Indiva Limited (TSXV:NDVA) (OTCQX:NDVAF) is pleased to announce that it has secured distribution rights to ship its premium cannabis products to New Brunswick and Manitoba. These two new agreements extend Indiva’s distribution network to eight provinces. Indiva’s first shipments to Manitoba include INDIVA™ pre-rolls and THC capsules, and Bhang® Chocolate. Indiva expects that INDIVA™ and Bhang® products will be available in Manitoba stores within the next two weeks. New Brunswick recently received Bhang® Chocolate, which is now available for purchase at www.cannabis-nb.com.
“We are proud to continue to grow our distribution network across Canada,” Niel Marotta, Indiva’s President and Chief Executive Officer, said. “As of today, we are nearly a nationwide producer and distributor of cannabis and cannabis-infused products. We are delighted to bring our top-selling products to New Brunswick and Manitoba. We are proud to add to both provinces’ growing collections and bring our beloved Bhang® and INDIVA™ brands to more Canadians.”
Indiva sets the standard for quality and innovation in cannabis. As a Canadian licensed producer, Indiva creates premium pre-rolls, flower, capsules, and edible products and provides production and manufacturing services to peer entities. In Canada, Indiva produces and distributes the award-winning Bhang® Chocolate, Wana Sour Gummies, Ruby® Cannabis Sugar, Sapphire™ Cannabis Salt and other Powered by INDIVA™ products through license agreements, partnerships and joint ventures. Click here to connect with Indiva onLinkedIn, Instagram, Twitter and Facebook, and here to find more information on the Company and its products.
MEDIA CONTACT Kate Abernathy, Vice President of Marketing and Communications Phone: 613-296-5764 Email: email@example.com
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DISCLAIMER AND READER ADVISORY
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the contents of this press release and neither of the foregoing entities accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the Company’s future operations, future product offerings and compliance with applicable regulations. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the parties. The material factors and assumptions include the parties being able to maintain the necessary regulatory and other third parties’ approvals and licensing and other risks associated with regulated entities in the cannabis industry. The forward-looking information contained in this release is made as of the date hereof and the parties are not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.
Earnings season is heating up for the cannabis industry and the market is closely analyzing the numbers that are being reported by Canadian industry leaders.
Almost every company (cannabis and non-cannabis) has been negatively impacted by COVID-19. The virus has brought the global economy to a screeching halt and we are monitoring how we are able to respond to the crisis.
Although the cannabis sector has been under pressure so far this year, the recent trend has been slightly to the upside and we believe that there are several pockets of opportunity. The Canadian cannabis retail market is one of the verticals that we have been bullish on. When COVID-19 started to spread, the Canadian government declared cannabis to be an essential industry. The classification allowed many dispensaries to remain open and we are favorable on this development.
Depending on the location of the dispensary, businesses have been forced to abide by new regulations. In Ontario, consumers cannot enter a dispensary and must rely on curbside/pickup type of service. In Alberta, the regulations are not as strict and dispensaries are allowed to remain open. Many companies have limited the number of customers that are allowed to be inside at one-time and we are favorable on the proactive approach to help slow the spread of the virus.
Last week, we spoke with Choom Holdings (CHOO.CN) (CHOOF) CEO Chris Bogart and left the conversation with a much higher conviction level in the business. The Canadian cannabis retailer has been highly focused on the province of Alberta and we are favorable on the leverage that it has to this market. Choom also has retail operations in Ontario, and we will monitor how these locations have been impacted by the virus.
A Company with Catalysts for Growth
Choom is a business that has substantial catalysts for growth, and we are favorable on the planned expansion in British Columbia. The company will open a dispensary in a strategic location in Vancouver and we find this to be an important aspect of the story. The Choom dispensary will be located in Olympic Village and will be the only cannabis retail store to be located in the area.
In the back half of 2020, many economists and politicians expect the market to return to sense of normalcy. In a post-COVID world, we would not be surprised to see consumers do a majority of their shopping in the areas that are near their home. This trend could prove to be a catalyst for Choom as we expect to see a good portion of customers remain loyal to businesses that are located near them.
In a market like Alberta, which has not been as impacted by COVID-19 and is considerably smaller than Ontario and British Columbia (Vancouver), we do not expect to see a significant shift in how consumers spend. Alberta has remained a strong market for Choom and this is a trend that we expect to continue on a going forward basis.
During the last year, Choom has been nothing short of an execution story and has been expanding into new markets across Canada. From Niagara Falls to Vancouver, the Canadian cannabis retailer is focused on strategic markets and we find this to be an attractive aspect of the story.
When it comes to opening a dispensary, location is of the utmost importance and Choom is led by a management team that understands the importance of this. We believe the company is led by a management team that has its finger on the pulse of the Canadian cannabis retail market and are favorable on the long-term growth prospects that is associated with the operation.
An Under-appreciated Growth Story
At current levels, we believe that Choom has a compelling valuation and a favorable risk-reward profile. Although the company has been executing on previously announced initiatives, the recent trend has been to the downside and we believe that the market does not fully understand the opportunity.
One of the reasons we believe that Choom Holdings has been under pressure is due the relationship with Aurora Cannabis (ACB.TO) (ACB). The relationship was previously considered to be the most important aspect of the story, however, Aurora’s downfall has significantly devalued the relationship.
We believe that Choom Holdings has been overly impacted by the COVID-19 and is an opportunity that our readers need to be aware of. Over the long-term, we are favorable on the Canadian cannabis retail market and believe that Choom is positioned to survive the current market environment. The company is led by a management team that has been able to navigate the choppy waters of the Canadian cannabis market and we find this to be a key aspect of the story.
If you are interested in learning more about the Canadian cannabis retailer, please send an email to email@example.com to be added to our distribution list.
Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.
Neptune Wellness Solutions Inc. (“Neptune” or the “Company”) (NASDAQ: NEPT) (TSX: NEPT), a diversified and fully integrated health and wellness company, is pleased to announce today that it has entered into an extraction partnership for hemp processing resulting in revenues to the Company of a minimum of $16.5 million over the next six months.
Under the terms of the agreement, Neptune will process 44,000 kg of crude and distillate extracts from hemp biomass in four installments over six months.
“We are pleased to enter into this game changing hemp processing partnership which further strengthens our B2B extraction business and allows Neptune to deliver high quality, low-cost hemp extracts to our customers,” said David Mayers, Chief Operating Officer of Neptune. “With this partnership we are in an even stronger position to serve and provide value to our Canadian LP customers, while generating high margin revenue opportunities through the processing of hemp or cannabis extracts for a variety of product forms.”
“This is an exciting point in time for Neptune’s history with accelerated growth across our health and wellness product portfolio, including cannabis and hemp derived products,” added Michael Cammarata, Chief Executive Officer of Neptune Wellness Solutions. “With our Phase II extractor at Sherbrooke operational, we are now highly competitive on product offerings and pricing to Canadian LPs, giving our customers the edge to win at retail in Cannabis 2.0.”
