• Achieved Adjusted EBITDA1 of $1.9 million for the year ended December 31, 2022
  • 57% net revenue growth to $35.5 million in 2022 compared to 2021
  • Achieved operating cash flow of $2.0 million for the year ended December 31, 2022
  • 6.3%2 national market share of premium flower and pre-rolls in 2022

VANCOUVER, British Columbia, April 03, 2023– Rubicon Organics Inc. (TSXV: ROMJ) (OTCQX: ROMJF) (“Rubicon Organics”, “Rubicon”, or the “Company”), a licensed producer focused on cultivating and selling organic certified, premium cannabis, today reported its financial results for the fourth quarter and year ended December 31, 2022 (“Q4 2022”). All amounts are expressed in Canadian dollars.

“Rubicon Organics has achieved significant financial milestones in a fiercely competitive environment, delivering Adjusted EBITDA profitability and positive cash flow from operating activities for the 2022 year. These results are a testament to the unwavering commitment of our team to quality, which is now being acknowledged by our customers. Rubicon is at an inflection point, poised for continued growth and anticipating further financial strength in 2023 as we seek to meet the market’s demand for our products. Despite negative investor sentiment in the cannabis sector, I believe that the winners of the Canadian cannabis sector will emerge in 2023, and Rubicon is well-positioned to be among them,” said Margaret Brodie, Interim Chief Executive Officer and Chief Financial Officer.

Q4 2022 Highlights:

  • Net revenue of $11.0 million was an increase of 61% from the same period in 2021
  • Achieved Adjusted EBITDA1 of $1.3 million
  • Achieved positive operating cash flow of $2.8 million
  • Achieved positive Free Cash Flow3 of $1.9 million
  • 2.4%4 national market share of flower and pre-rolls1
  • 5.4%5 national market share of premium flower and pre-rolls

In the fourth quarter of 2022, the Company earned $11.0 million of net revenue, an increase of $0.5 million or 5% when compared to the third quarter of 2022 (September 30, 2022: $10.5 million). The fourth quarter net revenue was relatively flat from the third quarter as Rubicon had certain facility maintenance and downtime which impacted our crop yields and availability of supply in the autumn. This was offset by the positive momentum for Rubicon in the pre-roll category following the launch of infused pre-rolls under both Simply Bare™ Organic and 1964 Supply Co™. During Q4 we also began selling through the OCS’s flow through program, which has proven useful for products where we do not yet have consistent supply or demand and in Quebec, we benefitted from additional flower and pre-roll listings.

Production costs in the fourth quarter 2022 decreased by $0.3 million or 10% when compared to the third quarter of 2022 (three months ended December 31, 2022: $2.6 million as compared to three months ended September 30, 2022: $2.9 million). We can see the efficiencies gained through process improvements in our cultivation system and cost savings as a result of completion of the BC Hydro project from September 2022 onwards.

Inventory expensed to cost of sales amounted to $3.7 million in the fourth quarter of 2022, which is an increase of $0.3 million or 9% when compared to the third quarter of 2022 (September 30, 2021: $3.4 million). This ratio was marginally ahead of the net revenue growth due to product mix, with a higher proportion of sales derived from concentrate products in the fourth quarter, most notably infused pre-rolls.

The Company incurred operating expenses of $4.8 million in the fourth quarter of 2022 which is an increase of $1.0 million or 26% when compared to the third quarter of 2022 (September 30, 2022: $3.8 million). The increase is mainly due to non-cash share-based compensation from the issuance of deferred share units and restricted share units compared to the prior quarter. The Company has also incurred additional corporate expenses relating to the professional fees such as for the search for new board nominees and a year-to-date true up of the bonus accrual to account for performance under the Company bonus plan.

Net loss during the fourth quarter of 2022 was $3.1 million, compared to net profit in the third quarter of 2022 of $2.0 million. The movement was driven primarily by a quarter over quarter decrease to fair value adjustments to cannabis plants of $4.3 million. There has been a change in growing approach over the past year in order to increase plant density and uniformity. This has resulted in a higher number of plants, therefore decreasing the number of grams per plant, which has been reflected in the Company’s fair value of its cannabis inventory.

