Cannara Biotech Inc.

Q3 2026 gross cannabis revenue increased 16% year over year to CAD 44.1 million; total net revenue rose 16% to CAD 31.8 million from CAD 27.3 million; gross profit before fair value adjustments increased to CAD 13.4 million from CAD 12.1 million; gross margin was 42% versus 44% a year ago and 43% in Q2; adjusted EBITDA increased 11% to CAD 8.5 million, or 27% margin; operating income was CAD 7.4 million; income before taxes was CAD 6.9 million; net income was CAD 4.8 million versus CAD 4.1 million; EPS was CAD 0.05. Operating cash flow was CAD 5.7 million, and free cash flow was CAD 1.3 million. Year to date, gross cannabis revenue was CAD 123.7 million, net revenue was CAD 89.1 million, gross profit before fair value adjustments was CAD 38.5 million, adjusted EBITDA was CAD 23.3 million, operating cash flow was CAD 16.6 million, and free cash flow was CAD 4.3 million. Guidance/forward look: management expects four additional grow zones to be activated by the end of fiscal 2027, bringing total active capacity to approximately 75,000 kg, about one year ahead of the original timeline. The Curaleaf supply agreement is described as a committed two-year term with potential aggregate contract value of up to CAD 21 million, starting August 1, and management said domestic demand is strong enough to support the added rooms. They also said the Valleyfield processing center should be finalized by December, with EU GMP timing likely starting after construction is complete and taking about a year to two years, according to what they have been told.

Nicholas Sosiak framed the quarter as proof that Cannara’s model of premium quality at scale, disruptive pricing, and disciplined growth is working. He emphasized that the company is scaling from profitability and financial strength, with expansion tied to visible demand rather than speculative buildout. His tone was confident and operationally focused, repeatedly highlighting national share gains, product innovation, and the strategic value of the Curaleaf, Medican, and Blue River announcements.

Sosiak highlighted a solid balance sheet and internal funding capacity: cash ended at CAD 21.8 million, current assets were CAD 97.7 million, current liabilities were CAD 32.6 million, and working capital was about CAD 65.1 million. He said the company drew CAD 2 million on its CAD 10 million long-term credit facility to support Valleyfield construction and reduced borrowing cost to 4.83%. He also stressed that capital spending is being directed toward post-processing throughput and additional grow zones, while the business remains free cash flow positive and keeps access to credit.

Analysts focused on the Curaleaf deal economics, the EU GMP process, and whether the planned room activations are supported by demand. Management said the CAD 21 million Curaleaf contract is committed if Cannara delivers supply, and that Curaleaf will sponsor the EU GMP application, which they described as hard to obtain and likely to take about a year to two years after construction completion. On capacity, management said domestic demand and new product launches are driving the need for more rooms, with the four added rooms to be activated in Q2, Q3, and Q4 after the processing project is done in December. They also addressed competitive pressure, saying it is most pronounced in shelf space and marketing spend, and that live resin vape pricing is being adjusted after competitors caught up.