VANCOUVER, Feb. 5, 2020 /CNW/ - Zenabis Global
Inc. (TSX: ZENA) ("Zenabis" or
the "Company") is pleased to provide an update on its
recent facility construction and licensing activities, sales and
marketing highlights and recent cannabis production results.
"December 2019 delivered our
largest-ever harvest. This completes a whole year of
successful harvests from Zenabis Atholville, since the creation of
Zenabis Global Inc. In that time, we have increased
Atholville monthly harvest yields
by 800%, which is an amazing achievement by the entire Zenabis
team," said Kevin Coft, Chief
Executive Officer of Zenabis. "Of the total 2019 Atholville harvest
figure of nearly 20,000 kg, 20% was harvested just in December.
This shows us what steady-state cultivation and production at
Atholville can deliver. We are
looking forward to achieving steady-state production at
Langley with more license
amendments in progress."
"We also realized strong indicative demand from our provincial
partners in December, resulting in our largest-ever volume of units
shipped in the month. We are excited about what 2020 will bring,"
continued Mr. Coft.
Cannabis Production Summary
In December 2019, Zenabis realized
a total harvest weight of 3,841 kg of dried cannabis.
The amount harvested at Zenabis Atholville for the twelve months
ending December 2019 outperformed the
revised design capacity of the flower rooms by 0.93%, harvesting a
total of 19,420 kg of dried cannabis. A month-to-month comparison
of actual harvests compared with harvest forecast based on the
revised design capacity for the last twelve months for Zenabis
Atholville is provided in the table below.
Revised Design
Capacity
Performance at Zenabis
Atholville
|
Jan
2019
|
Feb
2019
|
Mar
2019
|
Apr
2019
|
May
2019
|
June
2019
|
July
2019
|
Aug
2019
|
Sept
2019
|
Oct
2019
|
Nov
2019
|
Dec
2019
|
Total
|
Actual Harvest Weight
(kg)
|
474
|
480
|
518
|
809
|
908
|
756
|
1,238
|
1,912
|
2,089
|
3,586
|
2,810
|
3,841
|
19,420
|
Revised Design
Capacity
Harvest Weight (kg)1
|
467
|
643
|
539
|
796
|
895
|
716
|
1,097
|
1,357
|
1,715
|
3,601
|
2,940
|
4,476
|
19,242
|
Difference
(kg)
|
7
|
(163)
|
(21)
|
13
|
13
|
40
|
141
|
555
|
374
|
(15)
|
(130)
|
(635)
|
179
|
Difference (%) –
Revised
"Performance Ratio"
|
1.5%
|
(25.3%)
|
(3.9%)
|
1.6%
|
1.5%
|
5.6%
|
12.9%
|
40.9%
|
21.8%
|
(0.4)%
|
(4.4)%
|
(14.2)%
|
0.93%
|
|
|
1
|
The Revised Design
Capacity Harvest Weight was derived by converting the actual square
footage of flower room space and the forecast canopy for each
specific flower room into a kilograms per room per day figure based
on Zenabis' historical yield data at the Zenabis Atholville
facility based on the yield performance in the three months ending
June 2019 for revised Design Capacity. The Revised Design Capacity
Harvest Weight in the table above is the harvest weight that would
have resulted if the Design Capacity Yield Per Day for a room was
multiplied by the Effective Flower Room Equivalent Days, as defined
under "Performance Ratio".
|
In December 2019, Zenabis
completed 23 harvests at Zenabis Atholville. Zenabis did not
complete any harvests at Zenabis Langley or Zenabis
Stellarton.
Harvest Forecast – Zenabis Atholville, Zenabis Stellarton and
Zenabis Langley Site A – Part 1
The following table sets out Zenabis' estimated aggregate
monthly harvest for Zenabis Atholville, Zenabis Stellarton and
Zenabis Langley Site A – Part 1 from September 2019 to January
2020.
|
Sept
2019
|
Oct
2019
|
Nov
2019
|
Dec
2019
|
Jan
2020
|
Total
|
Forecast
(kg)3
|
1,731
|
3,758
|
3,881
|
4,2002
|
3,576
|
17,146
|
Actual
(kg)
|
2,089
|
3,586
|
3,332
|
3,841
|
|
12,848
|
|
|
2
|
Zenabis calculates
the Revised Design Capacity Harvest Weight based on a continuous
harvest cycle. A variance between the Forecast and Revised Design
Capacity Harvest Weight for Zenabis Atholville would be a result of
a variance in the average continuous flower days during the
month.
|
3
|
This forward-looking
estimate of future harvest results is based on the following
material assumptions: (1) Zenabis Stellarton operates at the
published design capacity on a room by room basis for the
cultivation space that is licensed and in cultivation at the
forward-looking periods noted; (2) Zenabis Atholville rooms operate
based on the current flower schedule and continue to achieve
revised Design Capacity.
|
Construction and Facility Licensing Update
Zenabis Langley
Zenabis Langley Part 1 and Part 2A are licensed and operational.
Zenabis Langley Part 2B is
substantially complete and the license amendment was submitted in
December 2019. After reviewing the
construction and licensing progress of Zenabis Langley, Zenabis
decided to amend the Part 2B license
amendment submission further to include more square footage that
was originally intended for Part 2C. This includes an increase of
approximately 2,500 sq. ft. of flower space and 18,000 sq. ft. of
operational space which includes drying rooms and packaging rooms.
