TORONTO, May 01, 2019 (GLOBE NEWSWIRE) -- WeedMD Inc. (TSX-V:WMD) (OTCQX:WDDMF) (FSE:4WE) (“WeedMD” or the “Company”), a federally-licensed producer and distributor of medical-grade cannabis, is pleased to report its financial results for the fourth quarter and fiscal year ending December 31, 2018.
WeedMD reports revenues of $8.2M in its second year of operations representing a year-over-year increase of 465%. Revenues were driven by a combination of increased cannabis sales to medical patients, supply agreements for Canada’s adult-use market in addition to the sale of wholesale cannabis and genetics to other licensed producers. The Company is well financed with a strong cash balance of $21.2M as of December 31, 2018.
| For the years ended December 31 | 2018 | 2017 | |||
| ($) | ($) | ||||
| Revenue | 8,203,273 | 1,451,062 | |||
| Net and Comprehensive Loss | (895,128) | (8,805,222) | |||
| Adjusted Operating Loss* | (11,737,061) | (7,042,047) | |||
| Cash Used from Operations | (615,514) | (2,986,928) | |||
| Earnings (Loss) per Share (Basic and Fully Diluted) | (0.01) | (0.15) | |||
| As at | December 31, 2018 | December 31, 2017 | |||
| ($) | ($) | ||||
| Cash and Cash Equivalents | 21,223,641 | 24,695,152 | |||
| Total Assets | 88,068,657 | 39,605,187 | |||
| Total Liabilities | 10,976,340 | 14,472,639 | |||
| Working Capital | 29,838,984 | 25,713,807 | |||
| *Adjusted Operating Loss is not a recognized measurement under IFRS and this data may not be comparable to data presented by other companies. Management believes Adjusted Operating Loss to be an important measure of the Company’s day-to-day operations, by excluding non-cash gains and losses and/or non-recurring items. | |||||
Corporate Highlights Fiscal Year 2018
Corporate Milestones
- closed a $34.5M bought deal equity financing
- entered into a joint venture with Phivida Holdings Inc. (CSE:VIDA) to manufacture and produce cannabis-infused beverages
- completed strategic partnership with TruTrace Technologies Inc. (TSXV:TTT) (formerly Blockstrain Technology Corp.)
- interlisted on OTCQX® Best Market and secured Depository Trust Company (“DTC”) eligibility and commenced trading under the ticker symbol (OTXQX:WDDMF)
Production-Related Milestones
- completed the retrofit and licensing of Phase I, initial 44,000 square feet of the Strathroy greenhouse in June 2018, with successful initial harvest in September 2018
- secured a Health Canada sales licence for its Strathroy greenhouse
- obtained approval from Health Canada for six additional 10,000 sq. ft. rooms at Strathroy greenhouse in December 2018, with first harvests beginning in March 2019
Sales, Marketing & Business Development Milestones
- commenced sales of cannabis oil products under Entourage and Axis brands
- registered WeedMD’s strains under a comprehensive cannabis genetics archiving platform as the pilot for TruTrace’s cannabis validation program
- executed supply arrangements with four provinces and completed first shipments to Ontario Cannabis Retail Corporation (“OCRC”) - operating as the Ontario Cannabis Store (“OCS”), Alberta Gaming, Liquor & Cannabis Commission (“AGLC”), British Columbia Liquor Distribution Branch (“BCLDB”), Nova Scotia Liquor Corporation (“NSLC”)
- exported our world-class cannabis genetics internationally to both Australia and Israel
- announced a retail sales distribution agreement with Lifford Cannabis Solutions, led by cannabis advocate, influencer and media personality Lisa Campbell, for British Columbia and Alberta
- entered into an agreement to become a medical cannabis supplier to Shoppers Drug Mart
- delivered first shipments of WeedMD-branded cannabis for the launch of adult-use market on October 17, 2018
Key Leadership Appointments
- appointed Keith Merker as CEO (formerly CFO)
- appointed Kevin McGovern, Chairman of McGovern Capital and founder of the beverage company SoBe, the fastest growing beverage company in the US as Board Director
