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HempFusion Reports Strong Q3 2021 Financial Results

15 November 2021

HempFusion Wellness Inc. (TSX:CBD.U) (OTCQB:CBDHF) (FWB:8OO) (“HempFusion” or the “Company”), a leading health and wellness company offering premium probiotic supplements and products containing CBD, today reported financial results for the third quarter ended September 30, 2021. All dollar amounts are stated in U.S. dollars. HempFusion will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss Q3-2021 financial results. Please see the Conference Call Details section of this news release for information about how to participate.

Third Quarter 2021 Financial Highlights

  • Q3-2021 net revenue of $3.1 million increased 155% over the $1.2 million reported in Q3-2020 and 154% versus Q2-2021.
  • Excluding the recently completed acquisitions, HempFusion revenue increased 31% versus Q3-2020 and 30% over the previous quarter as the Company continues to make strong progress on its retail distribution and ecommerce growth initiatives.
  • Direct-To-Consumer (DTC) eCommerce sales of $971,911 increased 190% from $334,322 in Q2-2021.
    • HempFusion stand-alone website-based sales increased 38.2% versus the same period last year.
    • Platform DTC sales including Amazon, Walmart and Tmall increased 145% versus the same period last year.
  • B2B net revenue increased 140% to $2.2 million in Q3-2021 from $898,620 in Q2-2021 and 95% compared to $1.1 million in Q3-2020.
  • Gross profit was $1.3 million or 43% of net revenue versus 33% in the prior year quarter, representing a 1,000 bps improvement reflective of more effective inventory management, improvements in managing production costs and higher margin sales contributions from the two most recent acquisitions.
  • Cash position at the end of the quarter was $5.4 million.

Third Quarter 2021 Business Highlights

  • HempFusion completed both of the previously announced acquisitions of Sagely Enterprises Inc. (“Sagely Naturals”) and APCNA Holdings LLC (“Apothecanna”). These acquisitions greatly expand the distribution footprint of the Company to over 15,000 locations, providing the opportunity to expand with ingestible products in the future. The complementary product lines also provide the combined entity with a broader coverage of demographics.
  • The Company launched its highly anticipated CBD Gummy line in early August 2021, utilizing HempFusion’s proprietary broad-spectrum hemp extract. The gummies feature natural functional ingredients and premium flavors, two popular consumer driven trends. According to Brightfield Group, the CBD gummy market is set to achieve $500 million in sales in 2021, up 44% from 2020, and is expected to reach $1.8 billion in 2026.
  • In June 2021, HempFusion launched its new EU compliant Probulin Probiotics products in Boots Pharmacies in Ireland, establishing a foundation for further opportunities and expansion in retailers across Ireland, the United Kingdom and Europe. Boots Ireland is part of the Retail Pharmacy International Division of one of the world’s largest purchasers of prescription drugs and many other health and well-being products, with one of the largest retail footprints in the world.
  • In early June 2021, HempFusion launched its sixth distribution channel, Private Label. The Company secured a 10 SKU private label deal with a leading national publicly traded grocery retailer. The initial order for approximately $250,000 was shipped in July 2021. The Company anticipates this particular account to generate in excess of $500,000 for 2021 and approximately $1 million or more in 2022.
  • HempFusion’s eCommerce business is growing. New customer acquisition increased online by 69.7% over Q1, 2021. Not only did online increase for both Probulin and HempFusion but traffic also increased by 46.1% over Q1, 2021. Probulin’s average conversion rate has remained very strong and consistent at 3.2%.
  • In May 2021, HempFusion announced an exclusive partnership with two-time Olympic Gold Medalist and five-time World Champion, Kaillie Humphries. HempFusion CBD and Probulin Probiotics will be Ms. Humphries’ exclusive sponsors in their respective categories through February’s Olympic Games in Beijing 2022 where she is the front-runner for gold for Team USA in both the Two-woman Bobsled and the newly introduced Women’s Monobob.
  • Closed oversubscribed, upsized US$2.94 million strategic private placement.

Events Subsequent to End of Third Quarter 2021

  • Launched ingestible and topical CBD products into another top 15 US supermarket chain in the Southeast United States. HempFusion’s OTC Pain Relief Cream will be added to approximately 400 stores and HempFusion’s Ingestible and Topical CBD products will now be available in 75 targeted stores.
  • Launched ingestible and topical CBD products into nearly 50 locations of a major Arizona grocer.
  • HempFusion’s wholly-owned subsidiary, Sagely Naturals, launched four SKUs of OTC topical pain relief products exclusively into a Top 10 US publicly listed Food, Drug & Mass (“FDM”) retailer in over 1,100 stores to start.
  • Received approval for five Probulin products by the UAE’s Ministry of Health and signed a distribution agreement with a key pharmacy chain in the Middle East that has over 1,200 locations.
  • The Company appointed Maria Leal as Chief Financial Officer.

“Our recent acquisitions, combined with continued product development within the Company, have positioned HempFusion to be a leading player in the health and wellness industry,” said Dr. Jason Mitchell, HempFusion’s Co-Founder and Chief Executive Officer. “Our strong brand portfolio is leading to continued retail wins, strong ecommerce growth and is driving significant growth in our total company revenue, as reflected by the 155% growth rate this past quarter. Coming out of the quarter we have seen continued strength, with October preliminary net sales of $1.4 million. We expect this momentum to continue as we move through the always important holiday sales period. We remain confident in our ability to meet or exceed our revenue guidance for 2022 of $20 to $25 million and expect our profitability and cash burn to improve significantly throughout 2022,” continued Dr. Mitchell.

