CLS Holdings Reports Revenue Decline and Improved Net Loss for Three and Nine Months Ended February 28, 2025

CLS Holdings USA, Inc. reported a decline in financial performance for the three and nine months ended February 28, 2025, compared to the same periods in the previous fiscal year. The company generated revenue of $3.85 million for the three months, a decrease of 22% from $4.93 million in the prior year. For the nine-month period, revenue fell to $12.82 million, down 16% from $15.24 million. The decrease in revenue was attributed to a decline in average daily sales at its dispensary, which dropped from $32,827 to $26,248. The cost of goods sold also decreased, leading to a gross margin of 40% for the quarter, down from 43% a year earlier.

In terms of profitability, CLS Holdings reported a net loss of $278,880 for the three months ended February 28, 2025, a significant improvement compared to a net loss of $4.37 million in the same period last year. For the nine months, the net loss was $1.19 million, down from $6.13 million. The company attributed this reduction in losses to cost-cutting measures that resulted in a 25% decrease in selling, general, and administrative expenses, which totaled $1.94 million for the quarter.

Operationally, CLS Holdings has made strides in its customer engagement, serving 48,978 customers in the latest quarter, although this was a decrease from 64,368 in the previous year. The company continues to focus on its retail dispensary and cannabis production, which accounted for 61% and 39% of revenue, respectively. The company has also been actively managing its debt, with significant reductions in convertible notes payable and related party notes, reflecting a strategic effort to improve its financial position.

Looking ahead, CLS Holdings aims to enhance its market presence through potential acquisitions and the development of new product lines. The company is also exploring opportunities to expand its operations into newly regulated states. However, it faces challenges, including a working capital deficit of $14.59 million as of February 28, 2025, primarily due to tax accruals under Section 280E of the Internal Revenue Code. The company’s ability to continue as a going concern is contingent upon generating sufficient cash flow from operations and securing additional financing.