Sugarbud Craft Growers Corp. (TSXV: SUGR, SUGR.DB, SUGR.WR,
SUGR.WS, SUGR.WT) (OTCQB: SBUDD) ("
Sugarbud" or
the "
Company") is pleased to announce certain
preliminary unaudited financial and operating results for Q4 2021
and provide Management comments regarding the Company’s outlook for
2022.
Q4 2021 Results and Corporate Operating
Update
"2021 was a pivotal year for the Company and our
commercial growth overall as an emerging leader in Canadian Craft
Cannabis. Over the course of our first full year of commercial
operations, we established a strong platform for future profitable
growth through a combination of relentless focus on delighting our
target consumers and an efficient, demand-driven operating model,"
stated Sugarbud CEO John Kondrosky.
2021 Highlights
-
Record Grams Sold | Consistent with previous
guidance, the Company shipped between 120,000 – 140,000 grams of
dried cannabis for Q4 2021 and between 385,000g – 405,000g during
2021; representing a year over year increase of between 530% – 562%
(~385,000g – 405,000g in FY 2021 vs. 61,236g in FY 2020).
-
Record Revenue | Consistent with previous
guidance, the Company achieved strong, double digit, sequential
quarter over quarter growth in Q4, 2021 and realized gross revenue
of between $750,000 – $850,000 for the quarter and full year gross
revenue of between $2,400,000 – $2,500,000; representing a year
over year increase of between 350% – 368% (~$2,400,000 – $2,500,000
in FY 2021 vs. $535,756 in FY 2020).
-
Strong Quarterly Gross Profit | Despite continued
industry-wide price compression, Sugarbud continues to gain
leverage on gross margin through a very disciplined approach to
product pricing, internal cost control and operating
efficiency.
-
Cost Control and Operational Stability | The
Company’s focused and disciplined approach to efficient and
high-quality cultivation continues to gain momentum. The Company
continues to keep general overhead well under control despite
doubling net revenue.
-
Improved Genetic Strength and Cultivation Outcomes
| Sugarbud successfully crossed the 30% potency barrier for the
first time on a commercial batch whilst maintaining critical total
quality attributes such as high terpene profiles. The Company
launched its first commercial 30%+ cultivar - GMO Cookies in late
Q4 2021.
-
Expanded Market Access | Sugarbud received
approval from Health Canada for its amended license permitting the
sale of cannabis extract, edible and topical products in Q3 2021.
Sugarbud is now amongst a handful of craft cannabis LPs able to
directly sell both its dried flower and expanded portfolio of
exceptional craft Cannabis 2.0 products to all authorized
provincial and territorial distributors/retailers as well as
registered medical patients nationwide.
-
Expanded Distribution and Reach | Throughout the
first half of 2021, the Company firmly established clear routes to
all of Canada’s major markets. Sugarbud products are now available
to recreational consumers across 7 provinces and territories –
encompassing over 96% of the established Canadian retail network –
and to registered medical patients nationwide.
-
Product Portfolio Expansion | The Company added 9
new dried flower and 2 new Cannabis 2.0 product SKU’s to the
Sugarbud Craft Cannabis Collection in 2021 including 3 Sugarbud
exclusive cultivars – Mule Fuel, Krypto Chronic #2 and Bahama
Blizzard #11.
We are very encouraged by the commercial
momentum in product sales we saw across every one of our target
markets over the latter half of 2021. We are rapidly establishing a
strong brand identity and reputation as a leader in the Craft
Cannabis space, and we believe that our results to date have us
well-positioned to continue to expand our market share and
accelerate profitable revenue growth in 2022,” added Mr.
Kondrosky.
Independent Analyst Report – Forecasts
$4.75 share price by 2023
READ RESEARCH CAPITAL CORPORATION COVERAGE
HERE
Outlook for 2022 - Catalysts for
Growth
Record Volume and Revenue | The
Company remains on pace to continue the trend of strong sequential
quarter over quarter growth and expects to ship between 140,000 –
160,000 grams of dried cannabis and record gross revenue of between
$850,000 – $1,000,000 in Q1, 2022.
In order to fully realize and accelerate growth
throughout 2022, the Company will continue to leverage existing
operational and commercial capacity for growth by:
-
Building up and around Sugarbud's rapidly growing connection to its
retail partners and consumers to increase the penetration and
adoption of the Company’s existing products in current target
markets.
-
Expanding the size and penetration of the Company’s product
portfolio within major markets including Alberta, British Columbia
and Ontario.
-
Leveraging the quality of its exceptional dried flower portfolio to
expand into complimentary Cannabis 2.0 products; such as
high-terpene, full-flavored solventless extracted inhalable
extracts.
-
Continuing to build product excellence around the Company’s genetic
portfolio and investing in targeted new product and portfolio
development to accelerate growth.
-
Continuing to maintain and adhere to strong financial discipline
and operating controls that management believes will continue to
deliver superior operating results. Instead of focusing on rapid
expansion and scale-up, the Company continues to approach future
scale using a self-sustaining revenue first model - that both
places a priority on a healthy balance sheet and supports
controlled future expansion.
-
Operationally the Company has the existing capacity to achieve its
current business objectives for the balance of 2022, however the
Company does recognize that in order to really be a leader in the
craft cannabis segment, some reasonable amount of scale will be
required. Consequently, Sugarbud maintains an agile and scalable
operating model and has several facility build-out options which it
can quickly deploy as market demand requires. The Company also
continues to actively review opportunities to expand its scale and
reach to consumers through inorganic M&A driven means.
