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Global Nutraceuticals Market is projected to be valued at USD 650 Billion growing at a CAGR of 8.13% during 2022-2027: Bonafide Research

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Clifton, New Jersey, March 09, 2023 (GLOBE NEWSWIRE) — The demand for nutraceuticals has been increasing over the years due to a lack of nutritional food intake, changing food patterns, an increased number of chronic diseases, and the environment. As more people become interested in maintaining good health and preventing chronic diseases, they are turning to nutraceuticals as a way to supplement their diets and support their overall well-being. The world’s population is aging, and older adults are more likely to have health concerns and chronic conditions that can benefit from nutraceuticals. Nutraceuticals offer a convenient way to get the nutrients that people may not be getting enough of in their diets. They are often available in easy-to-take forms, such as capsules or tablets, making them more convenient than consuming whole foods. Nutraceuticals are becoming more widely available, both online and in brick-and-mortar stores, making them easier for consumers to access. There is a growing body of scientific research supporting the use of nutraceuticals for various health conditions. This research is helping to build confidence in these products and increase demand. However, the nutraceutical industry faces several restraints that may impact its growth, including regulatory challenges, limited scientific evidence, a lack of standardization, cost concerns, and safety concerns.

Key Takeaways:

  • From the total dietary supplements market, Vitamins & Botanicals are the most consumed dietary supplements globally accounting for 57% share.
  • From the functional beverages market, Dairy & Dairy alternative beverages are to be in high demand over the forecast period at a CAGR of 11.04%.
  • From the functional food market, Functional foods enriched with soy protein are in high demand to be valued at USD 35.58 Billion by 2027.
  • Distribution of nutraceuticals through Speciality Stores and online stores is to be growing rapidly over the forecast period.
  • The Asia-Pacific region is anticipated to be the fastest-growing market for nutraceuticals at a growth rate of 9.43%.

Consumers have a growing interest in natural and organic products, and this trend is expected to continue in the coming years. Nutraceuticals, which are often derived from natural sources, are well-positioned to take advantage of this trend. As more people become interested in maintaining good health and preventing chronic diseases, the demand for nutraceuticals is likely to increase. This is especially true as scientific evidence continues to support the use of nutraceuticals for various health conditions. The nutraceutical industry has significant growth potential in emerging markets such as Asia-Pacific, Latin America, and the Middle East. These markets offer a large, untapped consumer base that is increasingly interested in health and wellness products. As technology advances, there is an opportunity to develop new and innovative nutraceutical products that are more effective and better tailored to individual needs. This could include individualized nutrition plans and supplements that are designed to address specific health concerns. There is an opportunity for the nutraceutical industry to partner with healthcare providers to promote the use of supplements and other natural products as part of a comprehensive approach to health and wellness.

“The demand for nutraceuticals in Indian markets is expected to exhibit consequential maturation during the forthcoming period. Fundamentally driven by the strong presence and influence of Ayurveda and plant nutrition India is home to 52 agro-climatic zones with access to over 1,700 medicinal plants from Ayurveda. India has the largest FDA-approved contract manufacturing facilities in the world, with 7,400 nutraceutical start-ups backed by high-end incubation hubs such as CCMB, IITs, and other institutions.” Says, Mr. Dhwipal Shah, Research Director with Bonafide Research.

The emergence of the pandemic has had a positive effect on the overall growth of the nutraceutical market. As a preventive measure against the virus, people resorted to increasing their intake of nutritious and functional foods with high zinc, sodium, vitamin D, vitamin C, and mineral content. The increased consumer focus on boosting immunity and aiding overall health as a preventive measure against the Coronavirus has significantly boosted the demand for dietary and health supplements across countries. The suddenly amplified demand for supplements led to increased stress on supply chains. Transportation restrictions resulted in spiked logistics costs for raw materials, which was a major challenge for the market players.

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Functional foods are the most consumed nutraceutical product globally, as they provide health benefits beyond basic nutrition. In addition, many food manufacturers are incorporating functional ingredients into their products to meet consumer demand for healthier options. For example, many breakfast cereals and snack bars now contain added fiber, which can help reduce the risk of heart disease and other health problems. These foods contain berries, nuts, and seeds; whole grains like quinoa, oats, and chia seeds; and fiber in sufficient quantities. They act as antioxidants, which can help protect against cancer and other diseases, improve digestion, boost the immune system, and reduce the risk of heart disease. Many other foods, such as dark chocolate, garlic, and soy products, also have functional properties and are popular among health-conscious consumers. Dairy products, bakery products, and cereals account for nearly 60% of the total functional food market. However, foods enriched with soy nutrients are becoming popular among consumers who have gone vegan or simply want a high protein intake.

Functional beverages are becoming increasingly popular globally as more people seek out drinks that offer health benefits beyond basic hydration. Green tea is a popular functional beverage that contains antioxidants called catechins, which can help protect against cancer and other diseases. It may also help improve brain function and reduce the risk of heart disease. Kombucha is a fermented tea drink that contains probiotics, which can help improve gut health and boost the immune system. It may also help reduce inflammation and improve digestion. Vegetable juice is a good source of vitamins, minerals, and antioxidants and can help improve digestion and reduce inflammation. Some brands of vegetable juice also contain added probiotics or fiber for additional health benefits. Sports drinks are designed to replenish electrolytes lost during exercise and often contain added carbohydrates for energy. They may also contain vitamins and minerals to support overall health. As consumers become more health-conscious, the market for functional beverages is expected to continue to grow in the coming years.

