Clever Leaves sees slight increase in revenue as losses are trimmed

Clever Leaves Holdings Inc. (NASDAQ: CLVR, CLVRW)  reported financial results for the fourth quarter and full year ending December 31, 2023.

Revenue in the fourth quarter of 2023 increased 5% to $4.6 million compared to $4.4 million for the same period in 2022. The company attributed the increase to an improvement in cannabinoid segment revenues, which increased 29% to $2 million compared to $1.6 million for the same period in 2022. The year-over-year growth in cannabinoid segment revenues was also largely due to continued sales strength in Brazil and Australia. Non-cannabinoid revenues were $2.6 million compared to $2.8 million for the same period in 2022.

Clevel Leaves also trimmed its net loss to $5.1 million versus a net loss of $28.8 million for the same period in 2022. The company did note that in that comparison, there was a net loss in the fourth quarter of 2022 of $21.2 million from discontinued operations related to the company’s wind-down process in Portugal.

Full-year results

For 2023, the revenue increased 6% to $17.4 million versus $16.4 million in 2022. The company said the cannabinoid revenue increased 39% to $6.6 million compared to $4.7 million, and non-cannabinoid revenue was $10.9 million compared to $11.7 million.

Clever Leaves also reported that its net loss fell to $17.9 million from 2022’s net loss of $66.2 million. The company noted that the net loss in 2023 includes a $3.7 million loss on investment related to the fourth-quarter sale of the company’s remaining Cansativa stake.

“Throughout 2023, we executed on our strategic initiatives to refine our commercial and production operations, as well as optimize our capital efficiency and cost structure,” said Andres Fajardo, CEO of Clever Leaves. “We continued to support demand for our cannabinoid products in Australia and Brazil, resulting in a 39% year-over-year increase in our cannabinoid revenue for the full year, and we maintained progress with new strain development.

“Reflecting our continued cost optimization efforts, we drove year-over-year general and administrative expense reductions of 26% for the fourth quarter and 24% for the full year. Our year-end cash balance also improved to $6.9 million compared to $6.5 million at the end of the third quarter, benefited by the October 2023 sale of our remaining stake in Cansativa. Subsequent to the end of the fourth quarter, we completed the $1.5 million sale of our Portuguese farm assets. As we progress into 2024, we remain focused on driving further capital preservation and operational efficiencies.”

Non-cannabis business sold

The company also said in the statement that on March 21, 2024, Clever Leaves sold its non-cannabinoid business segment Herbal Brands, Inc. to KAC Investments LLC. The sale transaction was completed on March 21, 2024, for a purchase price of $8.02 million, comprising $7.02 million in cash paid on the closing date and the issuance of a senior secured promissory note and security agreement in the original principal amount of $1 million.

Fajardo added, “Through completing this transaction, we aim to focus our operations solely on our cannabinoid business, as well as point our ongoing capital and cost optimization initiatives in this direction.”