Cann Group Cuts Costs 35% but EBITDA Loss Persists Ahead of Debt Restructuring
Cann Group Limited reported a 34% rise in dried flower production and doubled Botanitech brand flower sales in FY25, while cutting operating expenses by 35%. The company is targeting an EBITDA-positive FY26 amid ongoing debt restructuring.
- 34% increase in dried flower production to 5.9 tonnes
- 100% growth in Botanitech brand flower sales to $4.4 million
- 35% reduction in operating expenses to $18.3 million
- 44% improvement in normalized EBITDA loss to $5.1 million
- Ongoing debt restructuring with $9.69 million raised in FY25
Strong Production and Revenue Growth
Cann Group Limited (ASX, CAN) unveiled its FY25 results showing a significant operational turnaround. The company boosted dried flower production by 34% to 5.9 tonnes, hitting new monthly output records in the latter half of the year. This production surge underpins the company’s strategy to scale efficiently and meet growing market demand.
Revenue growth was led by the company’s own-brand Botanitech dried flower range, which doubled sales to $4.4 million. This growth reflects expanding market share and strengthened distribution partnerships, including a key agreement with Chemist Warehouse franchises signed mid-year. Meanwhile, the re-launched B2B bulk flower sales contributed 50% of total revenue in the final quarter, signaling promising momentum heading into FY26.
Cost Discipline and Operational Efficiency
Operating expenses fell sharply by 35% to $18.3 million, driven by a 46% reduction in direct production costs and a 31% cut in employee and administration expenses. These savings reflect a focused cost management program and investments in automation, such as a new Rotary Filler packing line, which improved packaging efficiency and regulatory compliance.
The company’s normalized EBITDA loss narrowed by 44% to $5.1 million, a marked improvement attributed mainly to reduced operating costs. Operating cash outflows also improved by 36% to $9.6 million, enhancing Cann’s financial resilience as it prepares for a competitive medicinal cannabis market.
Innovation and Sustainability Initiatives
Cann continued to advance its research and development efforts, introducing seven new cannabis strains and leveraging tissue culture techniques to ensure plant health and consistent quality. The company also launched a CO₂ capture recirculation boiler initiative aimed at reducing greenhouse gas emissions and operational costs, underscoring its commitment to sustainability.
Collaboration with La Trobe University and the transition of R&D activities to the Mildura facility further strengthen Cann’s innovation pipeline. The integration of spectral imaging and AI for early disease detection and yield prediction highlights the company’s focus on leveraging technology to optimize cultivation.
Financial Position and Outlook
In FY25, Cann raised $9.69 million through a mix of capital raisings and term funding to support its operations and growth initiatives. The company is actively restructuring its debt, with an update expected by the end of September 2025. CEO Jenni Pilcher emphasized the company’s focus on delivering an EBITDA-positive FY26 by maximizing revenue from Botanitech and B2B sales while maintaining operational efficiency.
Overall, Cann Group’s FY25 results reflect a company in transition; scaling production, improving cost structures, and innovating its product and operational capabilities to position itself competitively in the evolving medicinal cannabis market.
Bottom Line?
Cann’s FY25 progress sets the stage for a pivotal FY26 as it aims to turn EBITDA positive and complete its debt restructuring.
Questions in the middle?
- Will Botanitech’s rapid sales growth sustain amid increasing market competition?
- How will the ongoing debt restructuring impact Cann’s financial flexibility and investor confidence?
- Can operational automation and R&D innovations translate into sustained margin improvements?
