IM Cannabis Announces Third Quarter 2021 Financial Results and Provides Outlook and Business Update

Q3 2021 revenues of $14.4 million; a 30% increase from Q2 2021

Gross margin improved to 20% from 5.4% in Q2 2021; expected to increase further in Q4 and into 2022

Canadian recreational brands WAGNERS and Highland Grow continue to gain market share, with sales in Ontario from June to October increasing by over 110%

IM Cannabis Corp. (“IMC” or the “Company“) (CSE:IMCC), (NASDAQ:IMCC), a multi-country operator (“MCO“) in the medical and adult-use recreational cannabis sector with operations in Israel, Canada, and Germany, today announced its unaudited financial results for the three and nine-month periods ended September 30, 2021.

All figures are expressed in Canadian dollars unless otherwise indicated.

Q3 2021 Financial Summary

  • Revenues for Q3 2021 were $14.4 million, a sequential increase of approximately 30% from Q2 2021. Had the acquisitions of MYM closed and Pharm Yarok Transaction and Vironna Transaction[1] signed at the start of the quarter, revenue for Q3 2021 would have been approximately $1.4m higher.
  • Gross Margin[2], before fair value adjustments, for Q3 2021 was 20.0%, up from 5.4% in Q2 2021
  • Adjusted EBITDA[3] loss for Q3 2021 was $7.0 million, inclusive of $1.6 million of non-recurring acquisition-related costs in the quarter

Commenting on the Company’s results, Oren Shuster, Chief Executive Officer of IMC said, “Our third quarter results are indicative of the embedded growth profile of our integrated MCO model. Over the past year, we have completed a number of strategic and accretive acquisitions that have vertically integrated our operations, providing IMC with premium cultivation capacity, sought after brands and expanded distribution reach. Today we are seeing the revenue growth and margin opportunities of our unique business model, trends that we expect to continue.”

Outlook and Regional Business Update

IMC expects continued sequential revenue growth in Q4 2021 and into 2022, with recent acquisitions in Israel[4]and Canada having been integrated, and the portfolio positioned to optimize revenue and margins across jurisdictions. IMC anticipates that gross margin will continue to increase as revenue growth offsets fixed operating costs, particularly in Canada.

Market conditions and activities across each of the jurisdictions in which IMC carries on business are highly favourable for the Company and highlight the integrated nature of its operations.


  • Subsequent to quarter end, Focus Medical Herbs Ltd. (“Focus Medical”) received Ministry of Agriculture approval to import WAGNERS premium, indoor-grown cannabis to the Israeli market. With Ministry of Heath approval expected before year-end, Focus Medical will be able to provide a consistent supply of premium cannabis to patients across Israel.
  • Importing IMC’s Canadian-grown cannabis underscores the importance of the strategic acquisitions it has made over the last 9 months. With higher selling prices in Israel as compared to Canada along with the acquisitions of pharmacies in Israel, IMC will be able to realize higher gross margins[5] and satisfy the increasing demand of patients in Israel for premium indoor-grown Canadian cannabis.
  • Focus Medical will continue to import Canadian-grown premium cannabis from Avant Brands Inc. (“Avant Brands”), having received its first shipment to Israel in September, as well as imports from The Flowr Corporation (“Flowr”). With diversified sources of premium grade cannabis, Focus Medical can ensure that it meets the evolving demands of its patients.


  • With consistently high quality and THC levels, increased brand recognition, additional SKUs, retail penetration and value-for-money, WAGNERS and Highland Grow continue to build momentum and market share.
  • Since June 2021 when WAGNERS was launched in Ontario, combined sales of WAGNERS and Highland Grow in Ontario have increased by over 110%[6]. With the success of recently launched Cherry Jam, Pink Bubba and Blue Lime Pie offerings, and additional SKUs expected to be secured in Ontario’s most recent product call, the Company believes that its Canadian recreational cannabis business will continue to gain market share.
  • In Ontario, Canada’s largest provincial market for cannabis, Highland Grow flower was ranked first in market share in the ultra-premium flower segment with 12.5% market share for the month of October. In the premium flower segment, WAGNERS was ranked sixth for the month of October with market share of 3.8%. Combining ultra-premium and premium flower segments, Highland Grow and WAGNERS ranked fourth in Ontario in October across all licensed producers selling premium and ultra-premium flower, with 6.3% market share[7].
  • In addition to Ontario, WAGNERS and Highland Grow have built considerable market share in the Maritime provinces, recently launched in Manitoba with great initial success, and has re-entered the Alberta market with 18 active SKUs.
  • Operationally, cultivation activities continue to meet or exceed internal benchmarks for production, yields and THC levels. The Company expects to be producing approximately 7,000 kg of dried flower on a run-rate basis by the end of the first quarter of 2022, an increase of over 40% from current levels, as process improvements are realized through the flowering cycle. Recent THC testing levels continue to set new internal records, with the ten most recently harvested lots testing on average over 25%.


  • The Company continues to develop Adjupharm GmbH (“Adjupharm”) as its European hub and to expand its presence in the German market by forging partnerships with pharmacies and distributors across the country. The Company’s objective is to capture significant market share in Germany by working directly with pharmacies and with distributors to increase market reach for products bearing the IMC brand.
  • IMC expanded delivery capabilities and regional locations: 70% of the cannabis market is stocked with IMC products and IMC products are at all 70 VIP pharmacies in Germany. The remaining smaller pharmacies that can handle cannabis have access to IMC products on demand with a 1-day delivery guarantee either directly through IMC/Adjupharm or our distribution partners.

