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by Stockwatch Business Reporter
The Canadian Securities Exchange Composite Index fell 5.98 points Thursday. Medical marijuana producer Liberty Health Sciences Inc. (LHS) rose 11 cents to 51 cents on 4.19 million shares after reporting its second quarter results for fiscal 2020 (for the quarter ending Aug. 31, 2019). Liberty Health has a 300,000-square-foot greenhouse in Florida and it has 19 dispensaries, all of which are located in Florida.
The company posted a profit of $22.8-million in its fiscal Q2, much inflated thanks to accounting. Liberty Health had just $10.6-million in net revenue, up nicely from its net revenue of $5.5-million in Q1, but it needs explanation.
There were two main reasons for the huge profit: (1) an accounting rule that counts newly produced but unsold inventory as sold, minus expenses; (2) a $14-million gain on the company's sales of Chestnut Hill Tree Farm. Still, Liberty managed to significantly improve its gross margins in the most recent quarter, and reduce its operating expenses meaningfully -- impressive, considering the company nearly doubled its revenue from the previous quarter.
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