About Neptune Wellness Solutions Inc. Neptune Wellness Solutions is a diversified and fully integrated health and wellness company. Through its flagship consumer-facing brands, Forest Remedies™ and Ocean Remedies™, Neptune is redefining health and wellness by building a broad portfolio of natural, plant-based, sustainable and purpose-driven lifestyle brands and consumer packaged goods products in key health and wellness markets, including hemp, nutraceuticals, personal care and home care. Leveraging decades of expertise in extraction and specialty ingredient formulation, Neptune is a leading provider of turnkey product development and supply chain solutions to businesses and government customers across several health and wellness verticals, including legal cannabis and hemp, nutraceuticals and white label consumer packaged goods. The Company utilizes a highly flexible and low cost supply chain infrastructure that can be scaled up and down or into adjacent product categories to quickly adapt to market demand. Neptune’s corporate headquarters is located in Laval, Quebec, with a 50,000-square-foot production facility located in Sherbrooke, Quebec and a 24,000 square-foot facility located in North Carolina. For additional information, please visit: https://neptunecorp.com/
MediPharm Labs Corp., (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) a global leader in specialized, research-driven pharmaceutical-quality cannabis extraction, distillation and derivative products, is pleased to announce that its subsidiary, MediPharm Labs Australia Pty. Ltd. (“MediPharm Labs Australia”) has secured its first European white-label cannabis supply agreement with Therismos Limited (“Therismos”), a subsidiary of Cannaray Limited (“Cannaray”).
Under the three-year agreement, MediPharm Labs Australia will supply a range of cannabis oil products that meet the high-quality standards set by the German Institute for Drugs and Medical Devices that requires all medicinal cannabis products be manufactured under Good Manufacturing Practices (“GMP”).
Cannaray, a leading UK-based medical cannabis and CBD lifestyle product company, recently acquired Therismos, a specialist pharmaceutical company with licences to import, handle, and distribute controlled drugs in various European countries.
“We are pleased to be working with a supply partner that can meet our strict requirements for laboratory controls, quality, reliability, traceability and scale. MediPharm Labs mirrors the qualities we seek in a medical supply partner,” said Scott Maguire, Chief Executive Officer, Cannaray. “We note in particular that both of MediPharm Labs’ production facilities have achieved GMP certification, thus guaranteeing high-quality pharmaceutical products. Cannaray’s goal is to provide patients with high-quality, naturally derived medical products and become a European leading importer and distributor of such products. The MediPharm Labs relationship is one significant step forward in achieving this goal.”
MediPharm Labs Australia is licensed by the Australian Therapeutic Goods Administration (the “TGA”) meeting internationally recognized GMP requirements. Since the TGA has entered into a mutual recognition agreement with the European Union, MediPharm Labs Australia’s GMP certification has positioned it well to serve the needs of Cannaray as it expands its presence in Europe.
“Cannaray is the gold standard in its growing part of the European market and to be chosen as their white-label partner is a coup for MediPharm Labs Australia,” said Pat McCutcheon, CEO of MediPharm Labs. “With the growing recognition of CBD’s therapeutic benefits, Cannaray is in the right place at the right time with an outstanding product portfolio and a highly engaged team of professionals. We look forward to participating in their growth.”
Also under the agreement, Therismos will purchase – within the United Kingdom and Ireland – certain formulations and dosage forms. The products will be supplied under branding designated by Therismos. The agreement is conditional on confirmation from the German Institute for Drugs and Medical Devices that the products meet specified quality and regulatory requirements.
The European Market: Growing a New Marketplace
Europe is widely recognized as one of the world’s most difficult medical cannabis markets to enter because of its strict and varied regulatory framework and rigorous quality requirements often requiring GMP products. As medical cannabis markets continue to liberalize, Europe is also one of the world’s most promising markets. European public acceptance of the benefits of medical cannabis legalization is gradually spreading, according to the Fifth Edition of Prohibition Partners’ European Cannabis Report from February 2020. Prohibition Partners also estimated in that same report that the total European legal market, which includes medical cannabis and recreational cannabis, could be valued at almost US$2.5 billion by 2024 up from an estimated US$0.3 billion today.
MediPharm Labs Australia: GMP certified, ready to serve global markets
In May 2020, MediPharm Labs was granted its GMP Certification and Licence to Manufacture Therapeutic Goods, allowing storage of cannabis resin as an Active Pharmaceutical Ingredient (“API”) and to engage in labelling, storage and release for supply as a Medicine Manufacturer of Oral Liquids within its specialized facility, which was designed to replicate the high-quality standards of the Company’s Canadian production facility. It features multi-phase supercritical CO2 extraction equipment, clean rooms and testing laboratories.
MediPharm Labs Australia completed and celebrated its official facility opening in December 2019 when it also received State Licences for cannabis substances from the Department of Health and Human Services in Victoria, Australia. Under these State Licences, MediPharm Labs Australia is allowed to manufacture, store and supply cannabis products and medicines and, for research purposes, test cannabis at its facility. MediPharm Labs Australia also has its Cannabis Manufacturing Licence from the Australian Office of Drug Control (ODC) under the Narcotic Drugs Act 1967. MediPharm Labs Australia holds ODC Import and Export Licences, allowing the import and export of cannabis resin and extracts, bulk medicinal cannabis oil and finished medicinal cannabis products.
About Cannaray Cannaray is a leading European cannabis company stratifying medical cannabis and a CBD lifestyle brand. Using its full portfolio, Cannaray is committed to making a positive impact on global health and prides itself on creating products backed by research, science and the latest-generation technology. Cannaray’s assets include European import and distribution licences for medical cannabis, an alliance with Newey Limited, the largest potted plant grower in the UK, as well as a full range of CBD products. Cannaray has a Scientific Advisory Board composed of Key Opinion Leaders from the UK and Ireland covering pain, palliative care, haematology and neurology. These Key Opinion Leaders guide the Company’s medical strategy around research, novel delivery forms and advance product development.
About MediPharm Labs Founded in 2015, MediPharm Labs specializes in the production of purified, pharmaceutical quality cannabis oil and concentrates and advanced derivative products utilizing a Good Manufacturing Practices certified facility with ISO standard-built clean rooms. MediPharm Labs has invested in an expert, research-driven team, state-of-the-art technology, downstream purification methodologies and purpose-built facilities with five primary extraction lines for delivery of pure, trusted and precision-dosed cannabis products for its customers. Through its wholesale and white label platforms, they formulate, consumer-test, process, package and distribute cannabis extracts and advanced cannabinoid-based products to domestic and international markets. As a global leader, MediPharm Labs has completed commercial exports to Australia and is nearing commercialization of its Australian Extraction facility. MediPharm Labs Australia was established in 2017.
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, the successful performance of the agreement and shipping of products thereunder as planned; the projected expansion of the cannabis market and growing consumer demand; performance of the agreements as intended and disclosed herein; and Cannaray’s position in the European cannabis market and MediPharm Labs’ participation in their growth. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the inability of MediPharm Labs to obtain adequate financing; the delay or failure to receive regulatory approvals; and other factors discussed in MediPharm Labs’ filings, available on the SEDAR website at www.sedar.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, MediPharm Labs assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
All information contained in this press release with respect to Cannaray and Therismos was supplied by Cannaray for inclusion herein.
Green Thumb Industries Inc. (“Green Thumb,” or the “Company”) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of Rise™ and Essence retail stores, today reported its financial results for the first quarter ended March 31, 2020. Financial results are reported in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and all currency is in U.S. dollars.