2022 Highlights:

  • Record net revenue of $35.5 million (57% increase) for the year ended December 31, 2022
  • Achieved Adjusted EBITDA1 of $1.9 million for the year ended December 31, 2022
  • Achieved operating cash flow of $2.0 million for the year ended December 31, 2022
  • Achieved positive Free Cash Flow3 of $2.2 million in the second half of 2022
  • Extended existing Debenture for 18 months to December 31, 2024
  • 2.4%5 national market share of flower and pre-rolls
  • 6.3%2 national market share of premium flower and pre-rolls

For the year ended December 31, 2022, the Company reported net revenue of $35.5 million, a 57% increase compared to the prior year. For the year ended 31 December 2022, Adjusted EBITDA was a profit of $1.9 million, compared to a loss of $8.0 million in the twelve months ended December 31, 2022.

2022 Annual Results of Operations

  Three months ended Twelve months ended
  December 31,

December 31,
December 31,

December 31,
Net revenue 10,991,985 6,815,183 35,518,133 22,611,804
Production costs 2,559,782 2,065,414 10,484,602 9,155,425
Inventory expensed to cost of sales 3,682,364 2,939,990 11,957,149 9,500,187
Inventory written off or provided for 241,103 279,977 865,868 1,651,258
Gross profit before fair value adjustments 4,508,736 1,529,802 12,210,514 2,304,934
Fair value adjustments to cannabis plants, inventory sold, and other charges (2,379,925) 687,705 1,595,830 (798,047)
Gross profit (loss) 2,128,811 2,217,507 13,806,344 1,506,887
Profit (loss) from operations (2,717,482) (2,588,676) (2,588,676) (13,247,417)
Adjusted EBITDA 1,266,349 (570,480) 1,907,698 (8,006,273)


As At: December 31,

December 31,
Cash and cash equivalents 8,294,117 11,583,443  
Working capital 19,321,971 20,236,272  

Net revenue

The Company delivered record net revenue of $35.5 million for the year ended December 31, 2022. This represents significant net revenue growth of 57%, compared to the prior year. Across the year, the Company doubled the number of SKUs for sale with the launch of several new strains, and product formats compared to the prior year. The sales growth was underpinned by an increase in product yield, THC and quality from our Delta Facility.

Revenue growth in 2022 versus the prior year was primarily driven by the expansion of 1964 Supply Co™, having a full year of sales in all key markets, continued range expansion, and a new hero strain with Comatose.

Simply Bare™ Organic delivered flat net revenue compared to prior year. The brand was particularly affected by the overall market decrease in flower pre-rolls with the market shifting to infused pre-rolls, increased quality competition and price compression. In the second half of the year, performance improved with the launch of new strains, larger formats, and an infused pre-roll offering.

The strike in BC, the cyber attack impacting the distribution center in Ontario and rotating strikes in SQDC stores in August 2022 had an impact on the net revenue achieved in the third quarter of 2022 given that the orders were either halted for weeks or significantly slowed down in both BC and Ontario, but we are unable to quantify the impact of these events.

Throughout 2022, revenue growth continued across all our key markets (Alberta, BC, Ontario, and Quebec) which together make up 97% of our sales in the year December 31, 2022 (December 31, 2021: 94%).

Production costs

For the year ended December 31, 2022, production costs increased by $1.3 million (14%) compared to the prior year.

Under the Company’s accounting policy, production costs are expensed as incurred. Production costs consist of the direct and indirect costs incurred to grow cannabis plants to the point of harvest. They include labour related costs, cultivation materials and consumables, utilities, facility costs, certain overheads, and production related depreciation. This methodology means that unless product is produced and sold during the period, the production costs associated with inventory held at period end are expensed prior to revenue being derived.

The increase in production costs is related to an increase in plant density, plant handling techniques applied and increased overall yield of cannabis crops meaning additional labour is required during the cultivation cycle and at harvest. In addition, there has been a notable increase in the costs of fertilizer and other input materials due to inflation as well as the need to use additional inputs due to larger crop sizes and an increased number of plants on hand. The additional cultivation labour, plant density and plant handling techniques have directly related to increased quality and yield from the Delta Facility.

From September 2022, the Company has started to recognize savings with the completion of the BC Hydro project.

