WINNIPEG, April 22, 2019 /CNW/ - DELTA 9 CANNABIS INC.
(TSXV: NINE) (OTCQX: VRNDF) ("Delta 9" or the "Company"), is
pleased to announce financial and operating results for the year
ending December 31, 2018.
2018 Year End Financial Highlights
- Record operating revenues of $7.57M for the year ending December 31, 2018, up 702%, from $944,114 for the year ending December 31, 2017
- Record gross profit of $5.74M for
the year ending December 31, 2018, up
1,200%, from $442,681 for the year
ending December 31, 2017
- Net income was a loss of $8.61M
for the year ending December 31,
2018, primarily as a result of expanding operations in
advance of legalization of recreational use cannabis in the fourth
quarter of 2018.
- The Company reported a strong financial position, with working
capital of $20.7M and total assets of
$46.0M, having raised over
$30.7M in debt and equity during the
year.
4th Quarter, 2018 Versus 3rd Quarter, 2018 Results
- Record operating revenues of $5.27M for the three-month period ending
December 31, 2018, up 321%, from
$1.25M for the three-month period
ending September 30, 2018.
- Record gross profit of $3.34M for
the three-month period ending December 31,
2018, up 118%, from $1.53M for
the three-month period ending September 31,
2018.
- Prudent cost management narrowed quarterly loss to $2.17M ($0.02 per
share) for the three-month period ending December 31, 2018 versus a loss of $2.23M ($0.03 per
share) for the three-month period ending September 30, 2018.
Operational Highlights
- 2018 expansion increased the number of Delta 9 grow pods
approved by Health Canada to 154 from 15, increasing anticipated
annual production capacity to over 4,200 Kg of dried cannabis
flower.
- Delta 9 announced its intention to become a preferred supplier
of medical cannabis to Pharmasave, a national pharmacy chain with
approximately 650 retail outlets.
- Delta 9 entered into a supply agreement for 2.3M grams of cannabis with the Province of
Manitoba.
- Delta 9 entered into an agreement to supply 1,000 Kg of
cannabis per year for 10 years to Auxly Cannabis Group Inc.
- Delta 9 now operates three retail stores, two in Winnipeg, Manitoba and one in Brandon, Manitoba. A fourth retail store in
Thompson, Manitoba is scheduled to
open in June, 2019.
"2018 was a transformation year for Delta 9 as we proved our
business model of using retrofitted shipping containers (Grow Pods)
to grow cannabis successfully and produced a consistent
high-quality cannabis product," said John
Arbuthnot, CEO. "Our strategy of being one of Canada's only vertically integrated cannabis
companies with licences for production, processing, distribution
and retail operations is paying off and now producing significant
financial results. The legalization of the adult consumer
recreational market in October last year is only the beginning of
many new and exciting opportunities for the Company."
Selected Annual Information:
|
Consolidated
Statement of Net Loss
|
2018
|
2017
|
|
Revenue
|
$7,569,283
|
$944,114
|
|
Cost of
Sales
|
5,558,066
|
627,376
|
|
Gross Profit Before
Unrealized Gain from Changes In Biological Assets
|
2,011,217
|
316,738
|
|
Unrealized gain from
changes in fair value of biological assets
|
3,727,595
|
125,943
|
|
Gross
Profit
|
$5,738,812
|
$442,681
|
|
|
|
|
Expenses
|
|
|
|
General and
Administrative
|
10,566,669
|
2,514,621
|
|
Sales and
Marketing
|
1,069,014
|
383,797
|
|
Share based
Compensation
|
2,622,228
|
257,189
|
|
Total Operating
Expenses
|
$14,257,911
|
$3,155,607
|
|
|
|
|
Loss from
Operations
|
$(8,500,997)
|
$(2,712,926)
|
|
|
|
|
Other Income/
Expenses
|
|
|
|
Other Income/
Expenses (Other Income, Rental Income, Disposal of
Assets)
|
(84,228)
|
7,751
|
|
Public Listing
Costs
|
0
|
(5,219,055)
|
|
|
|
|
Net
Loss and Comprehensive Loss
|
$(8,608,350)
|
$(7,924,230)
|
|
|
|
|
Loss per Share
(basic)
|
$(0.10)
|
$(0.16)
|
|
Weighted average
number of shares outstanding
|
81,277,702
|
48,732,913
|
|
Consolidated
Statement of Financial Position
|
2018
|
2017
|
|
Current
Assets
|
$26,394,143
|
$24,760,610
|
|
Property, Plant, and
Equipment
|
16,839,328
|
275,192
|
|
Total
Assets
|
$45,992,471
|
$25,035,802
|
|
|
|
|
Current
Liabilities
|
$5,689,300
|
$479,404
|
|
Long Term
Liabilities
|
4,940,836
|
0
|
|
Total
Liabilities
|
$10,630,135
|
$479,404
|
|
|
|
|
Shareholder
Equity/ (Deficiency)
|
$35,362,336
|
$24,556,398
|
Summary of Quarterly Results:
|
Consolidated
Statement of Net Loss
|
Q4
2018
|
Q3
2018
|
Q2
2018
|
Q1
2018
|
|
Revenue
|
$5,270,217
|
$1,251,213
|
$715,746
|
$332,107
|
|
Cost of
Sales
|
$4,015,644
|
$938,733
|
$380,520
|
$223,169
|
|
Gross Profit Before
Unrealized Gain From Changes In Biological Assets
|
$1,254,573
|
$312,480
|
$335,226
|