“Our business model continues to prove out and we delivered outstanding first quarter results,” said Green Thumb Founder and Chief Executive Officer Ben Kovler. “We achieved a major milestone by breaking $100 million in quarterly revenue along with substantial EBITDA growth. These factors helped contribute to our positive free cash flow from operations. We believe that our operational strength and resilience, supported by a strong balance sheet, continue to differentiate and position us for long-term success, especially during these challenging times.”
Revenue: Total revenue for the first quarter 2020 increased 267.6% year-over-year and 35.4% quarter-over-quarter to $102.6 million. Quarterly revenue was driven by organic growth across the Company’s consumer packaged goods and retail businesses.
Gross Margin: Gross margin for the first quarter 2020 was 51.6% as compared to 45.8% for the first quarter 2019.
Net Income (Loss) Attributable to Green Thumb: Net loss attributable to the Company for the first quarter 2020 was $4.2 million or ($0.02) per basic and diluted share, as compared to a net loss of $14.1 million or ($0.07) per basic and diluted share for the fourth quarter 2019.
Adjusted Operating EBITDA: Adjusted Operating EBITDA(1), which is a non-GAAP financial measure as described below and in an accompanying financial table in this release, was $25.5 million for the first quarter 2020, representing an 85% increase from the prior quarter and a 13-fold increase from the first quarter 2019.
Balance Sheet: As of March 31, 2020, current assets totaled $140.8 million and included cash and cash equivalents of $71.5 million. Total debt outstanding was $92.9 million, $0.2 million of which is due within 12 months.
Capital Markets & Financing: In January and March 2020, respectively, Green Thumb completed sale and leaseback transactions with Innovative Industrial Properties (“IIP”) of its Toledo, Ohio processing facility and Oglesby, Illinois cultivation and processing facility. In total, these transactions provide the Company with $57.2 million of non-dilutive capital.
(1) EBITDA and Adjusted Operating EBITDA are non-GAAP financial measures. Please see the “Supplemental Information (Unaudited) Regarding Non-GAAP Financial Measures” at the end of this press release for a reconciliation of non-GAAP to GAAP measures.
Additional Management Commentary
“Green Thumb continues to execute as we launched adult use sales in Illinois at the start of the year with great success. The positive feedback we have received from communities and regulators, coupled with strong consumer demand, even in the face of COVID-19, validates the essential reality of the cannabis industry,” said Ben Kovler, Founder and Chief Executive Officer. “As COVID-19 persists, our top priorities continue to be the safety of our team, customers, and supply chain, while providing uninterrupted access to products that our customers use for their well-being. Our Leadership Response Team has implemented operational measures following CDC guidelines to support the safety of our teams and customers. We also accelerated the buildout of our omnichannel infrastructure to better serve our customers, including e-commerce, customer service, delivery and curbside pickup.”
Kovler added, “I want to thank the entire Green Thumb team for their steadfast commitment to serving our customers, effectively pivoting as regulations evolve while operating at the highest standards every day. I am especially proud of our retail team members, who are working on the front lines to provide exceptional service to our customers. They are the true heroes.”
Consumer Packaged Goods Business Development
As of March 31, 2020, Green Thumb’s family of consumer brands are produced, distributed, and available in retail locations in nine states: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada and Pennsylvania, supporting the execution of the Company’s plan to distribute brands at scale.
Branded product sales grew sequentially by approximately 21% gross (13% net) quarter-over-quarter, driven primarily by expanded product distribution. As of March 31, 2020, Green Thumb’s branded products are sold in over 700 retail stores, including the Company’s Rise™ and Essence retail stores.
The Company’s capacity expansion projects continue to progress according to plan in Illinois, New Jersey, Ohio, and Pennsylvania. Green Thumb’s New Jersey and Ohio facilities are on track to contribute revenue from the production and distribution of Green Thumb’s branded product portfolio in the third quarter 2020.
The Company launched sales of the Rythm brand’s line of flower products in Maryland and resumed sales of the brand’s vape products in Massachusetts following the lifting of the state’s ban on vape sales in the prior quarter.
In Maryland, Green Thumb launched Soft Lozenges under The Feel Collection brand and the Big Dog line extension under the Dogwalkers brand, known for its full-flower mini pre-rolls.
In Florida, the Company launched a capsule product extension as part of the Dr. Solomon’s brand.
Green Thumb’s first quarter revenue included sales from 42 retail stores across ten states: Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, and Pennsylvania.
Comparable sales growth (stores opened at least 12 months) exceeded 75% on a base of 14 stores, driven primarily by increased transactions. Sequential quarter-over-quarter comparable sales were up approximately 24% off a base of 33 stores.
Retail revenue increased sequentially by 45% quarter-over-quarter, primarily driven by new store openings and growth generated from increased transaction activity in the Company’s retail stores, particularly in Illinois since the commencement of adult use sales on January 1, 2020, and in Pennsylvania.
During the quarter, Green Thumb opened three new stores:
Illinois: Opened Rise™ Joliet and Quincy, the state’s first ‘adult-use only’ stores, bringing total open stores in the state to seven.
Pennsylvania: Opened Rise™ Cranberry, bringing total open stores in the state to ten.
Subsequent to quarter end, Green Thumb opened two new stores:
Ohio: Opened Rise™ Lakewood (Detroit), bringing total open stores in the state to five.
Nevada: Opened Essence South Rainbow in Las Vegas, bringing total open Essence stores in the Las Vegas area to four.
The Company currently has 44 open stores nationwide and is licensed to open a total of 96 retail stores.
During and subsequent to the quarter, Green Thumb accelerated the buildout of its omnichannel infrastructure, including e-commerce, customer service, delivery, and curbside pickup, to better serve patients and customers during the pandemic.
First Quarter 2020 Financial Overview
Total revenue for the first quarter 2020 was $102.6 million, up 267.6% from $27.9 million for the first quarter 2019 and up 35.4% from $75.8 million for the fourth quarter 2019. Revenue growth was driven by the expanded distribution of Green Thumb’s branded products, new store openings, and increased traffic to the Company’s 42 open and operating retail stores.
In the first quarter 2020, Green Thumb generated revenue from all 12 of its markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, and Pennsylvania. The Company continued to invest in the buildout of its cultivation and manufacturing capabilities in Illinois, New Jersey, Ohio, and Pennsylvania.
Gross profit for the first quarter 2020 was $53.0 million or 51.6% of revenue, as compared to $12.8 million or 45.8% of revenue for the first quarter 2019.
Total selling, general and administrative (“SG&A”) expenses for the first quarter were $45.4 million or 44.3% of revenue, an improvement from $46.7 million or 61.6% of revenue for the fourth quarter 2019. Improved operating costs as a percentage of revenue was driven primarily by increased operating leverage achieved through scale.
Total other income was $1.8 million for the first quarter and included cash interest expense and other expenses.
EBITDA for the first quarter 2020 was $20.3 million as compared to $7.8 million for the fourth quarter 2019 and a loss of $10.4 million for the first quarter 2019. Adjusted Operating EBITDA for the first quarter 2020 was $25.5 million as compared to $13.8 million for the fourth quarter 2019 and a loss of $2.1 million for the first quarter 2019. The significant improvement in EBITDA and Adjusted Operating EBITDA over the trailing twelve months was driven primarily by revenue growth from both the consumer packaged goods and retail business segments.
Net loss attributable to Green Thumb for the first quarter was $4.2 million or ($0.02) per basic and diluted share, as compared to a net loss of $14.1 million or ($0.07) per basic and diluted share for the fourth quarter 2019.