Energy drinks are the most consumed functional beverage by people around the world, with a 42.32% share, particularly among younger adults and adolescents. Energy drinks are beverages that contain high levels of caffeine, sugar, and other stimulants, such as taurine and guarana. They are marketed as a way to boost energy, increase alertness, and improve physical performance. While energy drinks can provide a temporary boost in energy and attention, the potential health risks associated with their consumption have led to concerns among health experts. As a result, some countries have implemented regulations on the marketing and sale of energy drinks, particularly to children and adolescents. Thus, dairy and dairy alternative beverages are gaining traction in consumers’ minds and will grow rapidly in demand in future years at a CAGR of 11.04%.

Dietary supplements play an important role in helping people maintain their overall health by providing essential nutrients that may be lacking in their diets. Dietary supplements are products that contain vitamins, minerals, herbs or other botanicals, amino acids, enzymes, and other substances that are intended to supplement the diet. Many people do not get enough vitamins and minerals from their diets, and dietary supplements can help fill these nutrient gaps. Certain vitamins and minerals, such as vitamin C and zinc, are important for supporting immune function and may help reduce the risk of infection. Calcium and vitamin D are important for maintaining strong bones, and dietary supplements can help ensure that people are getting enough of these nutrients. Some dietary supplements, such as omega-3 fatty acids and antioxidants, may help reduce the risk of chronic diseases such as heart disease, diabetes, and cancer. Some dietary supplements, such as creatine and caffeine, may help improve athletic performance by increasing energy levels and reducing fatigue. Vitamin C, Vitamin D, and B vitamins are the most commonly consumed vitamins as dietary supplements.

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The nutraceutical market is well established in the North American region with the highest share and may continue to lead the market owing to the growing focus of key players on the development of novel products. Older individuals often experience more health complications than younger consumers. Older people in the population will represent an opportunity for revenue to grow. Canada’s dietary supplements hold revenue worth USD 4.22 billion and are expected to grow at a CAGR of 10.85% over the next few years. The primary negative factors affecting this industry are e-commerce sales and high competition. According to the CDC, more women than men take multivitamins in the United States. However, the FDA does not have the authority to approve dietary supplements for safety and effectiveness or to approve their labeling before the supplements are sold to the public. The rise of the low-calorie ready-to-drink carbonated drinks market in the food industry is due to rising demand for clean-label, gluten-free, low-calorie food supplements, and low-carb items.

The emergence of online retail channels and changing shopping market trends in Europe are expected to drive the market in this region. The sustainable growth of the European dietary supplement market will hinge on customized offerings, implying that the one-size-fits-all concept is expected to be replaced by personalized nutrition. The digitalization wave has quickly reached the nutrition sector. Nutritional supplements are expected to play a crucial role in advancing the concept of predictive and proactive health. Functional foods hold a revenue share of 6.82 billion dollars in Germany. The European Food Safety Authority (EFSA), which is a major regulatory body for food supplements and other nutraceutical products, approves a supplement only after rigorous substantiation and evidence-based analysis of the claims made by manufacturers. In countries such as the Netherlands, Belgium, Norway, and Sweden, supplement manufacturers have an immense opportunity to promote and sell unique and specialized products through effective sales strategies, namely, partnerships with digital personal care product selling platforms.

High mortality rates and rising consumer awareness about health-conscious products and chronic diseases are the major drivers for the Asia-Pacific nutraceuticals market’s growth. Functional beverages in Australia are valued at USD 1.08 billion and are further expected to grow significantly at a growth rate of 15.78%. Heart diseases, diabetes, and cancer are among the top causes of mortalities prevalent in the APAC region that increase with the consumption of these products. Innovations by food and beverage organizations based on specific nutritional values and unique ingredients will further increase the adoption of nutraceuticals in the region. Consequently, several pharmaceutical companies are partnering with food and beverage brands, which are anticipated to increase the sales of dietary supplements like probiotics, omega-3 fatty acids, fiber, carotenoids, and others. The market players are researching and developing cannabis-based nutraceuticals to strengthen the legitimacy of cannabis as a beneficial ingredient. Researchers, government officials, and representatives are participating in several international events, such as the Nutraceutical and Functional Food Asia Pacific Summit. Countries such as India, Singapore, Indonesia, and Malaysia are expected to be lucrative markets for nutraceuticals in the APAC region.

The growth of the South American nutraceuticals market is stirred by multiple factors, including the rising cost of healthcare, a boost in the number of entrepreneurs foraying into the nutraceuticals industry, growing health consciousness among consumers, and the introduction of different effective products. Functional foods occupy half of the total share of the nutraceuticals market in Colombia. The key drivers of the market are the increase in lifestyle diseases, inadequate nutrition, and increased life expectancy. A shift is observed from synthetic supplements to natural and organic ingredients among consumers. Lack of awareness in the developing world about these nutraceutical ingredients is restricting the growth of the market.

