IMC Germany Announces Outstanding Preliminary Q3, 2024 Performance with 50% Growth Over Q2

Rhea-AI Summary

IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) has announced outstanding preliminary Q3 2024 performance for its German subsidiary, Adjupharm GmbH (IMC Germany). The company reported a remarkable 50% increase in revenue compared to Q2, where IMC Germany sold about CAD$ 3.5M. This growth exceeds expectations and demonstrates IMC Germany's successful execution of strategic initiatives and strong market demand for its products.

The partial legalization of cannabis in Germany, which came into effect in April 2024, has significantly increased demand for cannabis products in pharmacies. IMC's CEO, Oren Shuster, emphasized that ensuring a robust supply chain to meet this increased demand was a key objective since April 1st. The preliminary 50% growth is seen as a testament to delivering on this objective.

Positive

• 50% revenue increase in Q3 2024 compared to Q2 for IMC Germany
• Strong market demand for IMC Germany's products
• Successful execution of strategic initiatives
• Robust supply chain meeting increased demand following partial cannabis legalization in Germany

Negative

• None.

Insights

Financial Analyst

The preliminary Q3 2024 results for IMC Germany are significantly positive, showing a 50% revenue increase over Q2. This growth is particularly impressive given the recent partial legalization of cannabis in Germany, which has driven increased demand. The company's ability to capitalize on this market shift demonstrates strong operational execution and supply chain management.

With Q2 sales of approximately CAD$3.5 million, the 50% growth implies Q3 revenue of around CAD$5.25 million for IMC Germany. This substantial quarter-over-quarter growth could potentially lead to improved financial performance for the parent company, IM Cannabis Corp.

However, investors should note that these are preliminary results and await the full financial report to assess the impact on profitability and overall company performance. The growth in Germany is encouraging, but it's important to consider how this translates to the company's bottom line and its operations in other markets like Israel.

Market Research Analyst

The 50% growth in IMC Germany's Q3 sales reflects a significant market opportunity following the partial legalization of cannabis in Germany. This regulatory change has created a surge in pharmacy demand, which IMC has successfully leveraged through its supply chain strategy.

The German cannabis market is rapidly evolving and IMC's performance suggests they are well-positioned to capture market share. However, competition is likely to intensify as more players enter this growing market. IMC's ability to maintain this growth trajectory will depend on factors such as product quality, distribution network and brand recognition.

Investors should monitor how IMC adapts to changing market dynamics, including potential full legalization in Germany and other European countries. The company's success in Germany could serve as a blueprint for expansion into other emerging cannabis markets, potentially driving long-term growth for IM Cannabis Corp.

TORONTO and GLIL YAM, Israel, Oct. 2, 2024 /PRNewswire/ -- IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) (the "Company", "IMCannabis", or "IMC"), a leading medical cannabis company with operations in Israel and Germany, is pleased to announce that the preliminary sales results in Germany by its German subsidiary, Adjupharm GmbH ("IMC Germany"), for the third quarter of 2024 have significantly exceeded expectations, showing a remarkable 50% increase in revenue compared to the second quarter, where IMC Germany sold about CAD$ 3.5M. This outstanding growth demonstrates IMC Germany's successful execution of its strategic initiatives and strong market demand for its products.

Since the partial legalization of cannabis in Germany came into effect in April 2024, the demand for cannabis products in pharmacies has increased significantly, emphasizing the importance of a robust, reliable supply chain.

"Since April 1^st, one of our key objectives was to ensure a supply chain strong enough to meet the increase in demand.  This preliminary 50% growth is testament, in part, to delivering on this objective," said Oren Shuster, CEO of IMC. "We are thrilled with our Q3 performance, which not only surpassed our own targets but also highlights the dedication and hard work of our entire team."  

About IM Cannabis Corp.

IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has focused its resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.

The IMC ecosystem operates in Israel through its commercial relationship with Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms, distribution centers, and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients.

Disclaimer for Forward-Looking Statements

This press release contains forward-looking information or forward-looking statements under applicable Canadian and U.S. securities laws (collectively, "forward-looking statements"). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "likely" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to statements relating to compliance with Nasdaq's continued listing requirements, and timing and effect thereof; the potential outcome of the Licensing Agreement and the effect of collaboration with Carmel in the Israeli market and the potential exclusive launch of the BLKMKT^TM brand this year in Germany.

The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include:  the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company's ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and Focus Medical (collectively, the "Group") to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group's obligations; the Group's possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group's cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt and war, conflict and civil unrest in Eastern Europe and the Middle East.

Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

CAUTIONARY NOTE REGARDING FUTURE ORIENTED FINANCIAL INFORMATION 

This press release may contain future oriented financial information ("FOFI") within the meaning of Canadian securities legislation, about prospective results of operations, financial position or cash flows, based on assumptions about future economic conditions and courses of action, which FOFI is not presented in the format of a historical balance sheet, income statement or cash flow statement.

The FOFI has been prepared by management to provide an outlook of the Company's activities and results and has been prepared based on a number of assumptions including the assumptions discussed under the heading above entitled "Cautionary Note Regarding Future Oriented Financial Information" and assumptions with respect to the costs and expenditures to be incurred by the Company, capital expenditures and operating costs, taxation rates for the Company and general and administrative expenses. Management does not have, or may not have had at the relevant date, firm commitments for all of the costs, expenditures, prices or other financial assumptions which may have been used to prepare the FOFI or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not, or may not have been at the relevant date of the FOFI, objectively determinable. 

Importantly, the FOFI contained in this press release and the documents incorporated by reference herein, are, or may be, based upon certain additional assumptions that management believes to be reasonable based on the information currently available to management, including those assumptions discussed under the heading "Disclaimer for Forward-Looking Statements" and assumptions about: (i) the future pricing for the Company's products, (ii) the future market demand and trends within the jurisdictions in which the Company may from time to time conduct the Company's business, and (iii) the Company continued ability to maintain its capital to fund its ongoing business development and future growth.

The FOFI or financial outlook contained in this press release do not purport to present the Company's financial condition in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in any such document, and such variation may be material (including due to the occurrence of unforeseen events occurring subsequent to the preparation of the FOFI). The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments as at the applicable date. However, because this information is highly subjective and subject to numerous risks including the risks discussed under the heading above entitled "Cautionary Note Regarding Future Oriented Financial Information", FOFI or financial outlook within this in this press release should not be relied on as necessarily indicative of future results.

Company Contact:

Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
a.taranko@imcannabis.de

Oren Shuster, CEO
IM Cannabis Corp.
info@imcannabis.com

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SOURCE IM Cannabis Corp.

FAQ

What was IMC Germany's revenue growth in Q3 2024?

IMC Germany reported a 50% increase in revenue in Q3 2024 compared to Q2 2024.

How much did IMC Germany sell in Q2 2024?

IMC Germany sold about CAD$ 3.5M in Q2 2024.

When did partial cannabis legalization come into effect in Germany?

Partial cannabis legalization in Germany came into effect in April 2024.

What was a key objective for IMC since April 1st, 2024?

A key objective for IMC since April 1st, 2024 was to ensure a supply chain strong enough to meet the increase in demand following partial cannabis legalization in Germany.