Mercanto Reports Q3 2025 Financial Results and Provides Operational Update
Financial Highlights for Q3 2025 (vs. Q3 2024):
The Company notes that while topline revenue declined compared to the same period last year, results reflect the impact of the recently completed rationalization process in Quebec and broader industry headwinds. While the rationalization is now concluded, its effects are expected to persist through Q4. Nonetheless, this positions the Company for medium- to long-term benefit as Quebec's cannabis market stabilizes and new categories such as vapes begin to roll out. Notably, Mercanto maintained an adequate working capital position and zero long-term debt.
"We are operating in one of the toughest markets, and while results reflect a contraction, we believe our business is resilient and structurally sound," said Eric Ronsse, CEO of Mercanto. "Q3 was a transition quarter as we took most of the impact of rationalization in Quebec, focused on margin-improving products, and on the development of other markets, notably with the launch of three flavours of Deckies THC pouches in New Brunswick. Our strategy remains clear: optimize the mix, minimize waste, and maintain a lean, focused operation. We are building a durable business, not chasing inflated growth."
Vape Category Entry & Battery Listing
Following the second quarter-end, Mercanto announced it had secured one of only two authorized battery listings for Quebec's new vape category, a strategic win that may help offset short-term softness in financial results and contribute to the Company's post-rationalization recovery, set to launch in Fall 2025. The Company's approved device, the M3B+ from global manufacturer CCELL, will be distributed in all 104 cannabis stores across Quebec.
The Quebec cannabis authority has projected that vape products will represent 11% of total provincial cannabis sales within the first year of launch, with approximately 50% of that volume being incremental to the market. In FY2024, Quebec cannabis sales totaled $620 million, indicating a projected vape market of $68 million. Mercanto's battery will be one of only two available to power 25 vape cartridge SKUs.
"With the upcoming launch of vapes in Quebec, we are uniquely positioned to benefit from a tightly controlled product rollout where shelf space is limited and quality matters," said Ronsse. "We expect our hardware distribution to be financially positive"
The Company has participated in the vape cartridge submission process, with results expected to be announced in the coming weeks.
Outlook
The Company acknowledges that the cannabis sector remains volatile and more unstable than ever; however, Mercanto's business model has proven resilient, and its future prospects appear increasingly strong. Mercanto's lean structure, cash-focused operations, and diversification into growth segments position it well for long-term value creation. The Company anticipates gradual sales growth as the Quebec rationalization process has now concluded, with its effects expected to last through Q4, positioning the Company to benefit from a more streamlined market environment in the medium to long term.
Forward-Looking Information Disclaimer:
This press release contains forward-looking information within the meaning of applicable Canadian securities legislation. Forward-looking information typically contains statements with words such as "anticipate," "believe," "expect," "plan," "intend," "estimate," "may," "will," "should," "potential," "proposed," or similar expressions. Forward-looking statements in this document include, but are not limited to, statements regarding Mercanto Holdings Inc.'s future business plans, operations, growth potential, market conditions, product launches, and financial outlook. These statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking information. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
SOURCE Mercanto Holdings Inc.
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