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Nova Announces First Quarter 2023 Results

First quarter revenue growth of 20.8%; gross margin improvement to 21.4%; and Adjusted EBITDA growth of 127% to $3.2 million

EDMONTON, AB, May 10, 2023 /CNW/ - Nova Cannabis Inc. (the "Company" or "Nova") (TSX: NOVC) today released unaudited condensed interim consolidated financial statements (the "interim financial statements") and management's discussion and analysis ("MD&A") for the three months ended March 31, 2023. All financial information in this press release is reported in millions of Canadian dollars and represents results from continuing operations, unless otherwise indicated.

NOVA Cannabis Inc. Logo (CNW Group/Nova Cannabis Inc.)
NOVA Cannabis Inc. Logo (CNW Group/Nova Cannabis Inc.)

"First quarter 2023 marked a strong start to the year as we are seeing steady progress across all key financial operating metrics – revenue growth, gross margin improvement and Adjusted EBITDA growth," said Marcie Kiziak, CEO of Nova.  "With the successful launch and growth of our private label products, proprietary data licensing program, and the recent introduction of Firesale Cannabis, we are proud to bring innovative products and solutions to market that are clearly resonating with consumers and delivering value to our partners. We've got a proven model, and with the anticipated completion of the Nova Reorganization (defined below) we look to further capitalize on the exciting opportunities ahead by greatly expanding our footprint across Canada."

The transaction between Nova and SNDL Inc. ("SNDL") to implement a strategic partnership in the cannabis industry (the "Nova Reorganization") was approved by Nova's minority shareholders who are not related parties on May 5, 2023. Completion of the Nova Reorganization remains subject to certain other customary closing conditions, including the receipt of certain regulatory approvals required under applicable provincial cannabis legislation and from the Toronto Stock Exchange ("TSX"). Subject to the satisfaction or waiver of all closing conditions, the Nova Reorganization is expected to be completed prior to June 30, 2023.


  • Revenue of $60.2 million, a 20.8% increase from the first quarter of 2022.

  • $1.5 million of revenue related to proprietary data licensing arrangements compared to $1.2 million in the first quarter of 2022.

  • Gross margin of $12.9 million (21.4% of revenue), a 37.4% increase from $9.4 million for the first quarter of 2022 (18.8% of revenue). Gross margin improvement was driven by the execution of Nova's disciplined pricing strategy, private label initiatives and growth in proprietary data licensing arrangements.

  • Net loss of $0.5 million in the first quarter of 2023 compared to a net loss of $3.5 million in the first quarter of 2022.

  • Adjusted EBITDA for the first quarter of 2023 of $3.2 million compared to $1.4 million for the first quarter of 2022.

  • Nova's management estimates that its market share was approximately 20.7% in Alberta and 3.4% in Ontario for the months of January and February, 2023, based on available industry data1.

  • 92 stores operating as of May 10, 2023, a net increase of one store since March 31, 2023, and four stores since the beginning of 2023.

  • In April 2023, the Company launched Firesale Cannabis, a new deep discount retail banner that combats industry waste and provides a unique experience for value-conscious shoppers.

  • Value Buds private label sales, sourced from SNDL, represented approximately 8.1% of total 28-gram sales and 36.3% of 14-gram sales in Alberta Value Buds stores for the period ended March 31, 2023. Private label margins are approximately 5% higher than margins on comparable competitor products.

  • Value Buds' 28-gram offerings launched in the Ontario market in late February 2023, and the 14-gram format is expected to launch later in 2023.

  • For the first quarter of 2023, cash used in operating activities of $1.4 million, a $4.5 million decrease from the $5.9 million cash used in operating activities for the first quarter 2022. The decrease in cash used is primarily related to increased sales and gross margin for the period.

  • Liquidity, including cash and availability under the Revolving Credit Facility (defined below), of $8.0 million as at March 31, 2023.


Certain specified financial measures in this earnings release, including Adjusted EBITDA, are non-IFRS measures and may not be comparable to similar measures reported by other companies. This non-IFRS financial measure should not be considered in isolation or as an alternative for measures of performance prepared in accordance with IFRS.


1 Source: Statistics Canada: Retail trade sales by province and territory

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure which the Company uses to evaluate its operating performance. Adjusted EBITDA provides information to investors, analysts, and others to aid in understanding and evaluating the Company's operating results in a similar manner to Management. Adjusted EBITDA is defined as loss and comprehensive loss before finance costs; gains and losses on fair value adjustments; depreciation; impairments, lease remeasurements and other costs; and certain one-time transaction costs and restructuring costs, as determined by Management.

The following table reconciles Adjusted EBITDA to net loss and comprehensive loss for the periods noted:

Three months ended 
March 31

(expressed in thousands)



Loss and comprehensive loss




Finance costs



Net gain on fair value adjustments






Impairment, lease remeasurements, and other costs



Transaction costs (1)



Restructuring costs (2)



Adjusted EBITDA




Transaction costs include expenses incurred as a result of SNDL's acquisition of Alcanna Inc., Nova's former majority shareholder.  


Restructuring costs include expenses incurred as a result of the Nova Reorganization.


