CALGARY, Jan. 2, 2020 /CNW/ - Westleaf Inc. (the
"Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) and
its newly acquired wholly-owned subsidiary We Grow B.C. Ltd.
("We Grow"), released today the We Grow unaudited third
quarter financial results for the fiscal year 2019, for the three
and nine month interim period ending September 30, 2019. We Grow's unaudited condensed
interim consolidated financial statements ("Financial
Statements") for the three and nine months ended September 30, 2019 and related Management
Discussion and Analysis ("MD&A") for the reporting
period are available under the Company's profile at
www.sedar.com.
Q3 2019 Financial Highlights:
- Net revenues of $4.4 million for
the nine months ended September 30,
2019, including net revenues of $2.7
million for the three months ended September 30, 2019, an increase from $nil net
revenues for the three and nine months ended September 30, 2018. Net revenues reflect a record
revenue quarter for We Grow with increasing demand for
Qwest-branded cannabis products in British Columbia, Alberta, Saskatchewan, Ontario and Prince
Edward Island.
- Adjusted EBITDA of $0.8 million
for the three months ended September 30,
2019, representing We Grow's first quarter of positive
Adjusted EBITDA, driven by strong wholesale pricing of
Qwest-branded cannabis products on a per gram basis, and
disciplined control of production costs and corporate expenses. See
"Non-GAAP Measures" below.
- Net comprehensive loss of $0.5
million for the nine months ended September 30, 2019, including a net comprehensive
loss of $0.4 million for the three
months ended September 30, 2019, a
decrease from the net comprehensive loss of $2.6 million for the nine months ended
September 30, 2018, and $0.8 million for the three months ended
September 30, 2018.
Highlights Subsequent to Quarter End:
- On December 23, Westleaf and We
Grow announced the completion of a plan of arrangement under
Division 5 of Part 9 of the Business Corporations Act
(British Columbia) involving
Westleaf and We Grow and certain security holders of We Grow (the
"Arrangement").
- Concurrently with the Arrangement, We Grow completed a
non-brokered management and key stakeholder led private placement
financing of subscription receipts of We Grow ("Subscription
Receipts") for gross proceeds of $1,788,206.91 at a price of $0.21 per Subscription Receipt. Each Subscription
Receipt entitled the holder thereof to acquire one We Grow Class
"C" Voting Participating Share ("We Grow Class C Share") and
one-half warrant to purchase a We Grow Class C Share (each whole
warrant, a "We Grow Warrant"), and each We Grow Class C
Share was exchanged for one common share in the capital of Westleaf
("Westleaf Share") and each whole We Grow Warrant was
exchanged for one warrant to purchase a Westleaf Share
("Westleaf Warrant") under the Arrangement. Each Westleaf
Warrant is exercisable at a price of $0.28 per Westleaf Share for a period of two
years following the closing of the Arrangement.
"We are pleased to report We Grow's first quarter of positive
Adjusted EBITDA, resulting from the strength and growth of the
Qwest and Qwest Reserve brand, reaffirming our strategy to serve
the ultra-premium cannabis market in Canada" states Benjamin Sze, Chief Executive Officer of We Grow
and Westleaf. "Going forward we anticipate integrating the Qwest
brand within the Westleaf portfolio of assets to create value for
our shareholders and stakeholders".
About Westleaf Inc.
Westleaf is a Canadian cannabis company focused on cannabis
brands, extraction and production of derivatives, wholly owned
retail, as well as cannabis cultivation. Westleaf's extraction and
processing facility, The Plant, will produce high
quality and consistent cannabis derivatives and consumables, both
for Westleaf's in-house brands as well as white label products.
Westleaf's retail concept, Prairie Records, leverages the
instinctual tie between recreational cannabis and music with stores
operating or in development across Western Canada. Westleaf's
Thunderchild cultivation facility is expected to be completed in
Q1, 2020. http://www.westleaf.com
We Grow's cultivation facility is located in Creston,
British Columbia in the heart of the Kootenays, where BC grown
marijuana originated, and holds cannabis cultivation, processing
and sales licenses pursuant to the applicable regulations of the
Cannabis Act. We Grow has scalable production facilities currently
consisting of 26,000 square feet retrofitted for phase 1
cultivation including over 14,000 square feet of growing rooms and
up to 100-acre cultivation abilities for future production. We
Grow's cannabis production includes its brand Qwest, which is
considered a preeminent luxury cannabis brand achieving one of the
highest realized flower prices in Canada.
Non-GAAP Measures
This news release contains the financial performance metric of
Adjusted EBITDA, a measure that is not recognized or defined under
IFRS ("Non-GAAP Measures"). As a result, this data may not
be comparable to data presented by other cannabis companies. For an
explanation and reconciliation of Adjusted EBITDA to related
comparable financial information presented in the Financial
Statements prepared in accordance with IFRS, refer to the section
"Highlights for the three and nine months ended September 30, 2019" in the MD&A for the three
and nine months ended September 30,
2019. The Company believes that Adjusted EBITDA is a useful
indicator of operating performance and is specifically used by
management to assess the financial and operational performance of
the Company.
We Grow defines Adjusted EBITDA as net income or loss, excluding
fair value changes on growth of biological assets, realized fair
value changes on inventory sold or impaired, amortization,
depreciation and accretion expense, share based payments, finance
expense and income taxes. Non-GAAP Measures should be considered
together with other financial information prepared in accordance
with IFRS to enable investors to evaluate the We Grow's operating
results, underlying performance and prospects in a manner similar
to We Grow's management.
Accordingly, these Non-GAAP Measures are intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
Notice of No Auditor Review
We Grow's unaudited condensed interim consolidated Financial
Statements for the three and nine months ended September 30, 2019 have been prepared by and are
the responsibility of We Grow's management.
We Grow's independent auditor has not performed a review of
these unaudited condensed interim consolidated financial statements
in accordance with standards established by the CPA Canada for a
review of interim financial statements by an entity's auditor.
Neither 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.
Cautionary Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that involves discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always
using phrases such as "expects", or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements. In this news release, forward-looking statements relate
to, among other things, the integration of the businesses of
Westleaf and We Grow; the construction and expansion of the
Company's production facilities; the timing for completion of same
and commencement of production at the Company's production
facilities; and future production capacity. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable, are subject to known
and unknown risks, uncertainties, and other factors which may cause
the actual results and future events to differ materially from
those expressed or implied by such forward-looking
statements. Such factors include, but are not limited to:
risks relating to the ability to obtain or maintain licences to
retail cannabis products; review of the Company's production
facilities by Health Canada and receipt or maintenance of licences
from Health Canada in respect thereof; 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; general business, economic, competitive, political and
social uncertainties; the satisfaction of conditions precedent
under the Company's credit facilities; timing and completion of
construction and expansion of the Company's production facilities
and retail locations; and the delay or failure to receive board,
regulatory or other approvals, including any approvals of the TSXV,
as applicable. There can be no assurance that such statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news
release. Except as required by law, the Company assumes no
obligation to update the forward-looking statements of beliefs,
opinions, projections, or other factors, should they change, except
as required by law.
SOURCE Westleaf Inc.