TORONTO, Nov. 25, 2019 /CNW/ - 48North Cannabis Corp.
("48North" or the "Company") (TSXV: NRTH), a leading
licensed cannabis producer focused on low-cost cultivation, brand,
and consumer-focused cannabis products, has released its financial
and operating results for the first quarter ended September 30, 2019. The Company's financial
statements and related management's 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 First-Quarter Fiscal
2020
- Quarter over quarter revenue growth with first-quarter revenue
of $1.6 million, representing a 229
per cent increase over fourth-quarter 2019 revenues of $484,000.
- At the end of the quarter, 48North had $40 million of cash and cash equivalents on hand
and remains well-funded to execute on its business plan.
Events Subsequent to First-Quarter Fiscal 2020
- 48North is pleased to announce the completion of construction
at Fume Labs, its large scale CO2 and ethanol extraction facility
operated in partnership with humble+fume operated at Good:House.
With the capacity to process over 30,000 kg of biomass annually,
Fume Labs will allow the Company to produce, package and distribute
in excess of five million concentrate vaporizers annually.
- The Company announced it had acquired Sackville & Co.
Merchandising Ltd. ("Sackville & Co.") a leading U.S.-based
cannabis brand focused on design-forward cannabis accessories and
CBD-based products.
- In addition, the Company announced that it signed an exclusive
licensing agreement with U.S.-based APCNA Holdings LLC., to bring
its best-selling, premium cannabis topicals brand Apothecanna to
Canadian consumers.
- 48North launched its outdoor-focused dried flower brands; First
Harvest and Trail Mix. First Harvest, 48North's seasonal
high-quality outdoor-grown cannabis is expected to be available for
retail sale in Winter 2020. Trail Mix, the Company's affordable,
natural cannabis brand is also expected to be available Winter
2020, 48North expects that Trail Mix will be among the lowest-cost
legal cannabis brands available for Canadian consumers.
Good:Farm Harvest Update
- 48North completed its first outdoor harvest at Good:Farm and
hit its production cost targets. The total cash cost per gram of
production at Good:Farm was $0.25/gram, meeting the Company's projection.
This places 48North among the lowest-cost producers of legal
cannabis in Canada.
- 48North harvested 12,000 kg of dried cannabis in its first year
of outdoor production at Good:Farm. In fact, the Company
successfully cultivated enough cannabis at Good:Farm to meet its
initial 2019 projections, but total harvest volume was reduced due
to significant delays in the availability of licensed drying space,
which will be resolved for the 2020 grow season.
- That said, the Company remains on track to meet its previously
announced supply agreements with provincial wholesalers in
Alberta, Ontario and Quebec. In addition, 48North is on track to
meet its commitment to supply Fume Labs with a significant surplus
of cannabinoid rich biomass for the development of next-generation
cannabis products such as vapes and topicals.
- 48North has commitments for approximately 11,000 kg of its
cannabis, with an average wholesale price of approximately
$3.35/gram. The sale of outdoor
grown cannabis is expected to generate significant revenue
increases for the Company in upcoming quarters.
- The Company looks forward to further optimizing its operations
at Good:Farm in 2020 by applying lessons learnt on the farm in
2019, including: adding licenced drying capacity, the addition of
an experienced cultivation and operations team, prioritizing
cultivars that performed well in 2019 and perfecting harvesting
techniques.
- As previously mentioned, 48North made significant changes to
its senior operations team, these changes positioned the Company to
preserve the 2019 crop and to optimize 2020 yields.
- 48North projects that at the Good:Farm in 2020, the Company
will be able reduce its cash cost per gram significantly.
- While the Company was not able to dry the full capacity at
Good:Farm due to licensed drying capacity, 48North remains
committed to growing cannabis outdoors at scale. Looking ahead to
2020 the Company is well-positioned to remain one of Canada's lowest cost producers of cannabis
with a year head start on many in the industry.
"48North achieved all of the milestones it targeted in Q1. These
included: increased revenue growth, the harvest at Good:Farm,
continued strategic U.S expansion, and the announcement of
additional licensing agreements for next-generation cannabis
products," said Alison Gordon, CEO
of 48North.
"Our strong business performance throughout the quarter
increased revenue growth," Ms. Gordon continued. "That said,
today's numbers do not include revenue from the sale of cannabis
from the Company's outdoor cultivation facility. Next quarter, and
in subsequent quarters, 48North expects to begin showing increased
revenue from the sale of dried cannabis from Good:Farm and
next-generation cannabis products. While 48North missed its
projections at Good:Farm, the Company has taken the necessary
action to optimize the Good:Farm for 2020, notwithstanding, the
Company will soon begin showing significant revenue from the 2019
harvest. Without question, 48North's brand is taking hold in the
Canadian marketplace, the Company's products, in multiple
jurisdictions, have consistently been best-sellers and consumers
look forward to purchasing 48North's innovative product suite."
Selected Financial Information
All amounts are
expressed in Canadian dollars
|
3-months
ended
September 30,
2019
|
3-months
ended
September 30,
2018
|
Revenue
|
1,594,679
|
1,271,544
|
Net income
(loss)
|
2,201,354
|
(1,011,154)
|
Total
assets
|
99,237,470
|
26,339,495
|
Total
liabilities
|
8,332,257
|
1,176,925
|
Cash on
hand
|
40,392,298
|
9,815,083
|
First Quarter 2020 Results Conference Call
When:
Tuesday, November 26, 2019 at
8:30 AM E.T.
Dial-in number: 1 (888) 231 8192
The conference ID is 8672507 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 which produces 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. 48North cultivates unique genetics at
its wholly owned subsidiary, DelShen Therapeutics Corp. ("delshen")
and processes cannabis and manufactures next-generation cannabis
products at Good & Green Corp. ("Good:House"), 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); Avitas, a
single-strain vaporizer cartridge (avitasgrown.com) and Quill, a
leader in the manufacturing of beautifully designed,
lifestyle-focused and sleek vape products (quill.me).
DISCLAIMER & READER ADVISORY
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts 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
beliefs or assumptions as to the outcome and timing of such future
events. Actual future results may differ materially. Please refer
to the Company's SEDAR filings for further details concerning the
risks associated with the Company's business. 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 Corp.