VANCOUVER —
Rubicon Organics Inc reported its financial results for the year ended December 31, 2024 (“Q4 2024”). All amounts are expressed in Canadian dollars.
“2024 marked another record year for Rubicon Organics growing 21% year-over-year, dramatically outpacing market growth. Our vape launch, the fastest and widest in our company history, underscores the strength of our industry leading premium brands and our ability to drive growth through reputation and high-quality innovation.” said Margaret Brodie, CEO.
Brodie added, “Shifting market dynamics are driving a supply shortage in Canada, creating significant opportunities for established operators. At the same time, international markets are increasingly opening up to top Canadian producers. We are excited to accelerate our expansion strategy and meet the growing demand for our premium brands both at home and abroad.”
“We successfully navigated early 2024 challenges, delivering a strong rebound in the second half,” said Janis Risbin, CFO. “Additionally, refinancing our debt at industry-leading rates reinforces our financial strength as we continue to focus on sustainable, long-term growth.”
2024 Highlights
For the twelve months ended December 31, 2024
Net revenue of $48.7 million (21% increase from 2023) for the year ended December 31, 2024
Gross profit before fair value adjustments of $15.3 million (9% increase from 2023) for the year ended December 31, 2024
Achieved Adjusted EBITDA gain of $4.0 million for the year ended December 31, 2024 (including $0.9 million of one-time ERP costs)
Cash provided by operating activities of $3.4 million for the year ended December 31, 2024
Free Cash Flows of $1.9 million for the year ended December 31, 2024
Industry recognition winning 11 prestigious awards including Budtender Choice and 1964 Supply Co. Brand of the Year
WildflowerTM is the #1 topical brand in Canada with market share of 27.1% for the year ended December 31, 2024
2.0% national market share of flower and pre-rolls for the year ended December 31, 2024
26.5% national market share of premium edibles for year ended December 31, 2024
Launch of full spectrum extract vapes in Alberta, BC, and Ontario with five SKUs in market, growing our share of the resin vapes category to 13.4%8 national market share and 56% distribution within the first 6 months since launch
Secured $10 million credit facilities at interest rate of 6.75% for 5 years over 10-year amortization period
Subsequent Sales & Operational Highlights
The Company entered into a purchase and sale agreement of a purpose-built indoor cultivation facility in Hope, British Columbia, spanning 47,500 square feet. The Company plans to use the Hope Facility to expand its production capacity. The transaction is expected to close in the second quarter of 2025.
The Company’s Delta Facility received its CUMCS Equivalency IMC-G.A.P. certification and executed its first international shipment.
1964 Supply Co launched two more FSE resin vapes with LA Kush and Stinky Pinky, bringing the total amount of vapes available to 7.
2025 Outlook
Securing Additional Premium Quality Supply
With growing demand for Canadian cannabis from the domestic and international markets, we see that controlling access to premium quality supply is critical to continue to grow our brands and gross revenue. Our Delta Facility is fully operational and has annual production capacity of 11,000 kg. We are continuously evaluating ways to improve both our yield and quality at the Delta Facility and are in the trial stage of evaluating additional lighting at site.
In order to increase our supply of premium flower, we plan to acquire the Hope Facility that will significantly expand our annual production capacity, adding an annual production capacity of 4,500 kg, representing an over 40% increase over our current annual production capacity from the Delta Facility, bringing total annual production capacity to 15,500 kg of premium cannabis. This acquisition is planned to close in Q2 2025 with certain incremental capital to meet our requirements completed by mid-summer. Pending licensing timing expected sometime in the summer, we expect to be running at full capacity by the end of the year but not contributing to our revenue until 2026. We expect to incur additional debt financing related to the Hope Facility.
Our 2024 net revenue growth has been driven through strategic partnerships with co-manufacturers and contract growers and these arrangements are expected to provide up to 2,000 kgs of incremental biomass to our business in 2025. We plan to continue to collaborate with our trusted partners and explore additional partnerships as we strive to meet the growing demand for our high-quality premium products.
Building Trust with our Customers in Canada
We are committed to the growing Canadian cannabis market and dedicated to being a trusted partner for our customers—including provincial distributors, retailers, and consumers. As the Canadian customers face increasing competition from international demand, we have seen many mainstream and premium licensed producers shifting their sales abroad. We see this as a prime opportunity to strengthen our brand presence in Canada.
With SKU rationalization underway across several provinces, suppliers are being evaluated on reliability and sales performance. This shift is raising the bar for market entry, making it increasingly challenging for new brands and products to secure shelf space. At the same time, Canadian consumers are becoming more brand-loyal, prioritizing trust and value in their purchasing decisions. We believe our award-winning brands and diverse product portfolio will continue to resonate with them.
Looking ahead, we anticipate a more competitive retail landscape. However, Rubicon’s strong brand recognition, consumer loyalty, high supplier ratings, and strategic positioning provide a solid foundation for long-term success in Canada.
Genetics
We possess valuable and unique intellectual property in cannabis genetics, which we consider a critical asset in maintaining our position as a leading innovator within the industry. Our extensive genetics library is central to our strategy of delivering consistent, high-quality genetics and new product offerings for the premium and super-premium markets. While we maintain confidentiality around our specific genetics strategy, we view this as a significant competitive advantage and anticipate introducing exciting new genetic launches in 2025.
International
Our strong reputation in Canada has attracted an increasing number of inquiries from international medical cannabis buyers. The international cannabis market has experienced significant growth in recent years, with continued expansion anticipated. While the market is still in the early stages of adopting premium cannabis products, we aim to meet small amounts of the international demand with a test and learn strategy in 2025 making sure to meet our Canadian customer needs as a priority. The Company holds the necessary certifications for international exports and made its inaugural international shipment in the first quarter of 2025.
Financial Growth
For 2025, we are forecasting growth in both net revenue and Adjusted EBITDA, excluding acquisition-related and start up operational costs associated with the Hope Facility (the “Hope Costs”), driven by our ongoing expansion and strategic initiatives. While we anticipate strong performance in 2025, we expect the Hope Costs will impact our overall financial results. Despite the potential short-term impact of the Hope Costs on profitability, we are confident that our continued growth in net revenue and improved like-for-like Adjusted EBITDA will position us for long-term success and value creation.
About Rubicon Organics Inc.
Rubicon Organics Inc. is a global brand leader in premium organic cannabis products. The company is vertically integrated through its wholly owned subsidiary Rubicon Holdings Corp, a licensed producer. Rubicon Organics is focused on achieving industry leading profitability through its premium cannabis flower, product innovation and brand portfolio management, including three flagship brands: its super-premium brand Simply Bare Organic, its premium brand 1964 Supply Co, and its cannabis wellness brand Wildflower in addition to the company’s mainstream brand Homestead Cannabis Supply.