Balance Sheet and Liquidity
As of March 31, 2020, current assets were $140.8 million, including cash and cash equivalents of $71.5 million. The Company had $92.9 million of total debt.
Total basic and diluted weighted average shares outstanding as of March 31, 2020 were 208,468,356.
Capital Markets & Financing
Green Thumb completed two sale and leaseback transactions with IIP for the following facilities: (1) January 31, 2020 – Toledo, Ohio processing facility for total investment value of $7.2 million; and (2) March 6, 2020 – Oglesby, Illinois cultivation and processing facility for total investment value of $50.0 million. Proceeds from the transactions will be used to support strategic expansion initiatives.
Transition from IFRS to U.S. GAAP Reporting
In February 2020, Green Thumb’s registration with the U.S. Securities and Exchange Commission (“SEC”) as a domestic issuer became effective. As a result, Green Thumb now reports its financial statements in conformity with U.S. GAAP. Additional information relating to the Company’s first quarter 2020 results is available on the Investor Relations section of Green Thumb’s website at https://investors.gtigrows.com, the SEC’s website at www.sec.gov and Canada’s System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.
Non-GAAP Financial Information
This press release includes certain non-GAAP financial measures as defined by the SEC. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.
EBITDA: Earnings before interest, taxes, other income or expense and depreciation and amortization.
Adjusted Operating EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs.
Conference Call and Webcast
Green Thumb will host a conference call on Thursday, May 14, 2020 at 5:00 pm ET to discuss its financial results for the first quarter ended March 31, 2020. The conference call may be accessed by dialing 833-502-0470 (Toll-Free) or 236-714-2182 (International) with conference ID: 2597929. A live audio webcast of the call will also be available on the Investor Relations section of Green Thumb’s website at https://investors.gtigrows.com and will be archived for replay.
About Green Thumb Industries:
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which they serve. Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection. The company also owns and operates rapidly growing national retail cannabis stores called Rise™ and Essence. Headquartered in Chicago, Illinois, Green Thumb has 13 manufacturing facilities, licenses for 96 retail locations and operations across 12 U.S. markets. Established in 2014, Green Thumb employs over 1,700 people and serves thousands of patients and customers each year. The Company was named a Best Workplace 2018 by Crain’s Chicago Business and MG Retailer magazine in 2018 and 2019. More information is available at GTIgrows.com.
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which may constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward-looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect,” or similar expressions and include information regarding the future direction and business objectives of the Company. The forward‐looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances and expectations relating to general economic and market conditions. Any forward‐looking information speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward‐looking information, whether as a result of new information, future events or otherwise. The forward‐looking information in this news release is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those express or implied. When considering these forward‐looking statements, readers should keep in mind the risk factors and other cautionary statements in the Company’s public filings with the applicable securities regulatory authorities on the SEC’s website at www.sec.gov and on SEDAR at www.sedar.com, including the risk factors set out in the 2nd Amendment to the Company’s Registration Statement on Form 10/A and its forthcoming Annual Report on Form 10-K for the year ended December 31, 2019. These risk factors include, without limitation: marijuana remains illegal under federal law, and enforcement of cannabis laws could change;the Company may face limitations on ownership of cannabis licenses; the Company may become subject to FDA or ATF regulation; the Company may face difficulties acquiring additional financing; the Company operates in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where the Company carries on business; the Company may face difficulties in enforcing its contracts; the Company is subject to taxation in Canada and the United States; cannabis businesses are subject to unfavorable tax treatment; cannabis businesses may be subject to civil asset forfeiture; the Company is subject to proceeds of crime statutes; the Company faces security risks; the Company’s use of joint ventures may expose us to risks associated with jointly owned investments; competition for the acquisition and leasing of properties suitable for the cultivation, production and sale of medical and adult use cannabis may impede the Company’s ability to make acquisitions or increase the cost of these acquisitions, which could adversely affect the Company’s operating results and financial condition; the Company faces risks related to its products; the Company is dependent on the popularity of consumer acceptance of the Company’s brand portfolio; the Company faces risks related to its insurance coverage and uninsurable risks; the Company is dependent on key inputs, suppliers and skilled labor; the Company must attract and maintain key personnel or the Company’s business will fail; the Company’s business is subject to the risks inherent in agricultural operations; the Company’s sales are difficult to forecast; the Company’s products may be subject to product recalls; the Company may face unfavorable publicity or consumer perception; the Company faces intense competition; the Company is subject to general economic risks; the Company may be negatively impacted by challenging global economic condition; the Company is subject to risks arising from epidemic diseases, such as the recent outbreak of the COVID-19 illness; the Company’s voting control is concentrated; the Company’s capital structure and voting control may cause unpredictability; and additional issuances of Super Voting Shares, Multiple Voting Shares or Subordinate Voting Shares may result in dilution.
In March 2020, the World Health Organization categorized coronavirus disease 2019 (“COVID-19”) as a pandemic. COVID-19 continues to spread throughout the U.S. and other countries across the world, and the duration and severity of its effects are currently unknown. The Company is implementing and evaluating actions to strengthen its financial position and support the continuity of its business and operations.
The Company’s unaudited interim condensed consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and reported amounts of revenue and expenses during the periods presented. Such estimates and assumptions affect, among other things, the Company’s goodwill, long-lived asset and intangible assets; operating lease right of use assets and operating lease liabilities; assessment of the annual effective tax rate; valuation of deferred income taxes; the allowance for doubtful accounts; assessment of the Company’s lease and non-lease contract expenses; and measurement of compensation cost for bonus and other compensation plans. The Company’s assessment of conditions and events, considered in the aggregate, indicate it will be able to meet its obligations as they become due within one year after the date of these financial statements. There continues to be a high level of uncertainty in estimating the expected economic and operational impacts relative to COVID-19 as it is an evolving situation. The estimates and assumptions used in the first quarter 2020 financial statements may change in future periods as the expected impacts from COVID-19 are revised, resulting in further potential impacts to the Company’s financial statements.
The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.
Source: Green Thumb Industries
Green Thumb Industries Inc.
Highlights from Unaudited Interim Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2020 and December 31, 2019
(Amounts Expressed in United States Dollars, Except for Share Amounts)
Three Months Ended
March 31, 2020
December 31, 2019
Revenues, net of discounts
Cost of Goods Sold, net
Selling, General, and Administrative
Income (Loss) From Operations
Other Income (Expense):
Other Income (Expense), net
Interest Expense, net
Total Other Income (Expense)
Income (Loss) Before Provision for Income Taxes And Non-Controlling Interest
Provision For Income Taxes
Net Loss Before Non-Controlling Interest
Net Income (Loss) Attributable To Non-Controlling Interest
Net Loss Attributable To Green Thumb Industries Inc.
Net Loss per share – basic and diluted
Weighted average number of shares outstanding – basic and diluted
Green Thumb Industries Inc.
Highlights from Unaudited Interim Condensed Consolidated Balance Sheets
(Amounts Expressed in United States Dollars)
Cash and Cash Equivalents
Other Current Assets
Property and Equipment, Net
Right of Use Assets, Net
Intangible Assets, Net
Other Long-term Assets
Total Current Liabilities
Notes Payable, Net of Current Portion
Other long-Term Liabilities
Total Liabilities and Equity
Green Thumb Industries Inc.