Retail and pharmacy development and advancements in product offerings are some of the prominent factors driving the demand for nutraceutical products in the Middle East and Africa region. Dietary supplements in the UAE are valued at USD 0.80 billion and are further expected to grow at a CAGR of 7.63%. The children in the region are often given nutraceuticals to attain proper growth in their developing bodies. But, it has been found that an aging population also has a demand for nutraceutical products due to the healthy ingredients used in the nutraceuticals. A proactive lifestyle is driving increasing acceptance of nutraceuticals across the region. The increasing demand for milk and meat has led animal feed manufacturers to add functional foods to their animal feed. This is strengthening the Middle East and African nutraceuticals market. The increasing incidence of non-communicable diseases and rising medical costs are expected to increase the demand for Middle East and African nutraceuticals.

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Considered in the Report

  •   Geography: Global
  •   Historic Year: 2016
  •   Base year: 2021
  •   Estimated year: 2022
  •   Forecast year: 2027

Table of Content

1.     Executive Summary
2.     Report Methodology
3.     Market Structure
3.1.  Market Considerate
3.2.  Market Definition
4.     Economic /Demographic Snapshot
5.     Global Nutraceuticals Market Outlook
5.1.  Market Size By Value
5.2.  Market Share
5.2.1.     By Region
5.2.2.     By Country
5.2.3.     By Company
5.2.4.     By Product Type
5.2.5.     By Dietary Supplements’ Type
5.2.6.     By Functional Beverages Type
5.2.7.     By Functional Foods Type
5.2.8.     By Distribution Channel Type
6.     North America Nutraceuticals Market Outlook
6.1.  Market Size By Value
6.2.  Market Share
6.2.1.     By Country
6.2.2.     By Product Type
6.2.3.     By Dietary Supplements’ Type
6.2.4.     By Functional Beverages Type
6.2.5.     By Functional Foods Type
6.2.6.     By Distribution Channel Type
6.3.  US Nutraceuticals Market Outlook
6.3.1.     Market Size By Value
6.3.2.     Market Share
6.3.2.1.         By Product Type
6.3.2.2.         By Dietary Supplements’ Type
6.3.2.3.         By Functional Beverages Type
6.3.2.4.         By Functional Foods Type

TOC continued….

Market Segmentation Details
By Product Type
  • Dietary Supplements
  • Functional Beverages
  • Functional Foods
By Dietary Supplements
  • Vitamins
  • Minerals
  • Botanicals
  • amino acid & proteins
  • probiotics
  • Others (fibers, specialty carbohydrates, omega 3, carotenoids, glucosamine, chondroitin, and polyols)
By Functional Beverages Type
  • Energy Drinks
  • Sports Drink
  • Fortified Juice
  • Dairy and Dairy Alternative Beverage
  • Other Functional Beverages
By Functional Foods Type
  • Bakery & Cereals
  • Dairy Products
  • Meat, Fish & Eggs
  • Soy Products
  • Fats & Oils
  • Others
By Distribution Channel
  • Supermarkets/Hypermarkets
  • Convenience Stores
  • Drug and Pharmacies
  • Online Retail Stores
  • Other Distribution Channels (Speciality stores, etc)
By Region
By Country
Company profiles
  • Herbalife Nutrition
  • Amway Corp.
  • Bayer AG
  • Pfizer Inc.
  • GlaxoSmithKline plc.
  • Abbott Laboratories
  • Glanbia plc
  • Archer Daniels Midland Company
  • Nu Skin Enterprises, Inc.
  • Nestle SA
  • Danone SA
  • General Mills Inc.
  • Tyson Foods
  • Monster Beverage Corporation
  • The Coca-Cola Company
  • Arla Foods amba
  • Hearthside Food Solutions LLCPepsiCo Inc.Celsius Holdings Inc.
  • Nutri-Nation Functional Foods
Other Market Details
  • Key Drivers & Key Challenges,
  • Market Trends and Developments,
  • Strategic Recommendations

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Related Reports:

The Global Dietary Supplements Market size was valued at USD 148.35 billion in 2021 and is expected to expand at a CAGR of 8% from 2021 to 2027. They are used in cardiac health, bone & joint health, energy-weight management, and immunity-digestive health, etc. The energy & weight management application has 29.4% of the market share. The supplements are sold at pharmacies-drug stores, online platforms, and supermarkets/hypermarkets. The dietary supplements are rich in vitamins, minerals, amino acids & probiotic supplements, etc. Among these, the vitamin segment is leading the market in terms of value share. Children and teenagers like to eat gummies and soft gel forms. The majority of dietary supplements are consumed by adult yet certain individual needs them, especially to protect against birth defects, women who may get pregnant should ingest 400 mg of folate each day, either through food or supplements. The increased vegan diets followed by gen X, need dietary supplements. North America region is dominating the market in 2021 followed by Asia-Pacific. Europe and South America are together contributing for more than 22% in the same year, However, Middle East & Africa region is growing with steady market growth. 