Construction of Zenabis Langley Part 2C is ongoing but at a reduced
pace as the Company's focus for Zenabis Langley is for the existing
licensed or substantially completed space to achieve operational
excellence and operate at a steady state.
A summary of construction status by phase is provided below:
Phase
|
Design
Capacity
|
Description
|
Part 1
|
9,900 kg
|
• Licensed and
operational
|
Part 2A
|
39,400 kg
|
• Licensed and
operational
|
Part 2B
|
14,800 kg
|
• Consists of
40,500 sq. ft. of flower room space (one flower room) and
18,000 sq. ft. of other operational spaces (includes drying rooms
and
packaging rooms)
• Substantially
complete
• License
amendment submitted in December 2019
|
Part 2C
|
32,000 kg
|
• Consists of
82,200 sq. ft. of flower room space (two flower rooms) and
86,300 sq. ft. of other operational spaces (includes drying
rooms,
packaging rooms, mother space and vegetation space)
• HVAC,
flooring and shade screen installation is ongoing
• Security
equipment and lighting installation is substantially
complete
|
Zenabis Stellarton
Zenabis has submitted a sales license application for Zenabis
Stellarton and expects to use this site as a fulfilment centre and
packaging/processing facility upon receipt of this license.
Zenabis Delta
As the Company continues to focus on becoming cash flow
positive, the further conversion of Zenabis Delta is under review
to assess whether its analytical and laboratory services are
justified by market demand. Zenabis is also considering other plans
for the Delta facility if it
determines market demand is insufficient.
Licensing Update
Zenabis is currently in the process of various licensing
applications for Zenabis Delta, Zenabis Langley, Zenabis Stellarton
and the Zen Craft Grow program as outlined in the table below:
License
Submission
|
Submission
Month
|
Annual Design
Capacity
|
Zenabis Delta –
Analytical Testing
|
May 2019
|
N/A
|
Zen Craft Grow –
Grower 1
|
July 2019
|
350 kg
|
Zenabis Stellarton –
Sales License
|
October
2019
|
N/A
|
Zenabis Langley Site
A – Part 2B
|
December
2019
|
14,800 kg
|
Zenabis Langley Site
A – Part 2C
|
TBD4
|
32,000 kg
|
4
|
Expected submission
timeline subject to receipt of prior license or license amendment
for each facility.
|
Sales and Marketing Update
Compassionate Pricing Program
To increase medical patient access to cannabis products, and to
compete with the illicit market, Zenabis will be lowering its
medical cannabis pricing across the board for all applicable
medical patients and is offering compassionate pricing on cannabis
products including dried flower and cannabis oil products for
qualifying customers through its Compassionate Pricing Program.
About Zenabis
Zenabis is a significant Canadian licensed cultivator of medical
and recreational cannabis, and a propagator and cultivator of
floral and vegetable products. Zenabis employs staff
coast-to-coast, across facilities in Atholville, New Brunswick; Delta, Aldergrove, Pitt
Meadows and Langley, British
Columbia; and Stellarton, Nova
Scotia. Zenabis currently has 96,400 kg of licensed cannabis
cultivation space and four licensed facilities. Zenabis has 3.5
million square feet of total facility space dedicated to a mix of
cannabis production and cultivation and its non-cannabis
propagation and floral business.
Zenabis expects its Zenabis Atholville, Zenabis Stellarton and
Zenabis Langley facilities to be in steady state production in
2020. The Zenabis brand name is used in the cannabis medical
market, the Namaste, Blazery, and Re-Up brand names are used in the
cannabis adult-use recreational market, and the True Büch brand
name is used for Zenabis' kombucha products.
Forward Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Zenabis, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: the projected kilogram yield of
licensed facility space and facility space in the process of, or
scheduled for, construction and/or licensing; our expectations for
future harvests; the expected timing and completion of current and
planned conversion, expansion and optimization of our facilities,
including Zenabis Langley; the expected submissions of license
amendment applications and site evidence packages; the licensing of
our facilities and projected timing thereof; our expectations for
our extraction projects, equipment and capacity; our expectations
for processing output; the pricing for our compassionate pricing
program and the expected content of future operational
updates. Forward-looking statements should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether, or the times at or
by which, such future performance will be achieved. No assurance
can be given that any events anticipated by the forward-looking
information will transpire or occur. Forward-looking information is
based on information available at the time and/or management's
good-faith belief with respect to future events and are subject to
known or unknown risks, uncertainties, assumptions and other
unpredictable factors, many of which are beyond Zenabis' control.
These risks, uncertainties and assumptions include, but are not
limited to, those described in the shelf prospectus dated
April 9, 2019, a copy of which is
available on SEDAR at www.sedar.com and could cause actual events
or results to differ materially from those projected in any
forward-looking statements. Furthermore, any forward-looking
information with respect to available space for cannabis production
is subject to the qualification that management of Zenabis may
decide not to use all available space for cannabis production, and
the assumptions that any construction or conversion would not be
cost prohibitive, required permits will be obtained and the labour,
materials and equipment necessary to complete such construction or
conversion will be available. Accordingly, readers should not place
undue reliance on the forward-looking statements and information
contained in this news release. Zenabis does not intend, nor
undertake any obligation, to update or revise any forward-looking
information contained in this news release to reflect subsequent
information, events or circumstances or otherwise, except if
required by applicable laws
For more information, visit: https://www.zenabis.com.
SOURCE Zenabis Global Inc.