Inventory expensed to cost of sales

For the year ended December 31, 2022, inventory expensed to cost of sales increased by $2.5 million (26%) compared to the prior year.

After cannabis is harvested, the remaining costs incurred in drying, processing, and packaging are capitalized to inventory and expensed once the finished good is sold. The ratio of inventory expensed to cost of sales was 34% of net revenue for the year ended December 31, 2022 (December 31, 2021: 42%). This ratio is directly impacted by throughput from the facility meaning that overheads are spread over a larger number of units and given the increase in production this has positively impacted the ratio. In 2022, the Company has also benefitted from an improved brand and product mix with a larger share of our sales coming from our premium brands, Simply Bare™ Organic and 1964 Supply Co.™, and less of the brand, Homestead Cannabis Supply™, relative to 2021.

Given the high inflationary environment in which the Company is operating in 2022, Management continues to monitor these costs closely and identify cost savings initiatives.

Gross profit and loss from operations

For the year ended December 31, 2022, growing net revenue and production efficiencies combined for an increase to gross profit of $12.3 million compared to the prior year. Despite a significant increase in net revenues of 57%, operating expenses remained relatively stable with an increase of $1.5 million (10%) for the year ended December 31, 2022 as the Company began to see the results of operating leverage.

For the year ended December 31, 2022, the Company’s loss from operations has significantly decreased to $2.6 million from $13.3 million in the prior year.

Rubicon Organics achieved Adjusted EBITDA1 profitability of $1.9 million and positive operating cash flow of $2.0 million for the year ended December 31, 2022. The Company also achieved a Free Cash Flow3 of $2.2 million in the second half of 2022.

Reviewing 2022’s Key Priorities

Rubicon Organics defined a three-pillar strategy for 2022 focused on yield and quality, improving product mix to optimize margin, and investigating the international market.

Optimize Yield & Quality  In 2022, the Company completed facility upgrades, invested in process improvements, and continued to identify opportunities for cost and quality efficiencies. Two significant facility upgrades occurred with the installation of new dehumidification units and completion of the BC Hydro grid connection. From January until August we saw an increase in both quality and yield of cannabis produced, but in the autumn with certain facility maintenance and seasonal growing conditions we had a relative plateau in production. In 2022, the Company has now achieved repeated crops over our nameplate capacity of 11,000 kg’s and seen an increase in our average THC per crop, with certain strains as high as 29% THC. We believe that our quality step change was experienced by the consumers beginning in April 2022 leading to the improved rate of sale of our products and increased demand.

Premiumization — The second pillar was to implement our commercial strategies within the Canadian domestic market to maximize the gross profit for each unit produced from our Delta Facility. With our approach, the provincial distributors and our consumers have access to a greater range of product formats and strain varieties. During 2022, our strategy has proven successful as evidenced by Rubicon achieving 6.3%2 market share of the premium flower and pre-roll market. In 2022, there was noticeable increase in competition with the rise of the craft producers and we believe that this competition led to the super-premium brand Simply Bare™ Organic experiencing a relatively flat year on revenues, despite increase in units sold. In contrast 1964 Supply Co.™ had a tremendous positive groundswell in the market, in particular from summer 2022 and with the success of the Comatose strain.

We continue to expect the premium market to outpace the growth of the total market in Canada in line with the performance in established markets such as Colorado and California. While the premium market has grown, there have been many new entrants from the smaller craft and micro-cultivator licensed producers who have been successful in gaining share overall. Despite this increase in competition we believe that Rubicon is well positioned to take advantage of the rise of craft momentum as consumer preferences shift from a focus on THC to the importance of terpenes to their experience.

International — At the beginning of 2022 we set our third pillar to open the routes to market for our products internationally. However, there has been significant price compression in the international markets and Rubicon Organics currently has domestic demand in excess of the volume available from our Delta Facility, thus we are prioritizing the domestic sale of our cannabis to continue to develop our Canadian brands which should deliver more consistent profitability. While we believe that there will be opportunities in the international markets, we have decided to continue to focus on the Canadian market in the short-term and thus for the time being, the Company will not continue to pursue its EU-GMP certificate or maintain other certifications required solely for international export. Rubicon expects to continue to evaluate and investigate international markets for future opportunities.

