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ALCANNA.PE Alcanna Inc. Alcanna Reports First Quarter 7.9 % Growth in Same Store Liquor Sales and 7.5 % Gain in Gross Margin Dollars From the Liquor Division [ FOR IMMEDIATE RELEASE ] EDMONTON , Alberta , May 17 , 2021 ( GLOBE NEWSWIRE ) -- Alcanna Inc. ( the “ Company ” or “ Alcanna " ) ( TSX : CLIQ ) today reported its financial results for the three months ended March 31 , 2021 . First Quarter Financial Results and Business Update In Q1 2021 , Alcanna's liquor division continued the strong performance achieved in 2020. Same - store liquor sales from continuing operations rose by 7.9 % and gross margin dollars from the liquor division from continuing operations increased 7.5 % to $ 27.7 million from $ 25.8 million . • The Company believes these increases are primarily a result of : ( i ) the change in pricing strategy that was implemented in 2019 and 2020 , and has continued into 2021 , which was designed to regain lost market share and grow the customer base ; and ( ii ) shifting customer consumption habits due to more people dining and entertaining at home and continuing to stay away from on - premise liquor establishments ( restaurants , bars , lounges , sports venues , etc. ) . The Company believes these new behaviour patterns have become entrenched in people's lifestyle choices and will continue to some extent even after the COVID - 19 pandemic subsides . • The favourable result to last year is accentuated considering the significant increase in customer demand that was observed in the last three weeks of March 2020 as customers began stockpiling product at the start of the COVID - 19 pandemic . • Despite the fact that the Company has exited thirty - one ( 31 ) stores in Alberta during the past fifteen ( 15 ) months as a strategy to sell or close lower - revenue / under - performing convenience - format liquor stores in Alberta , total liquor sales from continuing operations in the first quarter still rose to $ 123.8 million from $ 122.6 million in 2020 . Since the March 22 , 2021 transaction which spun out Alcanna's cannabis business into a separate publicly traded company Nova Cannabis Inc. ( " Nova " ) ( TSXV : NOVC ) - the Company's participation in cannabis retail is now indirect through its approximately 63 % ownership of Nova . • Nova's strategy is to continue to be one of Canada's largest and fastest growing cannabis retailers by delivering compelling value to cannabis consumers and encouraging greater migration from the illicit market . Nova's main banner , Value Buds , offers discount prices on a wide range of cannabis products from value to premium . • Nova currently has fifty - three ( 53 ) cannabis retail locations in Alberta , Saskatchewan and Ontario , with a further thirty ( 30 ) locations under development / construction ( Ontario : nineteen ( 19 ) ; Alberta : eleven ( 11 ) ) , the majority of which are expected to be ready to open in the second half of 2021 , subject to receiving government licences . • To date in 2021 , eighteen ( 18 ) locations have been converted from Nova Cannabis to Value Buds . In recent weeks , these Value Buds locations have seen , on average , transaction count and sales increases of in excess of 120 % compared to the period before conversion . These increases were realized at a gross margin as a percentage of sales of approximately 19 % compared to approximately 32 % in the period before conversion . As Nova continues to increase the number of Value Buds locations and introduce this banner to more customers , it anticipates that gross margin as a percentage of sales will blend out to be approximately 12 % to 15 % in the second half of 2021 and Nova anticipates that the sales increases already realized to date will continue and possibly accelerate . • For accounting purposes , the transaction completed between Alcanna and YSS Corp. constituted a reverse takeover of YSS Corp. by Alcanna , and therefore Alcanna has continued to consolidate the financial results of Nova , including the financial results from the former YSS Corp. operations from March 22 , 2021 to March 31 , 2021 . • Total cannabis store sales for Q1 2021 rose 17.2 % to $ 18.4 million from $ 15.7 million in the prior year . Total gross margin dollars decreased 8.0 % to $ 4.8 million from $ 5.2 million and gross margin as a percent of sales was 26.0 % for the period ( Q1 2020 – 33.1 % ) . The decrease in gross margin is primarily attributable to the strategic lowering of gross margin stores in support of Nova's growth strategy discussed earlier . The Company's total operating profit before depreciation , remeasurements and provisions for Q1 2021 decreased 17.7 % to $ 3.2 million from $ 3.9 million in the prior year , and the net loss from continuing operations for Q1 2021 rose to $ 9.5 million , compared to $ 8.4 million in the prior year . Both declines were primarily attributable to the expenses related to the transaction to spin off the Company's cannabis business in Q1 2021 .