Financial summary for the three months ended September 30, 2021

U.S. $ millions, except per share data Three months ended September 30,
















Gross profit 








Operating expenses 








Operating loss 


- 6.1




- 6.6


Other expenses (income) 


- 0.2






Net loss and comprehensive loss 


- 6.0




- 16.7


Loss per common share - basic and diluted 









September 30, 2021


December 31, 2021

Cash and cash equivalents 








Total assets 








Long-term liabilities 








Total liabilities 








Consolidated net revenue for the three months ended September 30, 2021 increased 155% year-over-year to $3.1 million.

DTC e-commerce net sales increased 692% year-over-year to $971,911 reflecting the addition of the recently completed acquisitions of Apothecanna and Sagely Naturals, increased marketing efforts, a targeted DTC team, and targeted digital promotions.

Consolidated B2B net revenue increased 95% to $2.2 million in Q3 2021 driven by the addition of Apothecanna and Sagely Naturals, along with HempFusion’s new line of CBD gummies and private label sales launched in September. HempFusion maintains a leadership position in retailers across the United States, including the #1 in sales by dollar volume and unit sales in one of the top five largest FDM channel retailers.

International sales decreased by 47% to $109,793 in Q3 2021 mainly as a result of COVID-related issues that were transitory in nature.

Gross profit of $1.3 million improved to 43% of revenue compared to $0.4 million or 32.6% of revenue in Q3-2020. The improvement in gross profit margins was primarily attributed to the addition of higher margin sales from acquisitions and increased DTC sales, along with improvements in inventory and supply chain management. These efforts continue to see improvements, and the Company anticipates gross profit margins will continue to improve as the revenue mix continues to shift towards DTC channels.

Operating expenses were $7.5 million, an increase of 14% year-over-year from $7.0 million. The increase in expenses was primarily attributed to acquisition related expenses, as well as marketing and digital expenses. Going forward, we expect certain one-time costs associated with integrating the acquisitions, such as severance and legal costs will not continue.

The Company used $4.8 million of cash in operations during the third quarter of 2021 compared to $7.0 million of cash used in operations during the third quarter of 2020. The Company's cash and working capital at September 30, 2021 were $5.4 million and $3.2 million, respectively, compared to $9.3 million and negative $3.9 million as of December 31, 2020. The Company continues to see improvements in its monthly cash flow and expects the monthly cash burn to continue to decrease through the remainder of 2021 and throughout 2022.

During the quarter, the Company paid $1.6 million to satisfy the remaining purchase consideration for Probulin and $2.4 million related to the acquisition of Sagely Naturals. Both are one-time cash outlays that will not continue moving forward.

Conference Call Details

HempFusion will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss Q3-2021 financial results.

To participate in the call, please dial 877-545-0320. For international callers, please dial 973-528-0016. Use Entry Code: 664194.

To join the webcast, please visit:

An archived audio webcast will be available for 90 days following the original broadcast.


One of a select few CBD companies who are today fully prepared to meet or exceed expected FDA guidance, HempFusion Wellness Inc. is a leading health and wellness company whose family of premium consumer brands include HempFusion™, Sagely Naturals™, Apothecanna™, and Probulin Probiotics™, one of the fastest-growing probiotics companies in the United States according to SPINs reported data.

Utilizing the power of whole-food hemp nutrition, the HempFusion family of brands’ product portfolio comprises 112 SKUs including USDA Organic Certified Tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, probiotic supplements and skin care products, a Doctor/Practitioner line, a White Label division and more. With a strong focus on research and development, HempFusion Wellness has 43 products under development.

Available from approximately 18,000 US retail locations across all 50 states, HempFusion Wellness products are also available in China, Mexico, Ireland, United Kingdom, United Arab Emirates, South Korea and Canada and may be purchased online from each brand’s website, The Probulin Store on, Alibaba’s, the world’s largest cross-border online marketplace, and a multitude of additional e-commerce sites.

For more information, visit Follow HempFusion on Twitter, Facebook and Instagram.


This news release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation (collectively, “forward-looking statements“) that relate to HempFusion’s current expectations and views of future events. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “will likely result”, “are expected to”, “expects”, “will continue”, “is anticipated”, “anticipates”, “believes”, “estimated”, “intends”, “plans”, “forecast”, “projection”, “strategy”, “objective” and “outlook”) are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In particular and without limitation, this news release contains forward-looking statements relating to the continued growth of the Company’s international business and revenue, continued improvement of the Company’s gross profit margin, the Company’s plans to accelerate sales, DTC sales expectations and continued shift of the revenue mix towards DTC channels, anticipated growth of the Company’s private label division, including private label orders from the noted leading national publicly traded grocery retailer, expansion opportunities for the Company’s ingestible products and the Company’s other plans, focus and objectives. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond HempFusion’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the impact and progression of the COVID-19 pandemic and other factors set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the annual information form of the Company dated March 31, 2021 and available under the Company’s profile on SEDAR at HempFusion undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for HempFusion to predict all of them or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

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