Vext Science Revenue Jumps 18%, but Profitability Tumbles in Q3 Results

By Nicolás Rodríguez, Managing Editor

Vext Science (CSE: VEXT; OTCQX: VEXTF) reported record third-quarter revenue of $14.9 million, up 18% year-over-year, while operating cash flow doubled sequentially to $2.4 million.

But beneath those headline figures, the cannabis operator’s profitability deteriorated sharply, illustrating why revenue growth alone can be a misleading indicator of financial health.

Adjusted EBITDA fell to $195,000, compared with $3.4 million in the previous quarter and $1.5 million a year earlier. Its adjusted EBITDA margin contracted to 1.3%, down from 28.3% in Q2.

Meanwhile, Vext recorded a $4.9 million net loss, compared with a $315,000 loss in the preceding quarter.

Revenue Growth Meets Margin Pressure

Ohio remained Vext’s strongest market, generating $10.9 million in revenue, a 37% annual increase.

However, gross profit totaled approximately $3.1 million, representing a gross margin of roughly 21%, significantly below the prior quarter.

Management attributed the deterioration to inventory liquidation, production disruptions, temporary dispensary closures, and additional third-party product purchases.

The company also plans to sell its Phoenix manufacturing facility as it restructures its Arizona operations.

What the Headline Numbers Don’t Tell Investors

Despite record revenue of $14.9 million, Vext’s adjusted EBITDA fell while its net loss widened to $4.9 million. Gross margin stood at approximately 21%.

Operating cash flow reached $2.4 million, partly supported by inventory liquidation. The company ended the quarter with $5.6 million in cash and negative working capital of approximately $12.1 million.

The results show stronger sales and cash generation, but continued pressure on profitability and liquidity. That disconnect echoes the findings of IgniteIt economics columnist Rolando García in his latest analysis, “The $60 Ounce Paradox,” which examines why higher volumes and lower costs do not necessarily translate into stronger margins.

The gap between revenue growth and profitability will be a central topic at IgniteIt’s Cannabis Capital & Policy Summit in Washington, D.C., on November 18, where industry executives, investors, and policymakers will examine the financial pressures facing cannabis operators, access to capital and the regulatory changes that could reshape the industry’s economics.