Delta 9 reports net loss

While Delta 9 (NINE.V) reported significant growth in revenue and gross profit, its overall bottom line was in the red. The company reported a loss per share of $0.03 compared to a loss per share of $0.01 in the corresponding quarter in 2017.

Delta 9 Reports Loss due to Rising Expansion-Related Expenses

Increased expenses

The company’s larger year-over-year losses resulted from an increase in operating expenses. Its general and administrative expenses grew ~70% to $2 million from $1.2 million a year ago. The company’s sales and marketing expenses almost doubled to $265,332 from $108,797 a year ago, while the company had stock-based compensation expenses of $521,598 during the second quarter compared to none in the second quarter of 2017.

The company stated that management expects the losses to decrease following recreational cannabis legalization, which will likely drive sales and expand the company’s profitability. These losses have been a common theme for other companies such as Canopy Growth (WEED) (CGC), Aurora Cannabis (ACB) (ACBFF), and Aphria (APHQF) where expenses outweigh sales. Companies are incurring these expenses to secure future sales after the planned legalization of recreational cannabis (MJ) in Canada on October 17.

As for capital expenditure, the company continues to invest in capacity expansion projects along with retail brick and mortar locations for which the company has secured a license in the province of Manitoba.

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