One of Australia’s leading medical cannabis companies is facing the cost of a depressed market exacerbated by closings and riots in the US in FY21, despite green shoots in its hemp textiles and grocery stores.
In its preliminary financial report released today, Ecofibre, headquartered in Sydney (ASX: EOF), announced a 43 percent drop in sales to $ 28.8 million, with a dramatic change in operating results from a profit of $ 13.2 million in the FY20 on a $ 7 million loss.
The lower profits were driven by the impact on the group’s Ananda Health division, which sells a variety of cannabidiol (CBD) oil-based health, wellness and skin care solutions to pharmacies in the United States.
The segment grew from $ 20.8 million in pre-tax income last year to just $ 289,000 recently after a 69 percent decline in revenue.
On the upside, sales of its hemp-based textile company Hemp Black almost quintupled to $ 11.9 million, while Ecofibre’s Ananda Food Division – which sells Tasmanian hemp flour, seeds, protein, and oil to Woolworths, Coles and IGA – saw sales jump 78 percent to $ 2.67 million.
Neither the textile nor the grocery stores were able to generate profits with pre-tax losses of around US $ 1 million and US $ 1.5 million, respectively.
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