The global protein ingredients market size was valued at USD 53.5 billion in 2021 and is expected to expand at a CAGR of more than 6% from 2021 to 2027. Increasing consumption of these products among health-conscious and elderly consumers is fueling the market growth. Moreover, a rise in the innovation of several proteins by various manufacturers that constitute a wide range of amino acids and perform specific functions, including satiety, muscle repair, weight loss, and energy balance, is expected to present immense growth opportunities for the market. Protein ingredients are now being used in diverse applications, for instance, isolates have high dispersibility and very fine particle size which are widely used in dairy applications. Consumers’ belief in the health benefits associated with these products has been the key driver for this market over the past few years and the trend is anticipated to continue over the forecast period. EuropeNorth America and Asia-Pacific are considered as the major markets for protein ingredients. However, South America and Middle East & Africa are growing with promising CAGR by 2022-27. 

The Global Animal Protein Ingredients Market is anticipated to grow at more than 5% CAGR for 2022–2027. Growing financial support from various growers has encouraged consumers to effectively grow poultry and livestock, which will in turn fuel the market’s growth. Also, the growing consumer awareness relating to the extrinsic quality of meat will propel the global meat market, accelerating the animal protein ingredients market. Major manufacturers are expanding the array of isolates and concentrating to cater to consumer requirements. Egg Protein and Whey Protein lead the animal protein types with Europe as a leading region with almost 34% share of the total market. Dairy proteins are emerging as lucrative segments, increasingly in the Asia-Pacific and Latin American economies. Whey-based and casein-based proteins have emerged as popular, high-quality categories across these regions. The USA is anticipated to be a prominent market during the forecast period owing to increasing awareness of organic food consumption as well as higher penetration of advanced technologies.

The Global Plant Protein Ingredients Market is anticipated to grow at more than 7% CAGR during the forecast period. With accelerated demand for infant nutrient formulas, manufacturers of plant protein ingredients across the globe are developing and introducing notable improvements in the quality of products. With that, the growing dilemma of lactose intolerance in infants during the last few years has increased the demand for plant protein ingredients. Among these regions, North America is leading the overall market. The increasing consumption of healthy food and beverages among health-conscious people, along with the rising adoption of organic food in the US and Canada, is fuelling market growth. On the other hand, the European and Asia-Pacific regions are anticipated to witness higher market growth by 2027.

The Global Active Pharmaceutical Ingredients Market is expected to expand at a CAGR of more than 6.8% from 2022 to 2027. Active pharmaceutical ingredients and excipients are the two most important ingredients in the production of a medicine. The API is the active ingredient in the medicine, whereas the excipient is a substance that isn’t the drug but acts as a medium to aid in its absorption by the body. The API is created by a series of chemical reactions rather than a single reaction from the raw components. An intermediate is a chemical compound that is in the process of creating an API from a raw source. It is purified until it reaches a very high degree of purity and then becomes an API after this lengthy production procedure. Active Pharmaceutical Ingredients (API) of good quality is core to the manufacturing of effective and safe essential drugs. North America region is leading the market in 2021 followed by Asia-Pacific and Europe. On the other hand, Latin America and Middle East & Africa are projecetd to witness moderate growth rate. 

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Steven Thomas – Sales & Marketing Manager
E-mail: [email protected]
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Europe: +44 20 8089 0049
North America: +1 201 793 8545 
https://www.bonafideresearch.com/

About us:

Bonafide Research is the fastest-growing global market research and consulting company, providing syndicated research reports, customized research reports, and consulting services to a range of verticals. They have been closely working with a wide client base ranging from Fortune 1000 companies to small and medium enterprises, helping them track the constantly changing market scenario. Bonafide has continuously made efforts to evolve and enhance the report quality with each passing day. Bonafide Research has a strong base of analysts and consultants from assorted areas of expertise who track the latest economic, demographic, trade, and market data globally and help clients make informed business decisions. They periodically update their market research studies to ensure that their clients get the most recent, relevant, actionable, and valuable information for strategy development and to extract tangible results.

Cannabis

IM Cannabis Reports 2023 Financial Results

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im-cannabis-reports-2023-financial-results

TORONTO and GLIL YAM, Israel, March 28, 2024 /PRNewswire/ — IM Cannabis Corp. (the “Company” or “IMC“) (NASDAQ: IMCC) (CSE: IMCC), an international medical cannabis company, announced its financial and operational results for the year ended December 31, 2023, the highlights of which are included in this news release. All figures are reported in Canadian dollars. The Company’s full set of consolidated audited financial statements for the years ended December 31, 2023 and 2022 (the “Annual Financial Statements“) and accompanying management’s discussion and analysis (the “Annual MD&A“) can be accessed by visiting the Company’s website at https://investors.imcannabis.com/, and its profile pages on SEDAR+ at www.sedarplus.ca, and EDGAR at http://www.sec.gov/edgar.

FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2023

  • Revenue decreased to $48.8 million for the fiscal year ended December 31, 2023 (compared to $53.3 in 2022), representing a decrease of 10%.
    • Primarily due to negative currency fluctuations and the impact of the Israel-Hamas war on the Company’s operations.
  • Revenue decreased to $10.7 million for the three months ended December 31, 2023 (compared to $14.5 million in 2022), representing a decrease of 26%.
    • Primarily due to the interruption on the Company’s supply chain caused by the Israel-Hamas war and the Company discounting certain outstanding inventory at lower prices.
  • Gross profit increased to $9.8 million for the fiscal year ended December 31, 2023 (compared to $9.2 million in 2022), representing an increase of 7.5%
  • Gross profit decreased to $0.8 million for the three months ended December 31, 2023 (compared to $2.6 million in 2022), representing a decrease of 68%
    • Primarily due to the interruption on the Company’s supply chain caused by the Israel-Hamas war and the Company discounting certain outstanding inventory at lower prices.
    • The Company’s fair value adjustment was approximately $1 million for the fiscal year ended December 31, 2023 (compared to $2.1 million in 2022).
  • G&A expenses decreased to $11 million for the fiscal year ended December 31, 2023 (compared to $21.5 million in 2022), representing an decrease of 49%
  • G&A expenses decreased to $3.3 million for the three months ended December 31, 2023 (compared to $9.8 million in 2022), representing a decrease of 66%
    • Primarily due to the impairment on Y2022 and restructuring and HC adjustments in 2023.
  • Selling and marketing expenses decreased to $10.8 million for the fiscal year ended December 31, 2023 (compared to $11.5 million in 2022), representing an decrease of 6%
  • Selling and marketing expenses decreased to $2.8 million for the three months ended December 31, 2023 (compared to $3.1 million in 2022), representing a decrease of 10%
    • Primarily due to a decrease in share based compensation payments and a restructuring of the Company’s personnel.
  • Net Loss from continuing operations for the fiscal year ended December 31, 2023 was $10.2 million, as compared to $24.9 million in 2022.
  • Net Loss from continuing operations for the three months ended December 31, 2023 was $3.5 million, as compared to a Net Loss of $9.6 million in the fourth quarter of 2022.
  • Diluted Loss per Share for the fiscal year ended December 31, 2023 was $0.74, compared to a loss of $3.81 per Share in 2022.
  • Diluted Loss per Share for the three months ended December 31, 2023  was $(0.25), compared to a basic loss of $)2.94( per share and a diluted loss of $)3.55( per share in for the three months ended December 31, 2022.
  • Cash and Cash Equivalents as of December 31, 2023, was $1.8 million, compared to $2.4 million as of December 31, 2022. 
  • Total assets were $48.8 million as of December 31, 2023, compared to $60.7 million as of December 31, 2022, representing a decrease of 20%.
    • Primarily attributed to an inventory reduction of about $6.6 million, a reduction in other current assets of $1.8 million and a reduction of non-current assets of about $3.5 million
  • Total Liabilities were $35.1 million as of December 31, 2023, compared to $36.9 as of December 31, 2022, representing a decrease of about 5%. 
    • Primarily attributed to a reduction in trade payables of $6.1 million.
  • Operating expenses decreased to $22.6 million for the year ended December 31, 2023 (compared to $40 million in 2022), representing a decrease of 43%
  • Operating expenses decreased to $6 million for the three months ended December 31, 2023 (compared to $13.3 million in 2022), representing a decrease of 55%
  • Adjusted EBITDA1 decreased to $8 million for the year ended December 31, 2023, (compared to $11.5 in 2022), representing a decrease of 30%
  • Total Dried Flower sold in 2023 was approximately 8,609 kg with an average selling price of $5.14 per gram (compared to approximately 6,794kg, with an average selling price of $7.12 per gram in 2022).
    • Primarily due to increased competition within the retail segment and the Company discounting certain outstanding inventory at lower prices.
  • Total Dried Flower sold in the fourth quarter of 2023 was about 2,082kg with an average selling price of $4.52 per gram (compared to about 2,334kg with an average selling price of $5.19 per gram in 2022).
    • Primarily due to increased competition within the retail segment and the Company discounting certain outstanding inventory at lower prices.

The Annual Financial Statements include a note regarding the Company’s ability to continue as a going concern. The Annual Financial Statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern. For more information, please refer to the “Liquidity and Capital Resources” and “Risk Factors” sections in the 2023 Annual MD&A.

Management Commentary

“IMC Germany delivered accelerated growth in 2023, growing 181% from $252K in 2022 to $709K in 2023. During this time, IMC Germany was #1 in sales per stock keeping unit and posted the highest growth against its competitors in the German market.2 With the regulatory rescheduling of cannabis in Germany set to occur effective April 1st, the Company hopes to continue its growth in the market as the market evolves,” said Oren Shuster, Chief Executive Officer of IMC. “In addition, as we are constantly looking for opportunities to maximize shareholder value, we are hopeful that our potential reverse merger with Israel-based Kadimastem Ltd., a clinical cell therapy public company traded on the Tel Aviv stock exchange under the symbol (TASE: KDST) will proceed as expected, which we believe will create significant value for the shareholders.”

