Lowell Farms Reports Significant Financial Challenges in Q3 2024, Seeks to Stabilize Position

Lowell Farms Inc. reported significant financial challenges in its 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable decline in total current assets, which fell to $5.6 million from $12.1 million at the end of 2023. Total assets also decreased to $28.4 million from $37.6 million, while total stockholders’ equity dropped to $4.2 million from $11.5 million.

For the three months ended September 30, 2024, Lowell Farms generated net revenue of $3.2 million, a 48% decrease from $6.2 million in the same period of 2023. The nine-month revenue also saw a decline of 44%, totaling $11.7 million compared to $20.8 million in the previous year. The company's gross profit for the quarter was a loss of $940,000, worsening from a loss of $444,000 in the prior year. The gross margin for the quarter was reported at -29%, compared to -4.8% in 2023.

The company reported a net loss of $3.6 million for the three months ended September 30, 2024, a significant improvement from a net loss of $20.2 million in the same period of 2023. For the nine months, the net loss was $7.3 million, down from $24.3 million in the previous year. This resulted in a net loss per share of $(0.19) for the quarter, compared to $(1.66) in 2023.

Strategically, Lowell Farms has made several operational adjustments, including exiting its cultivation facility in January 2024 to source flower from third-party suppliers. The company has also focused on restructuring its organization to identify cost efficiencies, which included reducing headcount and renegotiating leases. In October 2024, Lowell Farms entered into management services agreements with two cannabis retail dispensaries in Los Angeles, effective October 1, 2024, which may provide new revenue opportunities.

The company’s cash and cash equivalents decreased to $320,000 as of September 30, 2024, down from $5.5 million a year earlier. Working capital also deteriorated to $(1.9 million) from $3.5 million at the end of 2023. The company is actively working to improve its balance sheet by enhancing accounts receivable collections and optimizing inventory management.

Overall, Lowell Farms Inc. continues to navigate a challenging market environment while implementing strategic changes aimed at stabilizing its financial position and enhancing operational efficiency.