Summary of Consolidated Cash Flows

Three months

Cash provided by (used in)

March 31

(expressed in thousands)



Operating activities



Investing activities



Financing activities



Net decrease in cash



Revolving Credit Facility

Nova has an uncommitted revolving credit facility with SNDL in an aggregate principal amount not to exceed $15.0 million (the "Revolving Credit Facility"). On April 28, 2023, the term of the Revolving Credit Facility was extended to June 30, 2023.

As at May 10, 2023, $12.3 million in principal and accrued but unpaid interest is outstanding on the Revolving Credit Facility.


Nova's objective is to be one of the largest and fastest-growing cannabis retailers in Canada. Its goal is to disrupt and solidify the cannabis retail market by promoting a wide range of cannabis products at everyday best-value prices, while encouraging greater migration from the illicit cannabis market. The Company's strategy is rooted in the quality of its store footprint and locations, the sales efficiency of Nova stores, and the appeal of the Value Buds brand. Nova remains disciplined and customer focused by choosing the best real estate to execute its strategy – whether through acquiring stores or building its own.

  • Through its partnership with SNDL, Value Buds' private label strategy has been successfully launched in Alberta and Ontario. The private label strategy enables Nova to develop higher gross margin offerings, build customer loyalty and create long-term brand awareness. The private label strategy focuses on keystone segments, specifically large format, uniquely curated for the Value Buds consumer, and drives meaningful differentiation through the retail network.

  • The Company continues its aggressive pricing strategy to capture further market share. Nova has begun adjusting pricing across all categories in Alberta to test elasticity and understand consumer buying trends. This contributed to the sequential gross margin improvement from the first quarter of 2022 to the first quarter of 2023 from 18.8% to 21.4%.

  • Nova has opened or acquired four additional stores in 2023, two in Alberta and two in Ontario. Pending completion of the Nova Reorganization, announced by the Company on December 20, 2022, and amended on April 3, 2023, the Company will acquire approximately 32 additional stores located in Alberta, British Columbia, Saskatchewan, Manitoba and Ontario from SNDL's retail network, increasing the Company's store footprint by more than 33%.

  • The completion of the Nova Reorganization is expected to create a well-capitalized cannabis retail platform through a vertical integration model leveraging SNDL's upstream and midstream capabilities. The Nova Reorganization will enable Nova to continue to evolve in a still immature sector by becoming a trusted partner to the Canadian cannabis ecosystem.


Nova will host a conference call and webcast at 10:30 a.m. EDT (8:30 a.m. MDT) on Wednesday, May 11, 2023.

Call Access

Canada: 1-800-319-4610
International: +1-604-638-5340

Webcast Access

To access the live webcast of the call, please visit the following link: 


The webcast archive will be available for three months via the link provided above. A telephone replay will be available for one month. To access the replay dial:

Canada/USA Toll Free: 1-800-319-6413 or International Toll: +1-604-638-9010 
When prompted, enter Replay Access Code: 0162#

For further information, refer to the Company's interim financial statements and MD&A for the three months ended March 31, 2023, which are available from the Company's profile on SEDAR, at www.sedar.com, or on the Company's website at www.novacannabis.ca.


This news release contains forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "continue", "anticipate", "will", "believes", "should", "plan", "intention", and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to: the Company's expectations regarding its growth and business strategies; Nova's private label strategy; and the Company's ability to successfully launch additional private label offerings; Nova's ability to become one of the largest cannabis retailers in Canada; the Company's ability to increase its market share; the Company's expansion in Alberta, Ontario, Saskatchewan, Manitoba, and other jurisdictions in Canada where it believes there is business efficacy to operate; the satisfaction or waiver of conditions precedent, including key regulatory approvals from applicable provincial regulators and the TSX, required in connection with the Nova Reorganization; the anticipated timing and completion of the Nova Reorganization, including the Company's acquisition of additional cannabis retail stores; and the expected benefits resulting from the Nova Reorganization.

With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the Company's ability to identify locations for, construct and open new stores and the costs related thereto; the availability of hardware and equipment for those stores; government regulation and applicable laws will not change in a manner adverse to the Company; receipt of necessary regulatory approvals to open new stores; the Company's ability to obtain leases for new sites and attract the necessary personnel to operate new stores; demand for the products the Company sells; other factors that will drive sales growth in the Value Buds banner, including Nova's private label strategy; availability of acquisition opportunities; sustainability of competitors' businesses and competition in the retail cannabis industry, including from the illicit cannabis market;  consumer demands; and factors that influence consumer behavior.

Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, the risk that Nova will be unable to execute its strategic plan and growth strategy, as planned without significant adverse impacts from various factors beyond its control; business decisions and strategies of SNDL, Nova's direct majority shareholder; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the retail cannabis industry; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in Canada (including Alberta, Ontario and Saskatchewan), and globally; industry conditions, including changes in government regulations; fluctuations in foreign exchange or interest rates; unanticipated operating events; failure to obtain regulatory and third–party consents and approvals when required; changes in tax and other laws that affect Nova and its shareholders; the Company's ability to complete the Nova Reorganization and to realize the projected benefits; the potential failure of counterparties to honour their contractual obligations; stock market volatility; and the other factors described in the Company's public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Nova does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

SOURCE Nova Cannabis Inc.


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