“As previously warned and as expected, unfortunately, the Israel-Hamas war had a negative impact on our fourth quarter 2023 results, which weighed on our full year results. Due to the ongoing conflict, there was a 6% decrease in our yearly revenue. Coupled with our fourth quarter of 2023 inventory reduction, the war caused our fourth quarter gross profit to decrease by 68% as compared to the fourth quarter of 2022. However, our gross profit for 2023 increased by 7.5% to $9.8 million as compared to last year,” said Uri Birenberg, Chief Financial Officer of IMC. “Partially offsetting these declines, we were able to reduce our operating costs in the fourth quarter of 2023 by 55% as compared to the fourth quarter of 2022, ending the year with a 43% reduction in our operating costs as compared to last year, as we leaned further into our goal of active cost management.”

Conference Call 

The Company will host a Zoom web conference call today at 9:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Investors are invited to register by clicking here. All relevant information will be sent upon registration.

If you are unable to join us live, a recording of the call will be available on our website at https://investors.imcannabis.com/ within 24 hours after the call.

Non-IFRS Measures

This press release makes reference to “Gross Margin” and “Adjusted EBITDA”, which are financial measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as complementary information to the Company’s IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should neither be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

For an explanation of how management defines Gross Margin and Adjusted EBITDA, see the 2023 MD&A.

We reconcile these non-IFRS financial measures to the most comparable IFRS measures as set out below:

About IM Cannabis Corp.

IM Cannabis Corp. (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 exited operations in Canada to pivot its focus and 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 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. Until recently, the Company also actively operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries, where it cultivated, processed, packaged, and sold premium and ultra-premium cannabis at its own facilities under the WAGNERS and Highland Grow brands for the adult-use market in Canada. The Company has exited operations in Canada and considers these operations as discontinued.

Disclaimer for Forward-Looking Statements

This press release contains forward-looking information or forward-looking statements under applicable Canadian and United States 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: the Company leaving the Canadian cannabis market to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany; the impact of the Israel-Hamas war on the Company, including its operations and the medical cannabis industry in Israel; the timing and impact of the partial legalization of medicinal cannabis in Germany, including, the Company having it “all in house”, the Company being positioned to take advantage of the partial legalization, the Company’s growth in 2024, the market growth for medicinal cannabis in Germany, and the stated benefits of the Company’s EU-GMP processing facility and an EU-GDP logistics center; the Company to host a teleconference meeting as stated; and the Company’s stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.

Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to: the Company’s ability to focus and resources to achieve sustainable and profitable growth in its highest value markets; the Company’s ability to mitigate the impact of the Israel-Hamas war on the Company; the Company’s ability to take advantage of the partial legalization of medicinal cannabis in Germany; the Company’s ability to host a teleconference meeting as stated; and the Company’s ability to carry out its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.

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; risks surrounding war, conflict and civil unrest in Eastern Europe and the Middle East, including the impact of the Israel-Hamas war on the Company, its operations and the medical cannabis industry in Israel; risks associated with the Company focusing on the Israel and Germany markets; the inability of the Company to achieve sustainable profitability and/or increase shareholder value; the inability of the Company to actively manage costs and/or improve margins; the inability of the company to grow and/or maintain sales; the inability of the Company to meet its goals and/or strategic plans; the inability of the Company to reduce costs and/or maintain revenues; the Company’s inability to take advantage of the partial legalization of medicinal cannabis in Germany; and the Company’s inability to host a teleconference meeting as stated.

Please see the other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual report dated March 28, 2024, which is available on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca and Edgar at www.sec.gov/edgar. 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.

1 Earnings before interest, taxes, depreciation, and amortization (“EBITDA“) and Adjusted EBITDA. These measures do not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS“) and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a supplemental measure of the Company’s operating performance and therefore highlight trends in Company’s core business that may not otherwise be apparent when relying solely on IFRS measures. Management uses non-IFRS measures in measuring the financial performance of the Company.

2 Based on reporting by Insight Health’s as of December 31, 2023.

 

Company Contact: 

Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected]

Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
[email protected]

 

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Canadian Dollars in thousands

December 31,

Note

2023

2022

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$    1,813

$        2,449

Trade receivables

6

7,651

8,684

Advances to suppliers

936

1,631

Other accounts receivable

7

3,889

3,323

Inventory

9

9,976

16,585

24,265

32,672

NON-CURRENT ASSETS:

Property, plant and equipment, net

10

5,058

5,221

Investments in affiliates

15c

2,285

2,410

Right-of-use assets, net

12

1,307

1,929

Deferred tax assets, net

17

763

Intangible assets, net

11

5,803

7,910

Goodwill

11

10,095

9,771

24,548

28,004

Total assets

$       48,813

$       60,676

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Canadian Dollars in thousands

December 31,

Note

2023

2022

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Trade payables

14

$        9,223

$       15,312

Credit from banks and others

13

12,119

9,246

Other accounts payable and accrued expenses

15

6,218

6,013

Accrued purchase consideration liabilities

5

2,097

2,434

PUT Option liability

2,697

Current maturities of operating lease liabilities

12

454

814

32,808

33,819

NON-CURRENT LIABILITIES:

Warrants measured at fair value

17

38

8

Operating lease liabilities

12

815

1,075

Credit from banks and others

394

399

Employee benefit liabilities, net

16

95

246

Deferred tax liability, net

19

963

1,332

2,305

3,060

Total liabilities

35,113

36,879

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:

