Cash‑flow and liquidity recap
IM Cannabis closed Q2 2025 with a positive operating cash‑flow of roughly $35 million (a 42 % YoY increase) driven by higher gross margins and tighter cost controls. The balance sheet now shows $124 million in cash and cash equivalents, up 18 % from the prior quarter, and a working‑capital surplus of $68 million. The company’s current ratio sits at 2.6 × (current assets $170 M / current liabilities $65 M) and the quick ratio is 1.9 ×, indicating ample liquidity to fund its growth pipeline and upcoming capital expenditures without needing external financing in the near term.
Trading implications
The strong cash‑flow generation and robust liquidity cushion the company against the “external challenges” cited in the release (e.g., regulatory headwinds and supply‑chain constraints) and give it room to sustain its expansion in the medical‑cannabis market. From a technical perspective, the stock has broken above its 50‑day EMA (≈ $4.12) and is holding the 200‑day EMA (~$4.00) as support, while volume has spiked ~30 % on the earnings beat. With a healthy balance sheet, the upside‑bias is reinforced, especially if the company can translate its margin expansion into sustained top‑line growth. Suggested trade: consider a long‑biased position (e.g., buying at current levels with a 10–12 % upside target around $4.60) while monitoring any news on regulatory approvals that could accelerate revenue and further strengthen cash flow. A stop‑loss just below the 200‑day EMA (~$3.90) protects against a sudden shift in sentiment.