Supplemental Information (Unaudited) Regarding Non-GAAP Financial Measures
EBITDA, and Adjusted Operating EBITDA are non-GAAP measures and do not have standardized definitions under GAAP. We define each term as follows:
(1) EBITDA is defined as earnings before interest, taxes, other income or expense and depreciation and amortization.
(2) Adjusted Operating EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs.
The following information provides reconciliations of the supplemental non-GAAP financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.
Adjusted Operating EBITDA
(Amounts Expressed in United States Dollars)
Three Months Ended
March 31, 2020
December 31, 2019
Net (Loss) Income Before Noncontrolling Interest (GAAP)
Interest Expense, net
Other (Income) Expense, net
Depreciation and Amortization
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) (non-GAAP measure)
Share-based Compensation, Non-Cash
Acquisition, Transaction, and Other Non-Operating Costs
Aurora Cannabis Inc. (the “Company” or “Aurora“) (NYSE | TSX: ACB), the Canadian company defining the future of cannabis worldwide, announced today its financial and operational results for the third quarter of fiscal 2020 ended March 31, 2020.
Michael Singer, Executive Chairman and Interim CEO of Aurora stated, “I am incredibly proud of the Aurora team for working through these challenging times in order to maintain uninterrupted operations at all of our production facilities and ensure we continue to meet the needs of our patients and consumers. I am also pleased that our third quarter 2020 financial results were in-line with our expectations, and that we remain firmly on track with the cost-savings and capex goals we detailed during our business transformation plan in February 2020.”
Since announcing the Business Transformation Plan on February 6, 2020, Aurora has taken a number of concrete steps which place Aurora firmly on track to meet or exceed previously announced targets. These steps are designed to strengthen Aurora’s balance sheet and reduce go-forward costs, as the Company works to achieve profitability and positive cash flow. Management considers the following metrics to be key to the success of the operational reset and future profitability of Aurora:
Net Revenue Growth; Maintains Market Share Leadership Position
Net revenue, excluding provisions, of $78.4 million in Q3 2020 was up 18% quarter over quarter. Cannabis net revenue, excluding provisions, was $72.6 million, up 15% over Q2 2020.
Consumer cannabis net revenue, excluding provisions, was up 24% from the prior quarter to $41.5 million, demonstrating the impact of the launch of Daily Special, Aurora’s value brand, and a full quarter of Cannabis 2.0 products. Medical cannabis net revenue, both Canadian and international, showed healthy growth of 13.5% overall.
The variables associated with the COVID-19 pandemic and the still-developing Canadian consumer market, including consumer buying behaviour and new store rollout, have led Aurora to focus on market share for the near term, rather than revenue targets, to manage the business. Aurora has established leading market share in key consumer categories in Canada, leads the Canadian medical market in revenue, and has significant market share in Germany. As such, the Company’s goal is to gain market share where it can and remain well positioned to capture more share of the revenue growth of the various cannabis markets over time.
Gross Margin Strength; Adjusted Gross Margin, before Fair Value Adjustments, on Cannabis Net Revenue at 54%1
Gross margin, before fair value adjustments, on cannabis net revenue was 44% in Q3 2020, unchanged compared to 44% in the prior quarter.
Adjusted gross margin, before fair value adjustments, on cannabis net revenue was 54% in Q3 2020, versus the 55% in the prior quarter. Management believes adjusted gross margin is a better gauge of the health of the Company, demonstrating the strength of Aurora’s purpose-built business model and an important metric to manage as Aurora works to achieve positive adjusted EBITDA in a market that is experiencing price compression.
Target: Greater than 50% (On track)
The Company looks to maintain this metric at better than 50% over the long term. The majority of the operating costs in the Company’s purpose-built facilities ramp in a step-function manner. Current facilities have the capacity to support additional revenue without adding significantly to the cost of production. Ongoing cost efficiency initiatives also contribute to the Company’s margins, even as price competition increases.
Selling, General and Administrative (SG&A) Expense Reduction; Current Run-Rate of $55 million and Tracking to $40 million to $45 million
SG&A costs in Q3 2020 of $75.1 million, excluding one-time termination costs associated with the business transformation plan, were down $24.7 million from the prior quarter. For clarity, Aurora plans to include Research and Development (R&D) expenses within the SG&A reset plan target noted below.
Target: $40 million to $45 million (On track)
Reductions in SG&A began mid-quarter of Q3 and included cancellation of a number of information technology projects, professional fees, renegotiation of several key contracts related to marketing and R&D, reduction in certain marketing programs, elimination of headcount across the SG&A functions, and the divestiture of several non-core subsidiaries that had low gross margins and carried heavy SG&A burden.
These financial performance measures are not recognized or defined under IFRS. As a result, this data may not be comparable to data presented by other licensed producers of cannabis and cannabis companies. See “Non-GAAP Performance Measures” section below.
Adjusted EBITDA Profitability; Tracking to Q1 2021 Stated Goal
Q3 SG&A was $75.1 million, and at this point, the current run rate is now approximately $55 million. Management has set, and confirms, its intention to reduce costs in the Company to an SG&A, including R&D, run rate of approximately $40 – $45 million exiting Q4 2020.
Adjusted EBITDA, excluding one-time termination costs associated with the business transformation plan, was a loss of $45.9 million in Q3, an improvement of $34.4 million from the prior quarter adjusted EBITDA of $80.3 million.
Target: Positive EBITDA for Q1 2021 (On track)
The Company has committed to being adjusted EBITDA positive in fiscal Q1 2021, the July to September 2020 quarter. The Company intends to meet this goal through cost reductions and efficiencies in COGS and SG&A, if necessary. As stated above, the Company acknowledges it is not feasible to predict near term revenues with an adequate degree of precision, but believes it has numerous cost levers at its disposal to meet the positive adjusted EBITDA goal.
Capital Expenditure Reductions; Tracking Below $25 million in Q4 2020
Capital Expenditures, which includes additions to intangible assets and excludes the impact of capitalized borrowing costs and share based compensation, were approximately $73.7 million in Q3 2020. This represents a significant decline from the previous quarter as management reviewed all capital spending with the parameters of generating near term returns, a focus on core businesses, and the preservation of financial resources. A number of projects wrapped up in Q3 or were cancelled. Continuing capital projects include: (i) the planned amalgamation of the Company’s subsidiaries servicing medical patients and centralized distribution for the amalgamated entity, (ii) co-generation capabilities at Aurora’s River facility, reducing risk at one of the Company’s major facilities and reducing energy costs, with a $10.0 million offsetting grant expected over the next 12 months, (iii) completion of the joint venture arrangement to co-locate treatment of cannabis products within the Company’s Polaris facility, thereby reducing treatment costs and release timelines for cannabis products, (iv) the completion of the first six rooms at Aurora Sun to produce high demand cultivars, and (v) continued development of the German production facility. All projects, except for the German production facility, are expected to be largely complete in Q4 2020.
Target: Less than $100 million second half of fiscal 2020 (On Track)
Management committed to reducing capital expenditures to below $100 million in the second half of fiscal 2020, and with $73.7 million in Q3 2020, is on track to meet this objective. Capital spending in Q1 2021 is planned to be well below Q3 and Q4 2020 levels.