$108,938
|
|
Unrealized gain from
changes in fair value of biological assets
|
$2,087,367
|
$1,218,257
|
$328,214
|
$93,757
|
|
Gross Profit
(Loss)
|
$3,341,940
|
$1,530,737
|
$663,440
|
$202,695
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
General and
Administrative
|
$4,323,796
|
$2,790,227
|
$2,064,333
|
$1,388,313
|
|
Sales and
Marketing
|
$379,898
|
$300,138
|
$265,332
|
$123,646
|
|
Share Based
Compensation
|
$807,834
|
$671,606
|
$521,598
|
$621,190
|
|
Total Operating
Expenses
|
$5,511,528
|
$3,761,971
|
$2,851,263
|
$2,133,149
|
|
|
|
|
|
|
Income (Loss) from
Operations
|
$(2,169,588)
|
$(2,231,234)
|
$(2,187,823)
|
$(1,930,454)
|
|
Basic and Diluted
Earnings (Loss) Per Share
|
$(0.02)
|
$(0.03)
|
$(0.03)
|
$(0.02)
|
|
Consolidated
Statement of Net Loss
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
Q1
2017
|
|
Revenue
|
$302,284
|
$303,877
|
$190,099
|
$147,854
|
|
Cost of
Sales
|
$42,137
|
$269,815
|
$155,354
|
$159,970
|
|
Gross Profit Before
Unrealized Gain From Changes In Biological Assets
|
$260,147
|
$34,062
|
$34,745
|
$(12,116)
|
|
Unrealized gain from
changes in fair value of biological assets
|
-
|
-
|
$208,850
|
$43,578
|
|
Gross Profit
(Loss)
|
$260,147
|
$34,062
|
$243,595
|
$31,462
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
General and
Administrative
|
$908,458
|
$689,612
|
$1,207,954
|
$385,225
|
|
Sales and
Marketing
|
$133,893
|
$69,309
|
$108,797
|
$71,798
|
|
Share Based
Compensation
|
-
|
-
|
-
|
-
|
|
Total Operating
Expenses
|
$1,042,351
|
$758,921
|
$1,316,751
|
$457,023
|
|
|
|
|
|
|
Income (Loss) from
Operations
|
$(782,204)
|
$(716,015)
|
$(1,073,156)
|
$(425,561)
|
|
Basic and Diluted
Earnings (Loss) Per Share
|
$(0.01)
|
$(0.02)
|
$(0.02)
|
$(0.01)
|
A comprehensive discussion of Delta 9's financial position and
results of operations is provided in the Company's Management
Discussion & Analysis for the year ended December 31, 2018 filed on SEDAR and can be found
at www.sedar.com.
Year-End Results 2018 Conference Call
Delta 9 has scheduled a conference call to discuss the results
for its fourth quarter and year ended December 31, 2018. The
conference call will be hosted April 23,
2018 at 9:00 a.m. Eastern Time by John
Arbuthnot, Chief Executive Officer, and Jim Lawson, Chief Financial Officer, followed by
a question and answer period.
|
Date
|
April 23,
2019
|
|
Time
|
9:00 EST
|
|
Dial in #
|
1-888-886-7786 - Toll
free North America
|
|
Conference
ID:
|
30846572
|
|
|
|
Replay
information:
|
1-877-674-6060
|
|
Replay
Password
|
846572#
|
|
Available until July
23, 2019
|
About Delta 9 Cannabis Inc.
Delta 9 Cannabis Inc. is a vertically integrated cannabis
company focused on bringing the highest quality cannabis products
to market. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech
Inc., is a licensed producer of medical and recreational cannabis
and operates an 80,000 square foot production facility
in Winnipeg, Manitoba,
Canada. Delta 9 owns and operates a chain of retail stores
under the Delta 9 Cannabis Store brand. Delta 9's shares trade on
the TSX Venture Exchange under the symbol "NINE" and on the OTCQX
under the symbol VRNDF. For more information, please visit
www.delta9.ca.
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.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the Company's future business plans and other matters.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. Forward
looking statements in this news release include statements relating
to: (i) increases in Delta 9's cannabis
production capacity; (ii) Delta 9's intentions to
supply cannabis; and (iii) Delta 9's retail store expansion.
Such statements are subject to risks and uncertainties that may
cause actual results, performance or developments to differ
materially from those contained in the statements,
including the Company's actual financial results being
different from its estimates as well as all risk
factors set forth in the annual information form of Delta 9
dated May 31, 2018 which has been filed on SEDAR. No
assurance can be given that any of the events anticipated by the
forward-looking statements will occur or, if they do occur, what
benefits the Company will obtain from them. Readers are urged to
consider these factors carefully in evaluating the forward-looking
statements contained in this news release and are cautioned not to
place undue reliance on such forward-looking statements, which are
qualified in their entirety by these cautionary statements. These
forward-looking statements are made as of the date hereof and the
Company disclaims any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
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SOURCE Delta 9 Cannabis Inc.