Company Outlook

Rubicon Organics has set out four key priorities for 2023:

  1. Optimize Yield and Cultivation at the Delta Facility

Our priority is delivering super-premium quality cannabis flower products in the Canadian market. Producing at scale in a greenhouse environment is subject to seasonal impacts and commercializing new strains to meet the demand in market and our brand standards can present challenges. We remain focused on ongoing refinement and optimization in our cultivation systems. In 2022 the Company achieved several crops exceeding our nameplate 11,000 kg’s capacity, and we expect 2023 to be a year of steady and consistent quality production. Additional tables will be installed in the facility to improve air circulation and increase capacity in the second half of 2023, with standard maintenance scheduled during downtime.

  1. Maximize Canadian Premium Opportunity

Rubicon is focused on maximizing the gross margin we earn from each gram produced from our Delta Facility. Delivering both the right genetics and product formats to the customer at the right price to value ratio and maintaining good relationships with the provincial distributors and retail stores are critical to our success. In 2023 we are driving to grow the Simply Bare™ Organic brand and to premiumize opportunistically elements of the 1964 Supply Co™ brand, the impact of both would be positive on our gross profit.

As we have forecast demand beyond our available supply from the Delta Facility we have begun projects that we expect to incrementally grow our net revenue and gross profit. We intend to launch products that do not require the Delta Facility’s capacity that we anticipate will add incremental gross profit to our results in a cost effective and efficient manner, such as through contract grow relationships to Rubicon’s quality standards. We are also actively looking to build our revenue with the launch of new products under our existing brands which can be contracted to other licensed producers thus not utilizing our existing capacity. We intend to deliver this incremental gross profit without significant incremental overhead cost to our business, thus driving additional overall profitability.

  1. Drive Efficiency in Processes and Systems

As steady state has been established at the Delta Facility, we now are seeking to create efficiency in our systems away from manual processes or those where there is reliance on key individuals to increase the resilience and repeatability of our systems and reduce cost. As part of this process, Rubicon is evaluating new information systems and expects to begin implementing new systems beginning in the second half of 2023. This project will drive incremental cost in the short-term, but we believe will improve efficiency of the existing business and ready Rubicon for further growth.

  1. Create a Proud, Engaged Team Delivering Outstanding Results

With turmoil in the cannabis sector in the last number of years coupled with the stresses relating to work in the pandemic and tightness of the labour market, we have seen considerable turnover in the business. We believe that in order to deliver a premium product to market, our team members being engaged and proud is important to put our best foot forward with our consumers and customers. Furthermore, the cost and resources used when there is labour turnover can be considerable. As part of achieving an engaged and proud team, we have set clear goals and objectives linked to reward to recognize the hard work and accomplishments of team members. We also have begun reviewing our Company values listening to our people as part of the process and Rubicon’s evolution now that we are in a more steady state.

Rubicon believes that our cannabis quality, brand positionings and product offerings will drive continued growth in net revenue, resulting in an increase in gross profit and Adjusted EBITDA for the full year 2023. With a stable cost base, this anticipated growth in net revenue and gross profit would improve our operating leverage. Additionally, we expect to achieve positive cashflow for the full year, pending opportunistic investment decisions.

As a business we are now looking to increase the volume of product that we have available for sale to fill the demand we have for our quality products. The business is evaluating several options to increase our capacity. We believe that despite any market volatility, inflationary pressures, regulatory change, our product quality and brand portfolio has positioned Rubicon to win in the premium cannabis market.


Rubicon Organics Inc. is the global brand leader in premium organic cannabis products. The Company is vertically integrated through its wholly owned subsidiary Rubicon Holdings Corp, a licensed producer. Rubicon Organics is focused on achieving industry leading profitability through its premium cannabis flower, product innovation and brand portfolio management, including its flagship super-premium brand Simply Bare™ Organic, its premium brand 1964 Supply Co.™, its premium concentrate brand LAB THEORY™, its mainstream brand Homestead Cannabis Supply™ and its topical brand Wildflower™.

The Company ensures the quality of its supply chain by cultivating, processing, branding and selling organic certified, sustainably produced, super-premium cannabis products from its state-of-the-art glass roofed facility located in Delta, BC, Canada.