VANCOUVER, BC, Nov. 11, 2025 /CNW/ - C21 Investments Inc. (CSE:CXXI) (OTCQX:CXXIF) ("C21" or the "Company"), a vertically integrated cannabis company, today announced the filing of its interim financial statements and management discussion and analysis for its second quarter ending September 30, 2025, on SEDAR. The Company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). All currency is reported in U.S. dollars.
Second Quarter Highlights (July 1, 2025 to September 30, 2025):
Revenue of $8.5 million - up 13% year-over-year - driven by a 15% increase in same store sales, slightly offset by lower wholesale sales; State of Nevada sales were down 16% from the comparable period last year1
Record number of retail transactions in the quarter with transaction volumes up 19% from last year
Gross Margin of 50.4% - up 690 basis points year-over-year, fueled by a higher business mix of retail over wholesale, on slightly lower Cost of Goods Sold (COGS)
Income from Operations of $1.2 million - up 300% from Q2 last year, driven by a $1.1 million increase in same store sales on relatively flat SG&A costs
Net Income Before Tax of $0.6 million inclusive of the one-time $0.4 million charge from the previously announced EFF settlement (see news release dated September 4, 2025)
Earnings (Loss) Per Share of ($0.00) - up from ($0.01) last year, primarily impacted by Income Tax provisions
Adjusted EBITDA2 of $2.2 million - up 71% from Q2 last year and +107% sequentially
Free Cash Flow2, before working capital changes and taxes, of $1.9 million, up 88% year-over-year and +105% sequentially; Income Tax paid in Q2 of $0.5 million and $1.3 million year-to-date
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1 State of Nevada cannabis sales: https://www.headset.io/markets/nevada
2 Refer to "Non-GAAP Measures" disclosure at the end of this news release for a description and calculation of these measures
Q2 Management and Operational Commentary:
CEO and President, Sonny Newman: "Our 15% growth in same store sales over Q2 last year, versus a 16% decline in state of Nevada sales, is a testament to the strength of our business model and ability to deliver outsized results in what remains a challenging market. We continue to expand our strong and loyal customer base as evidenced by the record number of retail transactions we reported this quarter. C21 shifted its revenue mix in Q2 to reduce wholesale exposure given credit quality challenges in the market. Bottom line, we delivered a substantial improvement in adjusted EBITDA and positive free cash flow, both sequentially and year-over-year. Given our strong performance and growth trajectory, we are confident in our ability to capture ongoing opportunities in the market and continue to deliver for our shareholders."
Q2 revenue of $8.5 million was up 13% over the previous year, despite a 16% decline in Nevada sales over the comparative period1. Retail sales were up 15% year-over-year and 2% sequentially, which was offset by a decision to lower wholesale sales in the quarter.
Gross Margin of 50.4% in the second quarter was up 690 basis points year-over-year, driven by $1.1 million higher same store sales on slightly lower Costs of Goods Sold.
C21 reported Income from Operations of $1.2 million in the second quarter, up 300% from the previous Q2 and 400% sequentially, primarily due to higher retail sales and improved gross margin. SG&A costs were relatively flat year-over-year despite the $1.1 million increase in retail sales.
The Company reported a Net Loss of $0.5 million in the second quarter, or ($0.00) per share, versus a Net Loss per share of ($0.01) in the previous second quarter. Q2's Net Loss was primarily due to Income Tax provisions. The Company generated $0.6 million Net Income Before Tax for Q2, inclusive of a one-time charge of $0.4 million related to the EFF settlement previously announced.
Q2 Adjusted EBITDA2 was $2.2 million, up 71% from the previous year and 97% sequentially, driven by the increase in revenue, improved gross margins, and stable SG&A costs.
Q2 Free Cash Flow2 before working capital changes was $1.9 million, up 105% sequentially and up 88% from the previous Q2.
Cash at the end of Q2 was up slightly from Q1 notwithstanding $0.5 million in Income Tax paid, a $0.5 million one-time payment related to the EFF settlement, and $0.5 million debenture principal ($0.4 million in cash) retired, as well as a $0.6 million reduction in payables. Year-to-date, Income Tax paid was $1.3 million.
Based on legal interpretations and opinions that challenge its tax liability under Section 280E Internal Revenue Code of 1986, the Company has taken the position that it does not owe taxes attributable to the application of this Section of the Code. The Company refiled amended U.S. federal income tax returns for the years ended January 31, 2022, January 31, 2023, January 31, 2024, and the two months ended March 31, 2024. Management exercises significant judgment when assessing the probability of successfully sustaining the Company's tax filing positions, and in determining whether a contingent tax liability should be recorded and, if so, estimating the amount. See disclosure of Risk Factors in the MD&A.
Non-GAAP Measures:
C21 reports its financial results in accordance with GAAP and uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with GAAP. The Company refers to certain non-GAAP financial measures such as "Free Cash Flow", "Adjusted EBITDA" and "same store sales". These measures do not have any standardized meanings prescribed by GAAP and may not be comparable to similar measures presented by other issuers. The Company considers these measures to be an important indicator of the financial strength and performance of its business. The Company believes the adjusted results presented provide relevant and useful information for investors because they clarify the Company's actual operating performance, make it easier to compare the Company's results with those of other companies and allow investors to review performance in the same way as the management of the Company. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, the Company's reported results as indicators of the Company's performance, and they may not be comparable to similarly named measures from other companies. The tables below provide reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.
"Free Cash Flow" is defined as Cash Provided by Operating Activities from Continuing Operations adding back income tax expense and before changes in working capital, minus capital expenditures. Management believes that Free Cash Flow, which measures our ability to generate cash from our continuing business operations, is an important financial measure for use in evaluating the Company's financial performance. Free Cash Flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.
Q2 Free Cash Flow:
Q2
Q1
Q4
Q3
Q2
Quarter Ended (except as noted)
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
Cash Provided by Operating Activities before taxes and changes in working capital (continuing operations)
$ 1,864,309
$ 942,348
$ 1,582,088
$ 1,726,751
$ ...