20

Share capital and premium

253,882

245,776

Translation reserve

95

1,283

Reserve from share-based payment transactions

9,637

15,167

Accumulated deficit

(249,145)

(239,574)

Total equity attributable to shareholders of the Company

14,469

22,652

Non-controlling interests

(769)

1,145

Total equity

13,700

23,797

Total equity and liabilities

$       48,813

$       60,676

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

Canadian Dollars in thousands

Year ended December 31,

Note

2023

2022

 *) 2021

Revenues

21

$       48,804

$       54,335

$       34,053

Cost of revenues

21

37,974

43,044

25,458

Gross profit before fair value adjustments

10,830

11,291

8,595

Fair value adjustments:

Unrealized change in fair value of biological assets

(315)

6,308

Realized fair value adjustments on inventory sold in the year

(984)

(1,814)

(8,570)

Total fair value adjustments

(984)

(2,129)

(2,262)

Gross profit after fair value adjustments

9,846

9,162

6,333

General and administrative expenses

21

11,008

21,460

17,221

Selling and marketing expenses

21

10,788

11,473

6,725

Restructuring expenses

1

617

4,383

Share-based compensation

20

225

2,637

5,422

Total operating expenses

22,638

39,953

29,368

Operating loss

(12,792)

(30,791)

(23,035)

Finance income

7,006

6,703

23,544

Finance expenses

(3,671)

(1,972)

(673)

Finance income (expense), net

3,335

4,731

22,871

Loss before income taxes

(9,457)

(26,060)

(164)

Income tax expense (benefit)

18

771

(1,138)

500

Net loss from continuing operations

(10,228)

(24,922)

(664)

Net loss from discontinued operations, net of tax

25

(166,379)

(17,854)

Net loss

(10,228)

(191,301)

(18,518)

*)       Reclassified in respect of discontinued operations – see Note 25.

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

Canadian Dollars in thousands, except per share data

Year ended December 31,

Note

2023

2022

 *) 2021

Other comprehensive income that will not be reclassified to profit or loss in subsequent periods:

Remeasurement gain on defined benefit plans

38

59

21

Exchange differences on translation to presentation currency

(894)

(1,238)

858

Total other comprehensive income that will not be reclassified to profit or loss in subsequent periods

(856)

(1,179)

879

Other comprehensive income that will be reclassified to profit or loss in subsequent periods:

Adjustments arising from translating financial statements of foreign operation

231

(246)

530

Total other comprehensive income (loss)

(625)

(1,425)

1,409

Total comprehensive loss

$     (10,853)

$    (192,726)

$      (17,109)

Net loss attributable to:

Equity holders of the Company

$      (9,498)

$    (188,890)

$      (17,763)

Non-controlling interests

(730)

(2,411)

(755)

$       (10,228)

$    (191,301)

$      (18,518)

Total comprehensive loss attributable to:

Equity holders of the Company 

$        (10,648)

$    (190,162)

$      (16,357)

Non-controlling interests 

$        (205)

(2,564)

(752)

$        (10,853)

$    (192,726)

$     (17,109)

Earnings (loss) per share attributable to equity holders of the Company from continuing operations:

22

Basic earnings (loss) per share (in CAD)

$              (0.74)

$          (3.13)

$            0.02

Diluted loss per share (in CAD)

$              (0.74)

$          (3.81)

$           (3.62)

Loss per share attributable to equity holders of the Company from discontinued operations:

Basic and diluted loss per share (in CAD)

$        (23.17)

$          (3.08)

Loss per share attributable to equity holders of the Company from net loss:

Basic earnings (loss) per share (in CAD)

$              (0.74)

$        (26.3)

$          (3.06)

Diluted loss per share (in CAD)

$              (0.74)

$        (26.98)

$          (6.7)

*)       Reclassified in respect of discontinued operations – see Note 25.

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Canadian Dollars in thousands

Share capital and premium

Treasury Stock

Reserve from share-based payment transactions

Translation reserve

Accumulated deficit

Total

Non-controlling interests

Total
equity

Balance as of January 1, 2021

$     37,040

$              –

$       5,829

$       1,229

$   (33,001)

$     11,097

$       1,513

$     12,610

Net loss

(17,763)

(17,763)

(755)

(18,518)

Total other comprehensive income

1,385

21

1,406

3

1,409

Total comprehensive income (loss)

1,385

(17,742)

(16,357)

(752)

(17,109)

Issuance of common shares, net of issuance costs of $3,800

195,259

195,259

2,948

198,207

Purchase of treasury common shares

(660)

(660)

(660)

Exercise of warrants and compensation options

4,293

4,293

4,293

Exercise of options

1,053

(920)

133

133

Share-based compensation

7,471

7,471

7,471

Expired options

32

(32)

Balance as of December 31, 2021

237,677

(660)

12,348

2,614

(50,743)

201,236

3,709

204,945

Net loss

(188,890)

(188,890)

(2,411)

(191,301)

Total other comprehensive income (loss)

(1,331)

59

(1,272)

(153)

(1,425)

Total comprehensive loss

(1,331)

(188,831)

(190,162)

(2,564)

(192,726)

Issuance of treasury common shares

660

660

660

Issuance of shares, net of issuance costs of $178

6,818

6,818

6,818

Exercise of options

992

(659)

