- The Company has generated over $27
million in cumulative recreational cannabis sales since
legalization on October 17, 2018,
with an average gross margin of over 31%.
- Q2-2019 total revenue of $16.2
million represents a 328% increase versus prior quarter
total revenue.
- 23 retail cannabis stores open at the end of
Q2-2019.
- The Company expects to have 40 stores open and operating by
the end of calendar 2019.
TORONTO, April 16, 2019 /CNW/ - National
Access Cannabis Corp. ("NAC" or the "Company") (TSXV: META), the
largest private retailer of recreational cannabis in
Canada, today announced its financial results for the second
quarter ended February 28, 2019. All
amounts are expressed in Canadian dollars.
"With 23 stores operating in two provinces, seven applications
underway in B.C. and a focused strategy for Ontario, we are poised to continue growing our
leading footprint at a national level, while driving solid
financial performance for our shareholders," said Mark Goliger, CEO of NAC. "I am very proud of
our team's operational execution, which has resulted in our retail
cannabis operating business unit generating consistently strong
revenue growth and positive Adjusted EBITDA. Our team is focused on
accretively building our national retail footprint to 40 stores by
the end of calendar 2019, while maximizing the same-store sales
growth and contribution of individual store locations. As the
Canadian cannabis market finds its footing, we also expect supply
issues to begin to abate, which will enable us to continue offering
our customers the wide selection they are used to, while optimizing
our working capital and Adjusted EBITDA for the benefit of
shareholders."
This press release should be read in conjunction with the
unaudited condensed interim consolidated financial statements and
accompanying notes for the three and six months ended February 28, 2019 and the related Interim
MD&A – Quarterly Highlights for the three and six-month period
ended February 28, 2019.
_______________________________
|
1
|
Adjusted EBITDA is a
non-IFRS measure that does not have a standardized meaning
prescribed by IFRS. For more information and a reconciliation
of non-IFRS measures to the closest IFRS measure, see below under
"Financial Measures", or find additional detail in the "Non-IFRS
Financial Measures" section in the Company's Interim MD&A –
Quarterly Highlights for the three and six-month period ended
February 28, 2019, available on SEDAR and on the Company's
website.
|
Select Operating Highlights
- The Company currently operates 23 recreational cannabis retail
stores, 14 in Alberta and 9 in
Manitoba.
- Announced the appointment of Michael
Cosic as Chief Financial Officer and Lori Bailey as Senior Vice-President of
Retail.
- The Company entered into a share purchase agreement with the
shareholders of New Leaf Emporium, which will enable NAC to expand
into Saskatchewan through an
operating Moose Jaw location, and
an e-commerce license2.
- Entered into a six-month $9,000,000 loan agreement with Opaskwayak Cree
Nation; carrying an interest rate of 8% per annum.
- Acquired all of NAC Alberta Inc.'s minority interest in NAC
Northern Alberta GP and NAC Northern Alberta Limited Partnership,
giving NAC 100% ownership of various leaseholds, and rights to
operate retail locations in Northern
Alberta.
