables facility remains undrawn, providing the Company with liquidity to fund working capital investments required to continue rapidly scaling its adult-use sales.  As reflected in the Company’s announcement on February 1, 2022, the Company is actively engaging with holders of its listed unsecured convertible debentures maturing on June 27, 2022 (TSX: AH.DB) with a view to effecting changes in key terms that are equitable to both the holders and the Company, and provide a sustainable foundation for the Company’s continued growth.     

Note that the Company announced on February 8, 2022 that it changed its year-end to March 31.  As a result, in this transition year, annual audited financial statements for the 15 months ended March 31, 2022 will be issued prior to June 29, 2022.  

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 Three months ended Twelve months ended 
($,000s) Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020 
Net loss (71,509) (217,301) (165,715) (247,238) 
Add back:      
  Depreciation and amortization(1) 3,715 2,649 10,278 10,164 
  Interest expense, net 2,185 3,098 8,161 11,636 
  Income tax expense (recovery) – 2,854 (2,854) (2,540) 
EBITDA (65,609) (208,700) (150,130) (227.978) 
Inventory provision 17,266 – 19,648 16,973 
FV changes in biological assets and changes in inventory sold 6,663 11,106 547 12,160 
Share-based payments 663 582 2,831 2,690 
Bad debt expense 12 988 9,956 1,892 
Business transaction costs 951 824 4,330 4,146 
Gain on sale of assets – (1,181) (12,092) (1,181) 
Fair value through profit and loss adjustments 8,785 (877) 14,385 (943) 
Impairment of intangible assets – 22,116 53,093 22,116 
Impairment of goodwill – 177,476 11,314 177,476 
Impairment of property, plant & equipment 28,800 – 28,800 – 
Non-operating expense (income) 71 (74) (281) (481) 
Adjusted EBITDA(2) (2,398) 2,260 (17,599) 6,870 
1. Includes non-cash depreciation expensed to cost of sales.  
2. See “Cautionary Statements Regarding Certain non-IFRS Measures” section for term definition. 


Date:   February 15, 2022 

Time:   9:30 a.m. ET 

USA/Canada Toll-Free Participant Call-in: (866) 679-9046; Passcode: 6187986 

International Toll-Free Participant Call-in: (409) 217-8323; Passcode: 6187986 


This conference call will be webcast live over the internet and can be accessed through the link provided.  Audio of the call will be available to participants through both the conference call line and webcast; however, the presentation may only be viewed via the webcast. Participants who miss the live call can view a replay at any time via the link provided. 

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