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Irwin Natural’s Push Into Psychedelic Clinics Has Hurt The Company

Irwin Naturals has defaulted on its debt.
The post Irwin Natural’s Push Into Psychedelic Clinics Has Hurt The Company appeared first on Green Market…



After the markets closed on Thursday, Irwin Naturals Inc. (CSE: IWIN) (OTC: IWINF)  reported falling sales and a debt default for the year ending December 31, 2022. Irwin reported that its fourth-quarter total sales were $23 million, which increased sequentially from the third-quarter revenue of $22 million but fell from last year’s fourth-quarter revenue of $25 million. The company also reported a net loss for the quarter of $3.6 million, which was worse than last year’s fourth-quarter net income of $4.8 million.

CEO Klee Irwin said, “In Q4, we continued to invest in our Emergence clinics and cannabis business lines. Our investment in Emergence now includes eight acquisitions, consisting of 13 clinics, and one advertising platform. We are currently moving forward with phase two of our plan to become the world’s largest chain of dedicated psychedelic mental health clinics through organic growth and development and are currently reviewing options for the first Emergence branded clinic in the United States. Additionally, we anticipate seeing considerable growth coming from our Cannabis business line with the first revenues from our licensing deals to occur in Q2 2023, which now sees us in seven states and in Canada.”

Full Year

In 2022, Irwin delivered annual revenue of $89.5 million, down 10.8% from $100.3 million in 2021. The decrease is primarily attributed to an overall decrease in business volume from 2021. Income from operations decreased $8.7 million from $10.6 million in 2021 to $1.8 million in 2022. The company noted that the drop in revenue was attributed to an overall decrease in business volume from 2021 paired with startup costs related to the company’s 2022 acquisitions at Irwin Naturals Emergence (the company acquired twelve mental health clinics in 2022) and Irwin Naturals Cannabis (intellectual property licensing to the cannabis industry).

Irwin delivered a net loss for 2022 of $2.5 million versus a net income of $10 million in 2021. In 2022, the company had a basic and diluted loss per controlling interest share of ($2.79). By comparison in 2021, the company had basic and diluted earnings per share of $7.18 and $0.03, respectively. In 2022, Irwin Naturals got roughly 98% of its revenue from vitamins and other health supplements and 2% from mental health clinics.

Default Notice

More troubling was what wasn’t said in the company earnings press release. On May 11, 2023, Irwin received a notice of default from its lender resulting from a failure to meet certain covenants. As a result of the news and the company’s anticipated operating cash outflows, Irwin told investors that it believes that substantial doubt exists regarding its ability to continue as a going concern. The lender is currently forbearing its rights related to its notice of default and its rights to accelerate payments or implement the applicable penalty rate, and the company said it is continuing to cooperate with the lender. The financial statement said, “If such demand for repayment were to occur, the company does not have the financial resources to repay such obligations.” Neither of the company’s executives mentioned anything about the debt problems.

Irwin said in its annual report that it was depending on its credit facility to fund operations and meet its obligations. It said it is renegotiating payments with customers and suppliers.

Sean Sand, CFO, stated, “During the fourth quarter of 2022, we made further progress in meeting our expansion efforts into the high-growth cannabis and psychedelics sectors. We have made the necessary investments in our operations to support sustained long-term growth by entering into several new licensing agreements to distribute Irwin Naturals branded cannabis products and expanded our mental health clinics footprint in Florida through an acquisition.”

Total liabilities increased to $48.5 million in 2022 up from $24 million at the end of 2021. The company also had an increase of $10.4 million due to the line of credit related to the 2022 acquisitions.

Cash Problems

While the company has more cash at the end of 2022, the company noted that it had spent more money on acquisitions. Cash used in operating activities was $6.4 million for 2022. Cash provided by operating activities was $11.0 million for 2021. The company said the decrease in operating cash flows is due to a decline in operating revenue related to the reduction in consumer spending on their health and wellness and the company’s 2022 acquisitions.


Irwin went on a buying binge in 2022 picking up Midwest Ketafusion, KHC Capital Group, New England Ketamine, Invictus Clinic, Hobie Fuerstmann, and Care Clinic. In 2023, the company acquired Serenity Health and Keta Media. Irwin though had several busted deals. The company agreed but then decided against buying Happier You, Ketamine Infusions of Idaho, Dura Medical, Tri-Cities Infusion and Wellness Clinic, and Braxia Scientific.

The post Irwin Natural’s Push Into Psychedelic Clinics Has Hurt The Company appeared first on Green Market Report.

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