C21 Investments Reports First Quarter Financial Results

Executive Summary

• C21 Investments Inc. reported first-quarter financial results for the period ending June 30, 2025, highlighting a 30% year-over-year increase in revenue to $8.6 million, driven by same-store sales growth across its Nevada dispensaries.
• The company achieved an Adjusted EBITDA of $1.1 million, a 244% increase from the prior year period, and generated $0.9 million in Free Cash Flow before working capital changes.
• Management noted that despite a 14% decline in overall Nevada state cannabis sales, the company maintained sequential revenue growth and positive free cash flow, while also repurchasing shares under its NCIB.

Key Details

• Revenue: $8.6 million (up 30% YoY; up 6% sequentially).
• Gross Margin: 35% (up 410 basis points YoY; down sequentially due to 4/20 discounts and increased wholesale activity).
• Income from Operations: $0.2 million (up $1.0 million from Q1 last year).
• Net Income/Loss: Net Loss of $0.8 million ($0.01 per share); Net Income Before Tax was $0.1 million.
• Adjusted EBITDA: $1.1 million (up 244% YoY).
• Free Cash Flow: $0.9 million (before working capital changes and taxes).
• Retail Transactions: Up 45% from Q1 last year and 5% sequentially.
• NCIB Activity: Purchased 184,500 common shares for cancellation.
• Cash Position: Cash at end of Q1 was $2.66 million (flat from Q4 despite $0.8M tax payments, $0.3M debenture repayment, and share buybacks).
• Tax Position: Company challenges Section 280E tax liability and plans to refile amended U.S. federal income tax returns for fiscal years 2022, 2023, 2024, and two months ended March 31, 2024.
• Balance Sheet Highlights (June 30, 2025):
  • Total Assets: $56.4 million.
  • Total Liabilities: $28.5 million.
  • Shareholders' Equity: $27.9 million.
  • Inventory: $4.16 million.
  • Uncertain Tax Position Liability: $10.54 million.

Notable Quotes

• Sonny Newman, CEO and President: "30% revenue growth in Q1 underscores the soundness of our retail strategy and ability to deliver exceptional results in a challenging market. We are pleased with yet another quarter of robust same-store sales growth across all of our dispensaries... Despite industry-wide price compression and the decline in overall Nevada state sales, we have delivered sequential revenue growth and another quarter of positive free cash flow."