TORONTO, May 20, 2019 /CNW/ - 48North Cannabis Corp.
("48North" or the "Company") (TSXV:NRTH), a leading licensed
cannabis producer focused on next-generation cannabis products, has
released its financial and operating results for the three and nine
months ended March 31, 2019. The
Company's financial statements and related management discussion
and analysis for the period are available on the Company's SEDAR
profile at www.sedar.com and on the Company's website at
www.48nrth.com/investors.
Financial and Operating Highlights for Fiscal Q3 2019
- 48North remained EBITDA positive for its third consecutive
quarter with the Company's three-month EBITDA totalling
$78,000, representing an 570%
increase from Q2 to Q3. EBITDA for the nine months ended
March 31, 2019 was $696,000 compared to ($4,429,000) for the comparative period in 2018.
Third quarter revenues totaled $689,000, with nine month revenues totalling
$4.3 million.
- Inventory increased from $928,000
at December 31, 2018 to $2,481,000 at March 31,
2019 as the Company positions for next-generation products
expected to occur in Fall 2019.
- 48North announced that it signed Canada's first-ever letter of intent for
outdoor-grown cannabis with the Société Québécoise du cannabis
(SQDC). Under the agreement, 48North will supply 1,200 kilograms of
cannabis to the SQDC from its outdoor farm in Brant County, Ont.,
and 120 kilograms of indoor-grown cannabis from its facilities in
Brantford, Ont., and Kirkland Lake, Ont.
- 48North announced that it signed an exclusive licensing
agreement with U.S.-based Arbor Pacific Inc. to bring its premium
Avitas cannabis brand to Canadian consumers.
- 48North received its Standard Processing Licence from Health
Canada for its Good & Green facility in Brantford, Ont. This additional licence
solidifies the Company's ability to launch next-generation cannabis
products for retail sale in fall 2019.
Events Subsequent to Q3 Fiscal 2019
- 48North received its outdoor cultivation licence from Health
Canada for its 100-acre (3.7-million-sq.-ft.) organic farm ("Good
Farm"), located in Brant County, Ont. Good Farm is one of the
largest-ever licensed cannabis facilities in the world. With Health
Canada's licensing of Good Farm, 48North is expecting to harvest
40,000 kg of dried cannabis in 2019 from Good Farm.
- 48North closed a bought deal for gross proceeds of $28.75 million. The use of the proceeds is
earmarked for the successful operation of Good Farm and the
development and distribution of next-generation cannabis products
to consumers for retail sale in Canada in October
2019.
- 48North announced that it accelerated the expiry of certain
common share purchase warrants, with gross proceeds to the company
totalled $13.6 million.
- 48North entered into a formal partnership with humble+fume to
build a state-of-the-art cannabis extraction facility and packaging
line at Good House. Upon completion of the extraction facility,
48North is expected to be able to process more than 30,000 kg of
cannabis annually. The build-out of the extraction facility and
packaging line is expected to be completed in summer 2019 and is
being paid by humble+fume.
- Finally, 48North was recognized as "Brand of the Year," at the
annual O'Cannabiz Industry Awards Gala.
"48North successfully achieved all of the milestones it targeted
in Q3 and is therefore well on its way accomplishing its goal
of delivering next-generation products for fall 2019. This included
receiving its outdoor cultivation licence from Health Canada for
its Good Farm," said Alison Gordon,
co-CEO of 48North.
"To successfully deliver on the Company's commitment to have
next-generation products ready for retail sale by fall 2019, and
with previous uncertainty with respect to the licensing of the
outdoor farm, on a precautionary basis, 48North strategically
withheld a significant percentage of its indoor-grown cannabis for
next-generation cannabis products. This reserve product will now be
sold as dried flower," Ms. Gordon said.
Selected Financial Information for Three Months Ended
March 31, 2019
All amounts are expressed in Canadian
dollars
|
3-months ended
March 31, 2019
|
|
9-months ended
March 31, 2019
|
Revenue
|
689,203
|
|
4,347,652
|
Gross
profit
|
2,598,586
|
|
6,461,030
|
EBITDA*
|
77,630
|
|
695,783
|
Net and comprehensive
loss
|
(1,471,587)
|
|
(3,355,370)
|
Total
assets
|
53,997,211
|
|
53,997,211
|
Total
liabilities
|
4,723,223
|
|
4,723,223
|
Cash on
hand
|
17,990,481
|
|
17,990,481
|
Proforma cash on hand
post financing and
warrants **
|
58,361,677
|
|
58,361,677
|
*EBITDA is a non-IFRS measure and defined as earnings before
interest, tax, depreciation and amortization, and stock-based
compensation expense, and is not a recognized measure for financial
statement presentation under IFRS. EBITDA is not intended to be
considered as an alternative to net earnings, cash flow from
operations, or any other measure of performance prescribed by IFRS.
The Company's EBITDA may also not be comparable to EBITDA used by
other companies, which may be calculated differently. The Company
considers EBITDA to be a meaningful measure to assess its operating
performance in addition to standardized IFRS measures. It is
included because the Company believes it can be useful in measuring
its ability to fund capital expenditures and expand its
business.
**On April 2, 2019 the Company
completed a financing for gross proceeds of $28.75 million. On May 2, 2019, the Company completed the
acceleration of 18 million warrants with gross proceeds of
$13.6 million.
Third-Quarter 2019 Results Conference Call
When:
Tuesday, May 21, 2019
Dial-in number: 8:30 AM ET
Toll-free North American number: 1-888-231-8191 |
647-427-7450
The conference ID is 5033849 and you will be prompted to provide
your name and company.
About 48North
48North Cannabis Corp. (TSXV: NRTH) is a vertically
integrated cannabis company focused on the health and wellness
market through cultivation and extraction, as well as the creation
of innovative, authentic brands for next-generation cannabis
products. 48North is developing formulations and manufacturing
capabilities for its own proprietary products, as well as
positioning itself to contract manufacture similar products for
third parties. 48North operates Good Farm, a 100-acre organic
cannabis farm, expected to produce over 40,000 kg of organic,
sun-grown cannabis securing a significant first-mover advantage in
the production of low-cost, next-generation, extract-based cannabis
products. In addition, 48North operates two indoor-licensed
cannabis production sites in Ontario with more than
86,000 square feet of production capacity. 48North cultivates
unique genetics at its wholly owned subsidiaries, DelShen
Therapeutics Corp. ("DelShen") and 2599760 Ontario Corp. dba Good
& Green ("Good & Green"), both Licensed Producers under the
Cannabis Act. 48North has a growing portfolio of brands that
include Latitude, a women's cannabis platform
(explorelatitude.com), Mother & Clone, a rapid-acting
sublingual cannabis nanospray (momandclone.com) and Avitas, a
single strain vaporizer cartridge (avitasgrown.com).
DISCLAIMER & READER ADVISORY
Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accept
responsibility for the adequacy or accuracy of this 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. Forward-looking
statements in this news release include statements relating to the
business plan and future operations of the Company. Such statements
are subject to risks and uncertainties that may cause actual
results, performance or developments to differ materially from
those contained in the forward-looking statements, including the
possibility that the business plan described herein will not be
completed, that 48North may not derive the expected benefits from
such business plans, or that applicable regulatory approvals will
be obtained to carry out the activities contemplated herein. The
business of the Company is subject to a number of material risks
and uncertainties. Please refer to the Company's SEDAR filings for
further details. 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 Company being able to obtain the necessary corporate,
regulatory and other third-party approvals, and licensing and other
risks associated with the Cannabis Act. 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.
SOURCE 48North Cannabis Co.