Fiscal Q3 2020 Sources & Uses of Cash; Q3 2020 Cash Use Decreased 43% over Q2 2020
Cash use in Q3 2020 decreased by over $118 million from the prior quarter, and given the Company’s adjusted gross margins before fair value adjustments on cannabis net revenue and reductions in SG&A expense and capital expenditures as described above, management expects cash use in Q4 2020 to further decrease. The main components of cash use in Q3 2020 were as follows:
Q1 2021 Expectations
Cash used in operations / EBITDA
Working capital change
Neutral or cash generating. Inventory build expected to slow and reverse to steady state over next 2-3 quarters
Less than $10 million per quarter for currently planned projects
Debt and interest payments
Steady for next several years / Convertible debt payments only at six month points (Q3, 2020, Q1 2021, etc)
Proceeds raised through debt
Proceeds raised through ATM
Access to capital in an uncertain environment is paramount but cost control and focus on positive EBITDA is primary levers. ATM to be available as backstop.
Cash, March 31, 2020
Refer to “Condensed Consolidated Interim Statement of Cash Flows” in the “Condensed Consolidated Interim Financial Statements (unaudited)” for our cash flow statement prepared in accordance with IAS 7 – Statement of Cash Flows.
Other Third Quarter 2020 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q3 2020 and Q2 2020 results and are in Canadian dollars)
Q3 2020 total net revenue of $78.4 million, excluding provisions of $2.9 million, a 18% increase from the prior quarter. Cannabis net revenue of $72.6 million in Q3 2020, excluding provisions, increased 15% compared to the previous quarter:
Consumer cannabis net revenue, excluding provisions of $2.9 million, of $41.5 million was an increase of 24%over the previous quarter. The growth is primarily attributable to the launch of Daily Special in February 2020 and an increase in Cannabis 2.0 sales, which commenced near the end of December 2019
Medical cannabis net revenue was $31.1 million, with Canadian medical net revenue up from $25.6 million to $27.0 million due to sales growth in cannabis derivative products, and international medical net revenue up from $1.8 million to $4.0 million due to the resumption of sales operations in the European Union in February 2020 after a temporary halt of distribution related to an administrative permit issue in Germany
Production volume in fiscal Q3 was 36,207 kilograms, a return to targeted production rates following a scheduled Q2 2020 pivot of production towards the cultivation of certain strains to align production capacity with evolving consumer preferences
Aurora has moved to reduce complexity in its business operations through strategic divestitures, asset disposals and subsidiary closures, with further simplification expected
Since the Business Transformation Plan announcement in February 2020, the Company has: (i) sold its non-core greenhouse facility in Exeter, ON; (ii) sold non-core investment holdings in marketable securities; and (iii) reached agreement for the divestiture of several non-core subsidiaries
Events Subsequent to Quarter End
Aurora renewed its ATM program to enable the Company to raise an additional US$250 million pursuant to its outstanding base shelf prospectus dated May 14, 2019, under which approximately US$350 million is available, in order to provide further balance sheet strength and preserve flexibility
Aurora completed its previously announced plan to consolidate all of its outstanding common shares (the “Common Shares“) on the basis of 1 Common Share for every 12 Common Shares currently outstanding
Facilities in Canada and internationally continue to be fully operational and the Company is working closely with local, national and international authorities to ensure it is following or exceeding the stated guidelines related to COVID-19 within each region
Q3 2020 Key Financial and Operational Metrics
Total net revenue (1)
Canadian medical cannabis net revenue (2)
International medical cannabis net revenue (2)
Consumer cannabis net revenue (2)
Wholesale bulk cannabis net revenue (2)
Provision for returns
Cannabis net revenue
Adjusted gross margin before FV adjustments on cannabis net revenue (2)
Selling, general and administration expense (3)
Adjusted EBITDA (2) (4)
Non-cash working capital
Cannabis inventory and biological assets (5)
Cash cost to produce per gram sold (2)
Kilograms sold (6)
Includes the impact of actual and expected product returns and price adjustments (three and nine months ended March 31, 2020 – $2.9 million and $13.5 million; three and nine months ended March 31, 2019 – nil).
These financial performance measures are not recognized or defined under IFRS. As a result, this data may not be comparable to data presented by other licensed producers of cannabis and cannabis companies. See “Non-GAAP Performance Measures” below.
Includes $5.0 million of one-time severance costs associated with the business transformation plan. Excluding these severance costs, SG&A would have decreased by 25% to $75.1 million.
Includes $5.0 million of one-time severance costs associated with the business transformation plan. Excluding these severance costs, adjusted EBITDA would have decreased by 43% to $45.9 million.
Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables.
The kilograms sold is offset by the grams returned during Q3 2020.
Aurora will host a conference call today, May 14, 2020, to discuss these results. Michael Singer, Executive Chairman and Interim Chief Executive Officer, and Glen Ibbott, Chief Financial Officer, will host the call starting at 5:00 p.m. Eastern time. A question and answer session will follow management’s presentation.
(844) 512-2921 or (412) 317-6671 Available until 11:59 p.m. Eastern Time Thursday, May 28, 2020
Aurora is a global leader in the cannabis industry serving both the medical and consumer markets. Headquartered in Edmonton, Alberta, Aurora is a pioneer in global cannabis dedicated to helping people improve their lives. The Company’s brand portfolio includes Aurora, Aurora Drift, San Rafael ’71, Daily Special, AltaVie, MedReleaf, CanniMed, Whistler, and ROAR Sports. Providing customers with innovative, high-quality cannabis and hemp products, Aurora’s brands continue to break through as industry leaders in the medical, performance, wellness and recreational markets wherever they are launched. For more information, please visit our website at www.auroramj.com.
Aurora’s Common Shares trade on the TSX and NYSE under the symbol “ACB”, and is a constituent of the S&P/TSX Composite Index.
Forward Looking Statements
This news release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (“forward-looking statements“). Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These forward-looking statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions, estimates and assumptions of management in light of management’s experience and perception of historical trends, current conditions and expected developments at the date the statements are made, such as current and future market conditions, the current and future regulatory environment and future approvals and permits. Forward-looking statements are subject to a variety of risks, uncertainties and other factors that management believes to be relevant and reasonable in the circumstances could cause actual events, results, level of activity, performance, prospects, opportunities or achievements to differ materially from those projected in the forward-looking statements, including general business and economic conditions, changes in laws and regulations, product demand, changes in prices of required commodities, competition, the effects of and responses to the COVID-19 pandemic and other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual information form dated September 10, 2019 (the “AIF“) and prospectus supplement dated April 16, 2020 (the “Prospectus Supplement“) to its outstanding base shelf prospectus dated May 14, 2019 and filed with Canadian securities regulators available on the Company’s issuer profile on SEDAR at www.sedar.com. The Company cautions that the list of risks, uncertainties and other factors described in the AIF and Prospectus Supplement is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such information. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities laws.