Select Financial Highlights – Three Months Ended February 28, 2019
|
Medical
Cannabis
Education Clinics
|
Retail
Cannabis
Stores
|
Research
|
Corporate
|
Total
|
Revenue
|
320,114
|
15,881,986
|
-
|
-
|
16,202,100
|
Cost of goods
sold
|
(47,009)
|
(10,925,275)
|
-
|
-
|
(10,972,284)
|
Gross
profit
Gross profit margin
(%)
|
273,105
85%
|
4,956,711
31%
|
-
n/a
|
-
n/a
|
5,229,816
32%
|
Operating
expenses
|
(598,928)
|
(4,965,013)
|
(168,302)
|
(4,011,736)
|
(9,743,979)
|
Loss from
operations
|
(325,823)
|
(8,301)
|
(168,302)
|
(4,011,736)
|
(4,514,163)
|
Adjusted
EBITDA
Adjusted EBITDA
%
|
(240,178)
n/a
|
1,769,914
11%
|
(168,302)
n/a
|
(2,722,554)
n/a
|
(1,361,420)
n/a
|
Other
expenses
|
-
|
-
|
-
|
(1,133,591)
|
(1,133,591)
|
Net loss
|
(325,823)
|
(8,301)
|
(168,302)
|
(5,145,327)
|
(5,647,754)
|
Select Financial Highlights – Six Months Ended February 28, 2019
|
Medical
Cannabis
Education Clinics
|
Retail
Cannabis
Stores
|
Research
|
Corporate
|
Total
|
Revenue
|
814,994
|
19,174,333
|
-
|
-
|
19,989,328
|
Cost of goods
sold
|
(138,332)
|
(13,173,259)
|
-
|
-
|
(13,311,591)
|
Gross
profit
Gross profit margin
(%)
|
676,663
83%
|
6,001,074
31%
|
-
n/a
|
-
n/a
|
6,677,737
33%
|
Operating
expenses
|
(1,197,253)
|
(7,324,560)
|
(304,460)
|
(7,981,497)
|
(16,807,770)
|
Loss from
operations
|
(520,990)
|
(1,323,486)
|
(304,460)
|
(7,981,497)
|
(10,130,033)
|
Adjusted
EBITDA
Adjusted EBITDA
%
|
(367,235)
n/a
|
2,362,888
12%
|
(304,460)
n/a
|
(5,168,986)
n/a
|
(3,477,793)
n/a
|
Other
expenses
|
-
|
-
|
-
|
(3,393,872)
|
(3,393,872)
|
Net loss
|
(520,590)
|
(1,323,486)
|
(304,460)
|
(11,375,369)
|
(13,523,905)
|
________________________
|
2
|
Subject to the close
of the acquisition and regulatory approval.
|
Financial Measures
There are measures included in this news release that do not
have a standardized meaning prescribed by IFRS and therefore may
not be comparable to similarly titled measures and metrics
presented by other publicly traded companies. The Company includes
these measures because it believes certain investors use these
measures and metrics as a means of assessing financial performance.
EBITDA (earnings before interest, taxes, depreciation and
amortization) is a non-IFRS financial measure that does not have
any standardized meaning prescribed by IFRS and may not be
comparable to similar measures presented by other companies.
Adjusted EBITDA
Three months ended
February 28,
2019
|
Medical
Cannabis
Education Clinics
|
Retail
Cannabis
Stores
|
Research
|
Corporate
|
Total
|
Loss from
operations
|
(325,823)
|
(8,301)
|
(168,302)
|
(4,011,736)
|
(4,514,163)
|
Amortization of
property and equipment
|
86,645
|
372,311
|
-
|
-
|
457,956
|
Amortization of
intangible assets
|
-
|
-
|
-
|
419,133
|
419,133
|
Professional fees –
fundraising and
acquisition
|
-
|
-
|
-
|
283,113
|
283,113
|
Integration and
restructuring costs
|
-
|
-
|
-
|
213,472
|
213,472
|
Pre-operating retail
expenses
|
-
|
1,405,604
|
-
|
-
|
1,405,604
|
Share based
compensation
|
-
|
-
|
-
|
373,464
|
373,464
|
Adjusted
EBITDA
|
(240,178)
|
1,769,914
|
(168,302)
|
(2,722,554)
|
(1,361,420)
|
Six months ended
February 28, 2019
|
Medical
Cannabis
Education Clinics
|
Retail
Cannabis
Stores
|
Research
|
Corporate
|
Total
|
Loss from
operations
|
(520,590)
|
(1,323,486)
|
(304,460)
|
(7,981,497)
|
(10,130,033)
|
Amortization of
property and equipment
|
153,355
|
428,452
|
-
|
-
|
581,807
|
Amortization of
intangible assets
|
-
|
-
|
-
|
838,266
|
838,266
|
Professional fees –
fundraising and
acquisition
|
-
|
-
|
-
|
922,594
|
922,594
|
Integration and
restructuring costs
|
-
|
-
|
-
|
380,480
|
380,480
|
Pre-operating retail
expenses
|
-
|
3,257,922
|
-
|
-
|
3,257,922
|
Share based
compensation
|
-
|
-
|
-
|
671,171
|
671,171
|
Adjusted
EBITDA
|
(367,235)
|
2,362,888
|
(304,460)
|
(5,168,986)
|
(3,477,793)
|
Management defines Adjusted EBITDA as the net loss from
operations, as reported, before interest, tax, and adjusted by
removing non-cash items, including stock-based compensation
expense, depreciation, and further adjusted to remove integration
and restructuring related costs, as well as upfront costs required
to open a retail store. Management believes Adjusted EBITDA is a
useful financial metric to assess its operating performance on a
cash adjusted basis before the impact of non-cash items and
acquisition related costs. Adjusted EBITDA is a non-IFRS financial
measure that does not have any standardized meaning and therefore
may not be comparable to similar measures presented by other
issuers.