Corporate Highlights

  • On July 9, 2021, the Company announced the closing of the MYM Nutraceuticals Inc. (“MYM”). MYM operates two licensed, craft cultivation facilities in Canada. MYM’s flagship brand, Highland Grow, is an ultra-premium brand sold in most provinces throughout Canada.
  • On July 27, 2021, the Company announced signing of a definitive agreement in connection with the acquisition of R.A. Yarok Pharm Ltd., Rosen High Way Ltd. and High Way Shinua Ltd. (collectively, “Pharm Yarok”) accelerating IMC’s execution of its vertical integration strategy within the Israeli retail market (the “Pharm Yarok Transaction”)
  • On August 16, 2021, IMC announced the signing of a definitive agreement to acquire 51% of the outstanding ordinary shares of Revoly Trading and Marketing Ltd. dba Vironna Pharm (“Vironna”) (the “Vironna Transaction”). This further expands IMC’s retail presence achieved through the acquisition of certain assets from Panaxia Pharmaceutical Industries Israel Ltd. and Panaxia Logistics Ltd., part of the Panaxia Labs Israel, Ltd. group of companies (“Panaxia”) (the “Panaxia Transaction”) and the Pharm Yarok Transaction, each entered into earlier this year.

Q3 2021 Financial review

Revenues for Q3 2021 $14.4 million compared to $5.8 million in Q3 2020, representing an approximate increase of $8.6 million or 148% and a sequential increase of 30% from Q2 2021. Total dried flower sold in Q3 2021 was 2,434 kg at an average selling price of $4.85 per gram compared to 981 kg for Q3 2020 at an average selling price of $5.49 per gram. The increase in revenues related to dried flower is attributable to deliveries made under the Focus’ sales agreements to pharmacies, as well as to revenues generated from Trichome JWC Acquisition Corp. d/b/a JWC (“TJAC”), Adjupharm, nearly full quarter consolidation of MYM, Pharm Yarok, Panaxia and Vironna activities according to the acquisition dates for each transaction[8].

Cost of revenues is comprised of cultivation costs, purchase of materials and finished goods, utilities, salary expenses, and import costs. Cost of revenues for Q3 2021 were $11.5 million, compared to $2.5 million in Q3 2020, representing an increase of $9.0 million or 355%. Sequentially, the increase was $1.0 million or 9.5% from Q2 2021.

The Company’s gross margin[9] for Q3 2021 was 20.0% compared to 5.4% in the Q2 2021 and 57.1% in Q3 2020. Gross profit was impacted primarily due to a delay in a certain shipment at TJAC that was scheduled to occur prior to quarter end but occurred at the beginning of October 2021. Given the largely fixed cost structure at TJAC, gross margins are sensitive to changes in revenue and are expected to increase with revenue growth.

General and administrative expenses for Q3 2021 were $10.2 million, compared to $2.2 million in Q3 2020, an increase of $8.0 million. The increase is mainly attributable to the growing corporate activities in Israel, Canada, and Germany, professional services derived from legal fees and other consulting services, among other, in relation to M&A processes, of $3.3 million (including share-based expenses to financial advisors of approximately $0.3 million), salaries to employees of $2.9 million, impairment of other receivables of $0.5 million and insurance costs of $0.8 million. Sequentially, general and administrative expenses increased 84%. As a percent of revenue, general and administrative expenses in Q3 2021 were approximately 71%, and 67% in Q2 2021, compared with 38% in Q3 2020.

Selling and marketing expenses for Q3 2021 were $2.2 million, compared to $1.2 million in Q3 2020, representing an increase of $1.0 million or 88.6%. The increase is primarily due to the Company’s increased marketing efforts in Israel and brand launch in Germany, as well as increased distribution expenses relating to the increase in sales, full quarter consolidation of the results of Trichome Financial Corp. (“Trichome”) and nearly full quarter consolidation of MYM’s results.

Adjusted EBITDA[10] gain (loss) for Q3 2021 was $(7.0) million, compared to $0.3 million in Q3 2020, after the adjustment of IFRS biological assets fair value adjustments, share-based payments and costs related to the NASDAQ listing and other non-recurring costs. Adjusted EBITDA[11] gain (loss) for Q3 2021 including adjustment of $1.6 million non-recurring transaction costs in the quarter was $(5.4) million compared to $0.3 million in Q3 2020.

Net loss for Q3 2021 was $(5.7) million compared to a net loss of $(5.1) million in Q2 2021. The net income decrease was related to factors impacting operations described above, and finance income driven by revaluation of Warrants and other financial instruments in the amount of $8.1 million, which were recorded against liability on the grant day and were re-evaluated on September 30, 2021 through profit or loss.

Basic Income (Loss) per Common Share for Q3 2021 was $(0.06) compared to $0.004 in Q3 2020. Diluted Income (Loss) per Common Share for the Q3 2021 was $(0.18) compared to $0.004 in Q3 2020.

As of September 30, 2021, the Company had cash balance of $17 million compared with $8.9 million on December 31, 2020.

Subsequent to September 30, 2021 on October 15, 2021, IMC issued the third installment of shares in connection with Panaxia Transaction.

The complete unaudited consolidated financial statements of the Company and related management’s discussion and analysis for the three- and nine-months periods ended September 30, 2021 and 2020, will be available under the Company’s SEDAR profile at and on the Company’s EDGAR profile at

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