MTL Cannabis loses $8.32-million in fiscal Q2

Executive Summary

• MTL Cannabis Corp. reported its second quarter fiscal 2026 financial results, showing consolidated revenue of $25.4 million and net revenue of $20.6 million for the three-month period ending September 30, 2025.
• The company reported positive adjusted EBITDA of $2.2 million and maintained gross margins before fair value adjustments at 50%.
• Concurrently, the company closed a new credit agreement with a Canadian Schedule 1 bank totaling up to $27 million in facilities to refinance existing debt, finance working capital, and fund capital expenditures.

Key Details

• Revenue Performance:
  • Consolidated revenue for Q2 FY2026 was $25,365,570, compared to $26,434,502 in the same quarter of the prior fiscal year.
  • Net revenue for Q2 FY2026 was $20,613,664, compared to $20,869,898 in the same quarter of the prior fiscal year.
• Profitability Metrics:
  • Gross margins before fair value adjustments were 50% in Q2 FY2026 (an increase of 7% from the previous quarter, but a decrease of 4% from 54% in Q2 FY2025).
  • Adjusted EBITDA was positive at $2,223,919 for Q2 FY2026.
• New Credit Agreement Details:
  • Closed on July 30, 2025, with a Canadian Schedule 1 bank.
  • RT Facility: Uncommitted demand revolving credit facility of up to $4 million.
  • NRT 1 Facility: Committed non-revolving term credit facility (single drawdown) of $6.75 million.
  • NRT 2 Facility: Committed non-revolving term credit facility (single drawdown) of $12.15 million.
  • DDTL Facility: Uncommitted delayed draw non-revolving term credit facility (one or more drawdowns) of $4.12 million.
  • Total Potential Facilities: Up to $27 million.
  • Maturity: July 28, 2028.
  • Interest Rate: Based on the Canadian overnight repo rate average plus an applicable margin, or the Canadian prime rate plus an applicable margin.
  • Security: Secured against all present and after-acquired undertakings, property, and assets of the company and its material operating subsidiaries, plus a first-ranking collateral mortgage on the property at 551 Rue Saint-Marc, Louiseville, Que.
  • Use of Proceeds: To assist with capital expenditures, finance working capital, and refinance existing debt.
• Operational Updates:
  • Successful transition of medical fulfilment operations from Pickering to Montreal.
  • Continued investments in cultivation technologies and streamlining of the asset portfolio.
  • Streamlining of capital structure to reduce legacy obligations.

Notable Quotes

• "We are incredibly proud of our continued progress as a business, demonstrating the strength of our core operations with stable revenue, strong margins and continued EBITDA performance. We continue to make progress with the realignment of our internal supply chain to enhance profitability and internal capacity... which we expect will have meaningful and positive contributions towards our future margins and profitability," said Michael Perron, chief executive officer of MTL.
• "At the same time, we have been able to successfully streamline our capital structure, reducing legacy obligations and positioning the company for sustainable long-term growth. This strategic reset aligns our balance sheet with the performance we are delivering across the business."