NAC Enters into Agreement to Issue Shares for
Services
The Company today announced that National Access Canada
Corporation ("NACC"), a subsidiary of NAC, has entered into an
agreement with Kyle Wilson, pursuant
to which NACC has agreed to issue common shares of the Company to
Kyle Wilson in exchange for
consulting services previously rendered by Kyle Wilson. Pursuant to the terms of the
agreement, NACC will pay a total fee of $82,800, to be paid by way of common shares of
the Company.
Pursuant to TSX Venture Exchange Policy 4.3 – Shares for
Debt, the deemed price of the securities to be issued is
$0.92, being the Market Price (as
such term is defined in the policies of the TSX Venture Exchange)
of the common shares of the Company on the last trading day before
the date of the agreement. The issuance of common shares to
Kyle Wilson is subject to approval
of the TSX Venture Exchange.
NAC Grants Stock Options to Officer of the Company
The Company has granted stock options to purchase an aggregate
of 500,000 common shares of the Company to an officer of NAC. The
stock options have an exercise price of $0.92 per common share and expire four years from
the date of grant. One-fifth of the options granted vest six months
following the date of the grant, with the remainder of the options
vesting over the course of four installments, each installment
vesting every three months thereafter.
About National Access Cannabis Corp.
NAC is
Canada's largest recreational
cannabis retailer. With 23 retail locations nationwide, NAC is the
leader in secure, safe and responsible access to legal recreational
cannabis in Canada. Through its
Canada-wide network of Meta
Cannabis Supply Co.™ and NewLeaf Cannabis™ recreational cannabis
retail stores and NAC Medical's cannabis clinics and pharmacy
partnerships, NAC enables the public and registered patients to
gain knowledgeable access to Canada's network of authorized Licensed
Producers of cannabis. NAC is listed on the TSX Venture Exchange
under the symbol (TSXV: META).
For more information, visit:
www.nationalaccesscannabis.com
www.metacannabis.com
www.newleafcannabis.ca
www.nacbio.com
www.nacmedical.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Statements
This news release contains
forward looking statements and forward-looking information within
the meaning of applicable securities laws. The use of any of
the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends" and similar expressions are
intended to identify forward looking statements or information.
Forward-looking statements and information in this news release
includes, but is not limited to, the planned opening of cannabis
retail stores and the planned opening dates of same, the number of
NAC cannabis retail stores expected to open and/or become licensed,
the locations of cannabis retail stores, the launch of an online
cannabis retail store in Manitoba, the abatement of supply
issues relating to cannabis in Canada, NAC's plan to establish retail
cannabis distribution networks in Canada, New Leaf Emporium
receiving a cannabis retail permit granted by the Saskatchewan
Liquor and Gaming Authority in respect of its premises in
Moose Jaw, Saskatchewan, the
successful closing of the purchase of New Leaf Emporium and NAC's
anticipated expansion into Saskatchewan. Although the Company believes
that the expectations and assumptions on which the
forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the
forward-looking statements and information because the Company
cannot give any assurance that they will prove to be
correct. Since forward looking statements and information
address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results and
developments may differ materially from those that are currently
contemplated by these statements depending on, among other things,
risks relating to the ability to obtain or maintain licenses to
retail cannabis products; future legislative and regulatory
developments involving cannabis; inability to access sufficient
capital from internal and external sources, and/or inability to
access sufficient capital on favourable terms; the labour market
generally and the ability to access, hire and retain employees; and
the medical and retail cannabis industry
in Canada generally. The Company cautions that the
foregoing list of risks and uncertainties is not exhaustive.
The forward-looking statements and information contained in this
news release are made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any
forward-looking statement or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE National Access Cannabis Corp.