TORONTO, Nov. 14, 2019 /PRNewswire/ - The Green
Organic Dutchman Holdings Ltd. (the "Company" or "TGOD") (TSX:
TGOD) (US: TGODF) is pleased to report its financial and
operational results for the three and nine months ended
September 30, 2019. These filings are
available for review on the Company's SEDAR profile at
www.sedar.com.
Third Quarter Business Highlights
The Company:
- Continued construction of its Ancaster and Valleyfield facilities, investing $104 million in capital expenditures during the
quarter. Unveiled its new construction and operating plan in
October 2019, with the most
significant change involving demarcating the Valleyfield construction plan into smaller
phases while maintaining the optionality to quickly expand
production as the market develops. Valleyfield Phase 1 consists of
six zones and its production will be shipped to Ancaster for processing.
- Completed and commissioned its 20,000 square foot Phase 2
indoor cultivation facility at Ancaster and started growing operations within
the state-of-the-art facility.
- Substantially completed the 101,000 square foot Ancaster hybrid greenhouse shortly after the
quarter's end, in October 2019.
- Experienced a net loss of $20.1
million for Q3-2019, of which $4.3
million was related to non-cash stock-based compensation,
depreciation and amortization. As part of the revised strategic
plan, the Company has reorganized to reduce general and
administrative expenses by approximately $3
million per quarter starting in Q1-2020 on a path towards
positive operating cash flow by the end of Q2 2020.
- Entered the recreational market with a small pilot in
Ontario, bringing total Canadian
sales to $0.6M. The Company is
scaling production in the aforementioned grow spaces to be able to
fully supply the OCS and other cannabis boards on a consistent
basis and prepare for the launch of the first wave of its Cannabis
2.0 product portfolio at the end of Q4 2019.
- HemPoland, its wholly owned subsidiary, saw a decrease in
revenues to $2 million from
$2.9 million in Q2 2019 due to fewer
low margin bulk CBD extract sales. However, the Company saw an
increased number of sales of its high margin branded CannabiGold
and private label products, resulting in gross margin of 80%, up
from 69%. The Company has updated product formulations to penetrate
new European markets and leverage the brand initiatives already in
progress to ensure long-term profitability.
Other key updates in the quarter
The Company:
- Received approval from Health Canada to expand operations at
its Ancaster Facility into its 101,000 square foot hybrid
greenhouse. Plants are expected to be harvested from the first
rooms by the end of Q4 2019 for sales into Q1 2020. Subsequent to
September 30, 2019, the Company also
obtained its amended Health Canada licence allowing it to sell
cannabis extracts, topicals and edibles.
- Announced positive results from a pharmacokinetic study
performed in conjunction with Caliper Foods, showing promise for
the Company's commercialization plans for cannabinoid dissolvables
in Canada beginning in
December 2019 under the TGOD-Infusers
line of premium cannabis products.
- Subsequent to the quarter, the Company announced that it signed
arrangements for up to $103 million
in funding to be used mainly as bridge financing until TGOD becomes
cash flow positive which is expected by the end of Q2 2020.
Investor conference call to discuss third quarter
results
Management will host a conference
call tomorrow at 9:00 am Eastern Time to discuss the results.
Participants may access the call by dialing 416-764-8688
(Toronto) or 1-888-390-0546
(North America); Conference ID
46182744. For those unable to participate on the live call, a
playback will be available for one week after the conference call
using this URL:
https://event.on24.com/wcc/r/2130238/DA83D527E6EA60E9F6B1265453F32E1C
Management Commentary
"Q3 marked TGOD's entry into the recreational cannabis market
with a small pilot in Ontario. We
were thrilled to witness such positive feedback on product quality
and packaging from retailers and consumers across the
province. Based on the initial response, demand for
high-quality flower is strong and TGOD is well positioned to
capture the premium organic segment which is significantly
underserved," commented Brian
Athaide, CEO of TGOD. "Despite the challenging market
conditions in Canada, TGOD has an
opportunity to be one of the first cash flow positive cannabis
companies as early as Q2 2020. We rightsized our production and our
first hybrid greenhouse is being commissioned, allowing us to
produce at optimal levels while avoiding excess inventory or
incurring unnecessarily high operating expenses. Our first
harvest from the Ancaster hybrid
greenhouse is expected in December, which will enhance our current
product line and enable TGOD's first material revenues in
Canada in Q1 2020 which is very
exciting," continued Athaide.
ABOUT THE GREEN ORGANIC DUTCHMAN HOLDINGS LTD.
The
Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (US-OTC: TGODF) is
a premium certified organic cannabis company focused on the health
and wellness market. Its certified-organic cannabis is grown
in living soil, as nature intended. The Company is committed
to cultivating a better tomorrow by producing its products
responsibly, with less waste and impact on the environment. Its two
Canadian facilities are built to LEED certification standards and
its products are sold in recyclable packaging. In
Canada, TGOD plans to expand its
product portfolio by launching a series of next-generation cannabis
products such as organic teas, infusers and vapes. Through its
European subsidiary, HemPoland, the Company also distributes
premium hemp CBD oil in Europe. By
leveraging science and technology, TGOD harnesses the power of
nature from seed to sale.
TGOD's Common Shares and warrants issued under the indenture
dated November 1, 2017 trade on the
TSX under the symbol "TGOD" and "TGOD.WT", respectively.
For more information on The Green Organic Dutchman Holdings
Ltd., please visit www.tgod.ca.
Forward-Looking Information Cautionary Statement
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"). Forward looking
statements in this release includes, but is not limited to,
statements about future facility construction, statements about
future revenue and margins, statements about production timing,
efficiencies, capacities and ramp-up, statements about future
production, statements about achievement of positive cash flow and
value for shareholders, statements about reduction in
administrative expenses, statements about the offering of any
particular products by the Company in any jurisdiction and
statements regarding the future performance of the Company.
Forward-looking statements are frequently characterized by words
such as "plan", "continue", "expect", "project", "intend",
"believe", "anticipate", "estimate", "may", "will", "potential",
"proposed" and other similar words, or statements that certain
events or conditions "may" or "will" occur. These statements are
only predictions. Various assumptions were used in drawing the
conclusions or making the projections contained in the
forward-looking statements throughout this news release.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made and are subject
to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from
those projected in the forward-looking statements. The Company is
under no obligation, and expressly disclaims any intention or
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable law.
Neither TSX nor its Regulation Services Provider (as that
term is defined in the policies of Toronto Stock Exchange) accept
responsibility for the adequacy or accuracy of this
release.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/the-green-organic-dutchman-reports-q3-2019-results-300958868.html
SOURCE The Green Organic Dutchman Holdings Ltd.