Toronto, Ontario, Canada-based cannabis company Halo Labs reported a 49 percent decrease in revenue during the first quarter of the year compared with the same period last year. In all, the company saw revenues of $4.5 million in quarter one, down from $8.7 million in the three months that ended March 31, 2019, the company said.
The most significant driver of the revenue decline was the shutdown of Halo’s bulk distillate operations in Cathedral City, California, which the firm called “a conscious decision … to curtail manufacturing to preserve working capital amidst challenging market conditions due to the vape crisis.” The company also pointed to the coronavirus response in Nevada, which closed in-person dispensary sales and relied on home delivery, resulting in a 36.7 percent decline in cannabis sales in the state, according to BDS Analytics figures outlined by Halo.
The company reports that, compared to quarter four 2019, they experienced a 63.9 percent increase in grams of flower sold – perhaps due to the pulmonary disease linked to tainted vape products last year – along with a 4.7 percent increase in the average price per gram to $3.16.
In Oregon, Halo reported an 11 percent decline in grams of shatter sold from Q4 2019 to Q1 2020 and a 33 percent decline in grams of oil sold due to a decline in vape sales, the company said. However, the firm also experienced a 497 percent increase in grams of live resin sold, a 2,111 percent increase in grams of flower sold, a 109 percent increase in grams of oil sold in tincture and gummy forms, and 69,689 grams equivalent of pre-rolls.
As of March 31, Halo said it has a working capital surplus of $8.8 million and $3.8 million in cash. The company said it plans to control costs and preserve cash by paying senior management in stock. On Saturday, the company said it had issued share-based payments to contractors and suppliers in lieu of cash.