Non-GAAP Performance Measures
The Company uses financial measures regarding itself, such as cash cost of sales of dried cannabis sold, cash cost to produce per gram of dried cannabis sold, cannabis net revenue, medical cannabis net revenue, consumer cannabis net revenue, wholesale bulk cannabis net revenue, average selling price per gram and gram equivalent, gross profit and gross margin before fair value adjustments, gross profit and gross margin before fair value adjustments on medical cannabis net revenue, gross profit and gross margin before fair value adjustments on consumer cannabis net revenue, gross profit and gross margin before fair value adjustments on wholesale bulk cannabis net revenue, adjusted gross profit and adjusted gross margin before fair value adjustments, and adjusted EBITDA that do not have standardized meaning under the International Financial Reporting Standards (“IFRS“) and may not be comparable to similar measures presented by other entities (“non-IFRS measures“). Further information relating to non-IFRS measures, is set out in the Company’s management discussion and analysis for the three and nine months ended March 31, 2020 and 2019 under the heading “Cautionary Statement Regarding Non-GAAP Performance Measures” and the “Adjusted EBITDA, “Revenue”, “Gross Margin” and “Cash Cost of Sales of Dried Cannabis and Cash Cost to Produce Dried Cannabis Sold – Aurora Produced Cannabis” section for reconciliation to the IFRS equivalent.
Although COVID-19 has negatively impacted the global economy, there seem to be several pockets of opportunity. One of the is the cannabis industry and we are impressed with how the industry has held up during the pandemic.
When to virus started to spread and states started to impose stay at home orders, the cannabis industry was declared as an essential and this represented a positive development for the sector. During the last two months, several US cannabis retailers have recorded impressive revenue growth and we believe that our readers need to be aware of this trend.
We believe that the cannabis industry is reaching an inflection point as new states come on-line and as medical market transition to recreational markets. States like Illinois and Michigan represent attractive growth opportunities after the legalization of recreational cannabis. We have been focused on identifying markets that will legalize recreational cannabis in the near future and continue to favor companies that have leverage to these types of markets. Today, we want to highlight 3 companies that are positioned to benefit from this trend and believe that these are opportunities to be aware of.
Jushi Holdings: Owns an Undervalued Portfolio of Assets
Jushi Holdings Inc. (JUSH.CN) (JUSHF) is a US cannabis company that we are excited about and are favorable on the markets that the business is levered to. Jushi is targeting markets that are issuing a limited number of licenses and this is significant when it comes to the long-term growth prospects of the business.
The US cannabis company is focused on markets like Pennsylvania, Virginia, and Illinois. These markets represent burgeoning growth opportunities and we are favorable on the direction that the management team is bringing the business. The team has utilized a cost-effective structure to increase market share and has identified a number of acquisition targets. Through a series of organic and inorganic growth initiatives, the company has been able to advance the story and we expect to see additional acquisitions reported in the back half of 2020.
One of the reasons we are excited about the US cannabis retailer is due to the amount of insider buying that has been taking place. When the management team and the largest investors are purchasing additional stock in the company, it leads us to believe that the opportunity is undervalued, and we find this to be an important aspect of the story.
Pure Harvest: Capitalizing on Two Recreational Markets
Pure Harvest Cannabis Group (PHCG) is levered to two of the most exciting cannabis markets in the US and is an opportunity to be aware of. The last few months have been transformative for the business, and we are favorable on how the story has evolved so far this year.
The cannabis markets that Pure Harvest is levered to are Colorado and Michigan (Note Pure Harvest is in the process of being pre-qualified and approved for the transactions by LARA in Michigan and MED in Colorado). Through acquisitions and strategic partnerships, the company has been building a portfolio of assets that are levered to the most exciting aspects of the cannabis value chain. Pure Harvest has an attractive growth profile and we believe that the market does not fully appreciate or understand the opportunity.
Last week, Pure Harvest announced a major milestone and reported to have completed the acquisition of EdenFlo, LLC, a large-scale producer of CBD extracts and concentrates. The acquisition adds a significant CBD production and distribution company to Pure Harvest’s growing cannabis portfolio and we are favorable on the structure of the transaction.
The acquisition of EdenFlo comes less than two months after Pure Harvest signed an agreement to acquire Sofa King Medical Wellness Products (SKM), a vertically integrated cannabis operator located in Dumont, Colorado. The dispensary is strategically located near Colorado’s most famous ski resorts and we are favorable on the amount of value that can be created between SKM and Eden Flo.
With regard to the recreational cannabis opportunity in Michigan, Pure Harvest is well positioned to be an early mover on the market. Last month, Pure Harvest announced an agreement to acquire 51% of How Smooth It Is, Inc. (HSII), a licensed medical cannabis processor. The agreement will allow Pure Harvest to expand out of Colorado and we find this to be an attractive aspect of the story.
If you were to combine the amount of value that Pure Harvest can capture between its Colorado assets and its Michigan assets, you will see that the opportunity has substantial upside potential. Over the next year, we expect Pure Harvest to report impressive growth and believe that the market discounts the value that is associated with its portfolio of assets.
Green Thumb: An Acquisition and Growth Story
Green Thumb Industries Inc. (GTII.CN) (GTBIF) has one of the most impressive portfolios of US cannabis assets and has been nothing short of an execution story. During the last year, the company has recorded a number of advancements as it has increased the number of states that it has leverage to.
From a management team standpoint, Green Thumb is one of the best in the business. CEO Ben Kovler is the heir to the Jim Beam fortune, and we are favorable on the experience and the relationships that he brings to the business. Through Kovler’s relationships, Green Thumb has been able to secure strategic investors, and this has put the business in a special league of companies.
During the last year, Green Thumb reported impressive growth and we believe that this is a trend that is just getting started. Going forward, we expect Green Thumb to report incredible growth and are favorable on the long-term opportunity. When compared to its peers, Green Thumb has held up better than most and we believe that the business is well positioned to be a long-term leader in the sector.
Pursuant to an agreement between StoneBridge Partners LLC and Pure Harvest Cannabis Group (PHCG) we have been hired for a period of 90 days beginning March 11, 2020 and ending June 11, 2020 to publicly disseminate information about (PHCG) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month (PHCG) for or were paid “0” shares of restricted common shares. We own zero shares of (PHCG), which we purchased in the open market. We plan to sell the “ZERO” shares of (PHCG) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (PHCG) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.
Helix Technologies, Inc, (OTCQB:HLIX) (the “Company”) the leading provider of critical infrastructure services to the legal cannabis industry, announced today that its financial results for the first quarter of fiscal year 2020 will be available on Friday, May 15, 2020, and the Company will host a conference call at 5:30 p.m. eastern time on Monday, May 18th to discuss the financial results and the Company’s positioning for growth for the remainder of 2020 and beyond. There will be a live Q&A following the presentation portion of the call. Investors are also encouraged to submit questions via email prior to and during the call by emailing firstname.lastname@example.org
We recommend calling in approximately 10 minutes prior to the start of the call. Interested parties can participate using the following information:
Time: Monday, May 18th 5:30 p.m. EDT
Attendee Dial In: 866-342-8588 or 203-518-9865
Passcode or ID: 43549
To receive investor updates for Helix Technologies or follow-up information related to the call, please sign up for investor updates here.
About Helix Technologies, Inc.
Helix Technologies, Inc. (OTCQB: HLIX) is the leading provider of critical infrastructure services, helping owners and operators of licensed cannabis businesses stay competitive and compliant while mitigating risk. Through its proprietary technology suite and security services, Helix Technologies provides comprehensive supply chain management, compliance tools, and asset protection for any license type in any regulated cannabis market. While Helix provides services to the Cannabis and Hemp Industries, the Company does not deal directly with the plant or any derivative products. Helix Technologies’ products reach over 2,000 customer locations in 38 states and 9 countries and has processed over $20 billion in cannabis sales. For more information on Helix Technologies and to sign up for investor updates, visit us at www.helixtechnologies.com. and follow us on Facebook, Twitter and LinkedIn. Sign up for the CannaPulse Newsletter for legislative changes, software updates and more.