READ WINTER 2022 CORPORATE PRESENTATION HERE
About Sugarbud
"Hand-Crafted Cannabis for a New Era"
Sugarbud is a consumer-driven craft cannabis
company focused on the cultivation and production of superior,
select-batch, craft cannabis products. Our vision and mission are
to become a trusted and well-respected consumer brand renowned for
providing exceptional high-quality craft cannabis products to
legal markets by delighting the most discerning of cannabis
consumers.
The Sugarbud Craft Cannabis Collection offers
consumers "Hand-Crafted Cannabis for a New Era". The Company is
proudly Albertan and is proud to share Western Canada's long
tradition of exceptional craft cannabis with the most discerning of
enthusiasts. Sugarbud strives to define the intersection of product
craftsmanship, quality, and value for consumers in the Canadian
craft cannabis space.
Sugarbud Craft Cannabis products are currently
available to adult recreational consumers in the Yukon Territory,
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and
nationally to registered medical patients through MendoCannabis.ca.
Sugarbud products are also distributed in the Province of Quebec
through ROSE LifeScience Inc.’s ("ROSE") pursuant
to a previously announced Sales, Marketing, Supply and Distribution
Agreement between ROSE and the Company.
We Take Pride.
We Take Our Time.
Experience The Difference.
CONTACTS: |
John Kondrosky Chief Executive
Officer Sugarbud Craft Growers Corp. Phone: (604) 499-7847
E-mail: johnk@sugarbud.caInvestor
Relations ContactChris
MoulsonChief Financial OfficerSugarbud
Craft Growers Corp.Tel: (778) 388-8700E-mail:
chrism@sugarbud.ca |
Websites:http://www.sugarbud.ca/http://craftcannabiscollection.ca
Forward Looking and Cautionary Statements This
news release contains forward-looking statements. More
particularly, and without limitation, this news release contains
statements concerning: Sugarbud's assessment of future plans,
operations and cannabis cultivation and processing, including
sales, marketing and distribution opportunities; product quality;
the development, production, sale and distribution of Sugarbud's
Craft Cannabis Collection, including new product lines and the
properties, characteristics and launch timing thereof; the expected
timing of retail availability of new products, including in the
Province of Ontario; future growth; and customer satisfaction. When
used in this document, the words "will," "anticipate," "believe,"
"estimate," "expect," "intent," "may," "project," "should," and
similar expressions are intended to be among the statements that
identify forward-looking statements. The forward-looking statements
are founded on the basis of expectations and assumptions made by
Sugarbud. Forward-looking statements are subject to a wide range of
risks and uncertainties, and although Sugarbud believes that the
expectations represented by such forward-looking statements are
reasonable, there can be no assurance that such expectations will
be realized. Any number of important factors could cause actual
results to differ materially from those in the forward-looking
statements including, but not limited to: currently contemplated
expansion and development plans may cease or otherwise change;
production of cannabis may be lower than expected; ability to ship
cannabis products may be lower than expected; demand for Sugarbud's
products may be lower than anticipated; results of production and
sale activities; results of scientific research; changes in prices
and costs of inputs; demand for labour; demand for products;
failure of counter-parties to perform contractual obligations;
failure to maintain consumer brand recognition and loyalty of
customers; reliance on relationships with wholesalers and retailers
for distribution of products and failure to maintain strategic
business relationships; intense competition, including from illicit
sources; uncertainty and continued evolution of markets; product
liability litigation; reliance on information technology;
infringement on intellectual property; failure to benefit from
partnerships; sensitivity of end-customers to increased sales taxes
and economic conditions; failure to comply with certain
regulations; departure of key management personnel or inability to
attract and retain talent; actions and initiatives of federal and
provincial governments and changes to government actions,
initiatives and policies and the execution and impact thereof; the
ability to implement corporate strategies; the state of domestic
capital markets; the ability to obtain financing; changes in
general market conditions; industry conditions and events; the size
of the medical marijuana market and the recreational marijuana
market; government regulations, including future legislative and
regulatory developments involving medical and recreational
marijuana; construction delays; risks inherent in the agricultural
business, such as insects, plant diseases and similar agricultural
risks which can have a significant impact on the size and quality
of the harvest of cannabis crops; competition from other industry
participants; and other factors more fully described from time to
time in the reports and filings made by Sugarbud with securities
regulatory authorities. In addition, the Company cautions that
current global uncertainty with respect to the spread of the
COVID-19 virus, and variant strains of the virus, and its effect on
the broader global economy may continue to have a significant
negative effect on the Company. While the precise impact of the
COVID-19 virus on the Company remain unknown, rapid spread of the
COVID-19 virus may continue to have a material adverse effect on
global economic activity and can result in volatility and
disruption to global supply chains, operations, mobility of people
and the financial markets, which could affect interest rates,
credit ratings, credit risk, inflation, business, financial
conditions, results of operations and other factors relevant to the
Company. Please refer to Sugarbud's most recent annual information
form and management's discussion and analysis for additional risk
factors relating to Sugarbud, which can be accessed under
Sugarbud's profile on www.sedar.com. Except as required by
applicable laws, Sugarbud does not undertake any obligation to
publicly update or revise any forward-looking statements.
Unaudited Financial Information. Certain
financial and operating results included in this press release,
including shipping volumes, growth and revenue, are based on
unaudited estimated results. These estimated results are subject to
change upon completion of the Company’s audited financial
statements for the year ended December 31, 2021, and changes could
be material.
Neither the TSXV nor its regulation services provider
(as that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
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