On Monday, August 16, California-based innovator in marijuana cultivation and creator of the legendary brand Lowell Smokes, announced revenue and operating results for their second quarter. Revenue generated for the three-month period that ended June 30, 2021, was $15.2 million; an increase of 53% from Q2 2020 and an increase of 37% over the preceding quarter. Lowell also reported their gross margin was 38% compared to the negative margin of 13% in both the second quarter of last year and the 2021 quarter.
According to Lowell, they had a net income of $731,000 versus a net loss of $8.8 million and $6.7 million in Q2 2020 and Q1 2021, respectively. The company made a note that the current quarter included proceeds from insurance recovery claims of $2.6 million, which was associated with plant stress that happened in 2020. Lowell Farms CEO, Mark Ainsworth said, “We have a lot to be proud of, but I am particularly excited about the continued progress we are making at the cultivation level.”
He continued, “We have spent a good portion of Q2 dialing in our automated environmental systems to continue to reach increased yields and potencies, and right now we are collecting important data to provide the optimal conditions for each particular genetics.” He concluded, “This is an exciting phase and we look forward to reporting back to you on our learnings and improvements as well as the positive impacts on our annual harvest run rate.” Additionally, the company trimmed its operating loss to $473,000 compared to $4.8 million and $5.7 million in Q2 2020 and Q1 2021, respectfully.
The company said, “Our Flower production at the greenhouse ramped steadily during the quarter and we exceeded our guidance of 8,500 to 9,000 lbs during the quarter by a healthy margin at 9,553 lbs, a 102% increase over the preceding quarter. Additionally, our plan to restore the Lowell brand to health was met with success during the quarter.” As the team forges onward they said, “We have a lot to look forward to, and despite the headwinds, we anticipate encountering from a decline in bulk sales and the compression in the market.”
He continued, “Our strategy is to offset revenues with our increased cultivation output and the launch of our new LFS business unit which is ramping quickly to incredibly high demand.” It’s great to see a company’s financial comeback story in real-time. It’s clear that business is looking good for the Lowell brand – their future looks bright.