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: our ability to fund our operations and pay any outstanding debt; fluctuations in our financial results; general economic risks; the volatile nature of the market for our products and services and other factors that could impact our anticipated growth; our ability to manage our growth; changes in laws and regulations regarding the cannabis industry and service providers in the cannabis industry; reliance on key personnel; our ability to compete effectively; security and other risks associated with our business; intellectual property risks; and other risk factors set forth from time to time in our SEC filings. Helix Technologies assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Media Contact: Colt Peterson Helix Technologies, Inc. 303-324-1022 email@example.com
IR Contact: Scott Ogur, CFA Helix Technologies, Inc. firstname.lastname@example.org
Aleafia Health Inc.’s (TSX: ALEF, OTC: ALEAF) (“Aleafia Health” or the “Company”) indirect subsidiary, Emblem Germany GmbH (“Emblem Germany”), has formally submitted its application to German regulators for EU Good Manufacturing Practices (“EU-GMP”) certification.
The Company’s newly licensed Paris Facility has been purpose built to meet EU-GMP certification requirements, pharmaceutical-grade production’s highest standard, and as a result, provides wide access to global markets. The application, if successful, would allow the Company’s Paris Facility to produce and export EU-GMP certified cannabis products to the European Union.
Cannabis production operations commenced on May 6, 2020 at the Paris Facility Phase II expansion, only three business days following receipt of the amended Health Canada licence.
Aleafia Health indirectly owns 60 percent of Emblem Germany, by way of a joint-venture between Emblem and German pharmaceutical wholesaler and logistics company, Acnos Pharma GmbH (“Acnos”). It is difficult to ascertain the timeline for securing certification, but the Company intends to continue preparing for an eventual facility inspection.
Aleafia Health and Acnos’ senior management are directing the effort and have previously led the build-out, certification and operation of multiple EU-GMP certified pharmaceutical production facilities in The Netherlands, Germany and North America.
Later this month, Acnos is expected to complete a new state-of-the-art pharmaceutical production and supply chain facility in Aachen Brand, Germany. It contains a dedicated cannabis distribution hub that Acnos owns and Emblem Germany will operate, allowing the Company to commence sales upon receipt of necessary German export and import permits.
“The state-of-art expansion of the Paris Facility, purpose built to meet EU-GMP standards, creates a unique competitive advantage with significant barriers to entry,” said Aleafia Health CEO Geoffrey Benic. “We look forward to leveraging the skillsets of our strong partner Acnos Pharma along with our management team’s in-house EU-GMP expertise.”
“The near completion of our international cannabis distribution center along with Emblem’s Paris Facility Phase II expansion licence are breakthrough milestones toward our goal to achieve a EU-GMP Licence and receiving Emblem-produced cannabis oil products in Germany,” said Maximillian Claudel, Acnos Co-Owner and Managing Director, Emblem Germany.
Aleafia Health is a vertically integrated and federally licensed Canadian cannabis company offering cannabis health and wellness services and products in Canada and in international markets. The Company operates medical clinics, education centres and production facilities for the production and sale of cannabis.
Aleafia Health owns three significant licensed cannabis production facilities, including the first large-scale, legal outdoor cultivation facility in Canadian history. The Company produces a diverse portfolio of commercially proven, high-margin derivative products including oils, capsules and sprays. Aleafia Health operates the largest national network of medical cannabis clinics and education centres staffed by MDs, nurse practitioners and educators and operates internationally in three continents.
Innovation, the heart of Aleafia Health’s competitive advantage, has led to the Company maintaining a medical cannabis dataset with over 10 million data points to inform proprietary illness-specific product development and its highly differentiated education platform FoliEdge Academy. The Company is committed to creating sustainable shareholder value; the TSX Venture Exchange named Aleafia the 2019 top performing company prior to its graduation to the TSX.
Forward Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian and United States securities laws. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this news release. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including risks contained in the Company’s annual information form filed with Canadian securities regulators available on the Company’s SEDAR profile at www.sedar.com. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.
Pure Harvest Cannabis Group, Inc. (OTC: PHCG), an emerging cannabis and hemp-CBD holding company, is pleased to announce the official launch of its wholly owned subsidiary, Wild Pet Blends, a CBD-based pet supplement company.
Wild Pet Blends offers unique full-spectrum hemp extract products that go beyond what is currently offered in the CBD market for pets. It’s scientifically curated blends have been designed as multi-dimensional pet supplements and chews that combine vitality enhancing full spectrum CBD, anti-oxidants, essential fats, vitamins, and minerals in combination with digestive enzymes and probiotics for your pet’s overall health and wellness.
Wild Pet Blends has an aggressive development plan that includes top-tier sales talent with over 25 years in the pet industry, distribution partnerships, and expanded product offerings. The Company’s ability to produce a steady supply of premium Full-Spectrum hemp oil that is rich in cannabinoids will be a key differentiating factor for our product line.
The pet CBD market is expected to grow exponentially in the near term. According to industry researcher Brightfield Group, demand for cannabidiol (CBD) is likely to generate U.S. sales of $24 billion over the next few years. The report indicates a key driver of the CBD market’s growth will be pet CBD sales, expected to rise five-fold to $400 million during that period. Another recent report by BDS Analytics and Arcview Market Research projects the pet CBD market will grow five percent faster than the overall CBD market over the next four years.
“We continue to diversify our portfolio of holdings in the cannabis space,” stated Matt Gregarek, CEO, Pure Harvest Cannabis Group. “Our objective is to develop, identify, and acquire operations in the fastest growing sectors of the already rapidly growing cannabis industry and to establish durable revenue lines. The expansion of the CBD pet market is clear and Wild Pet Blends offers a tremendous catalog of superior products.”
“Today, we are launching an aggressive national marketing plan to drive demand and awareness online and to secure our position in this vertical. Next, we intend to pursue opportunities to put Wild Pet Blends in as many retail locations as possible,” added Gregarek.
About Wild Pet Blends
Wild Pet Blends’ premium formulations are specially designed to unleash your pet’s full potential. At Wild Pet Blends, we use only pure Colorado CBD Oil and other premium ingredients to enhance the lives of our furry friends. We believe every pet should have the opportunity to live their best life, and that’s why we created the Wild Pet Blends line of premium pet products.
Visit our online store to see the full line of Wild Pet Blend products today.
The Pure Harvest Cannabis Group, Inc. (OTC: PHCG) is a publicly traded holding company involved in all cycles of cannabis and CBD development. The team is committed to providing the highest quality products, ethical growing standards, environmental awareness, and corporate integrity. Pure Harvest intends to develop into a large scale vertically integrated multi-state operator (MSO), producer, and distributor in well-established and growing markets.
Pure Harvest is focused on developing precision dosed cannabinoid health and wellness consumer products. The Company’s goals include establishing Pure Harvest as an iconic consumer product brand offering a wide variety of cannabis/CBD products that can be sold in multiple international markets that have legalized cannabis and hemp-derived products.
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933, are subject to Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbors created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate. Future events and results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements.
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