Canadian cannabis producer BZAM says it has managed to cut annual costs by $20m since its merger with The Green Organic Dutchman last year.
However, the company’s ‘substantial progress’ towards achieving positive EBITDA has come at the expense of nearly half its staff and the loss of a number of facilities.
Sale of the latter, which is expected to take place by Q1 2024, will reportedly net the company over $10m, with $9m of this expected to be put towards reducing the term portion of its debt.
“In addition, by eliminating these facilities, the Company is expected to achieve a substantial reduction in fixed operating overhead expense…which is expected to lead to a significant corresponding improvement in margins,” the company said.
In all, these cuts have enabled BZAM to reduce fixed operating expenses by around $8 annually, while selling, general and administrative (SG&A) expenses have fallen to an estimated annual run rate of $28m, down from estimated pre-merger costs of $48m.
Meanwhile, Q3 net revenues came in at around $20.3m, representing a 5% increase compared to the previous period.
Matt Milich, CEO of the Company, stated “It is no secret that the Canadian cannabis industry needs to work through a period of consolidation.
“While not an easy road, we are proud to be one of the companies leading the charge – and demonstrating what is possible when two consumer favourites combine, focus on sales and our customers, while shedding costs and streamlining operations. The changes we have implemented following the Merger position the Company to thrive in both the Canadian and international markets going forward.”