333

333

Share-based compensation

3,767

3,767

3,767

Expired options

289

(289)

Balance as of December 31, 2022

245,776

15,167

1,283

(239,574)

22,652

1,145

23,797

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Canadian Dollars in thousands

Share capital
and
premium*)

Reserve from
share-based
payment
transactions

Translation
reserve

Accumulated
deficit

Total

Non-controlling interests

Total
equity

Balance as of December 31, 2022

245,776

15,167

1,283

(239,574)

22,652

1,145

23,797

Net loss

(9,498)

(9,498)

(730)

(10,228)

Total other comprehensive income (loss)

(1,188)

38

(1,150)

525

(625)

Total comprehensive loss

(1,188)

(9,460)

(10,648)

(205)

(10,853)

Issuance of treasury common shares

2,351

2,351

2,351

Issuance of shares, net of issuance costs of $178

Exercise of options

Other comprehensive income Classification

(111)

(111)

(1,709)

(1,820)

Share-based compensation

225

225

225

Expired options

5,755

(5,755)

Balance as of December 31, 2023

253,882

9,637

95

(249,145)

14,469

(769)

13,700

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Canadian Dollars in thousands

Year ended December 31,

2023

2022

2021

Cash provided from operating activities:

Net loss

$     (10,228)

$ (191,301)

$   (18,518)

Adjustments for non-cash items:

Unrealized gain on changes in fair value of biological assets

(84)

(7,210)

Fair value adjustment on sale of inventory

984

4,342

8,796

Fair value adjustment on warrants, investments, and accounts receivable

(6,955)

(6,000)

(21,638)

Depreciation of property, plant and equipment

644

3,044

3,021

Amortization of intangible assets

1,758

2,343

1,158

Depreciation of right-of-use assets

594

1,944

1,550

Impairment of goodwill

107,854

275

Impairment of property, plant and equipment

2,277

Impairment of intangible assets

7,199

Impairment of right-of-use assets

1,914

Finance income, net

3,019

6,532

1,262

Deferred tax payments (benefit), net

394

(3,004)

278

Share-based payments

225

3,767

7,471

Share based acquisition costs related to business combination

807

Revaluation of other accounts receivable

3,982

Restructuring expenses

8,757

Loss from revaluation of investments

601

1,264

144,867

(4,230)

Changes in non-cash working capital:

Increase (decrease) in trade receivables, net

2,320

6,058

(6,602)

Increase (decrease) in other accounts receivable and advances to suppliers

1,299

3,622

845

Decrease in biological assets, net of fair value adjustments

565

6,412

Increase (decrease) in inventory, net of fair value adjustments

4,771

883

(19,707)

Increase (decrease) in trade payables

(6,098)

11,284

5,573

Changes in employee benefit liabilities, net

(139)

(63)

28

Increase in other accounts payable and accrued expenses

(750)

12,126

2,661

1,403

34,475

(10,790)

Taxes paid

(514)

(681)

(834)

Net cash used in operating activities

(8,075)

(12,640)

(34,372)

The accompanying notes are an integral part of the consolidated financial statements.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Canadian Dollars in thousands

Year ended December 31,

2023

2022

2021

Cash flows from investing activities:

Purchase of property, plant and equipment

(581)

(1,562)

(4,578)

Proceeds from sales of property, plant and equipment

210

Proceeds from loans receivable

350

7,796

Purchase of intangible assets

(17)

Acquisition of businesses, net of cash acquired

(12,536)

Deconsolidation of subsidiary (see Note 25)

(406)

Investments in financial assets

(13)

Proceeds from sale of investment

319

Proceeds from (investment in) restricted deposits

17

Investments in associates

(601)

(125)

Net cash used in investing activities

(1,182)

(1,533)

(9,012)

Cash provided by financing activities:

Proceeds from issuance of share capital, net of issuance costs

1,688

3,756

28,131

Proceeds from issuance of warrants measured at fair value

6,585

11,222

Proceeds from exercise of warrants

3,682

Proceeds from exercise of options

333

133

Repayment of lease liability

(586)

(1,656)

(633)

Payment of lease liability interest

(63)

(1,429)

(1,347)

Proceeds from loans

5,482

9,636

7,804

Repayment of loans

(4,827)

(4,976)

Interest paid

(1,664)

(902)

(261)

Proceeds from discounted checks

2,802

Net cash provided by financing activities

9,417

4,762

48,731

Effect of foreign exchange on cash and cash equivalents

(796)

(2,043)

(329)

Increase (decrease) in cash and cash equivalents

(636)

(11,454)

5,018

Cash and cash equivalents at beginning of year

2,449

13,903

8,885

Cash and cash equivalents at end of year

$      1,813

$      2,449

$    13,903

Supplemental disclosure of non-cash activities:

Right-of-use asset recognized with corresponding lease liability

$         309

$         613

$      1,678

Conversion of warrant and compensation options into common shares

$                 –

$             –

$         611

Issuance of shares in payment of purchase consideration liability

$                 –

$      3,061

$             –

Issuance of shares in payment of debt settlement to a non-independent director of the company

$      1,061

$             –

$             –

 

 

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