- appointed Dr. Jonas Vanderzwan, a physician with more than 15 years of primary care experience as Medical Director and Chair of the Clinical Advisory Board
- appointed Michael Pesner, President of Hermitage Canada Finance Inc. and previously partner at KPMG for 26 years, as Board Director and Chair of Audit Committee
- expanded senior leadership team with the following hires in 2018:
° Nichola Thompson, CFO (interim CFO in 2018, affirmed as CFO April 2019)
° Josephine DesLauriers, Senior Vice President, People
° Brett Moon, Senior Vice President, Sales & Marketing
° Marianella delaBarrera, Vice President, Communications & Corporate Affairs
° Derek Pedro, Chief Cannabis Officer (announced in March 2019)
° Alex Sibilev, Vice President, Compliance and Global Regulatory Affairs (announced in March 2019)
Subsequent Events
- announced outdoor cannabis cultivation at its licensed 98-acre Strathroy Property
- submitted an amendment to existing licence to include initial Phase I, 25-acre outdoor grow
- entered into a $39M debt facility with BMO and purchased the 98-acre Strathroy property including indoor greenhouse, land and infrastructure
- purchased 60 acres of land directly adjacent to Strathroy property for outdoor cultivation for up to 110 acres or more than 100,000 kgs by 2020
- secured Health Canada Standard Processing Licence for Strathroy facility
- announced partnership with Pita Pit to launch Pioneer Cannabis Co. (“Pioneer”), a retail cannabis platform for Ontario and rest of Canada
- secured approval to supply cannabis to two further provinces - Manitoba Liquor & Lotteries Corporation (“MBLL”) and Saskatchewan Liquor & Gaming Authority (“SLGA”)
- Pioneer signed agreement with Ontario cannabis retail lottery winner and operator to open its first store in Burlington, Ontario
- expanded corporate footprint with offices in downtown Toronto and London, Ontario to drive commercial growth
Greenhouse Construction Timetable
The ramp up of the Strathroy facility continues on schedule as follows:
- as of December 31, 2018, the Company had secured cultivation licences for Phase 1 and Phase II, providing 110,000 sq. ft. of production space with 10 hybrid-greenhouse cultivation rooms, including clone and vegetation rooms, in full cultivation
- submitted an amendment to Strathroy licence for Phase III of its expansion, including licensing an additional 10 rooms, or 110,000 sq. ft. of production space, expecting to begin cultivation in June 2019
- anticipates completion of Phase IV construction of two large greenhouse rooms by end of Q2-2019, adding a further 308,000 sq. ft. of cultivation capacity and planning to plant and harvest in 2019
- on March 27, 2019, announced plans to launch outdoor cultivation on its 98-acre Strathroy property with plans to grow on 27 acres of workable land to be planted in June and harvested in Fall 2019 and an additional 23 acres in 2020
- on April 10, 2019, subsequently announced the purchase of an additional 60 acres of adjacent land bringing total planned outdoor cultivation space to more than 100 acres or 100,000 kgs in 2020
Strathroy Cultivation Expansion & 2019 Harvest Schedule
| Indoor | Production Type | Expected Construction Completion | Licence Issue Date (or expected) | Production Space (Sq Ft) | Measurement | # of Rooms | Licences |
| Phase 1 | Hybrid GH | Complete | June 2018 | 44,000 | Sq Ft | 4 | Cultivation, Sale |
| Phase 2 | Hybrid GH | Complete | December 2018 | 66,000 | Sq Ft | 6 | Cultivation, Sale |
| Phase 3 | Hybrid GH | March 2019 | June 2019 (expected) | 110,000 | Sq Ft | 10 | Amendment submitted |
| Phase 4 | Standard GH | June 2019 | Q3 2019 (expected) | 308,000 | Sq Ft | 2 | Amendment to existing licence |
| Total Indoor | 528,000 | 22 | |||||
| Outdoor | Expected Construction Completion | Licence Issue Date (or expected) | Cultivation Space (Sq Ft) | Cultivation Space (Acres) | Cultivation Zones | Licences | |
| Phase 1 | Outdoor | May 2019 | June 2019 (expected) | 1,100,000 | 27 | 1 | Amendment to existing licence |
| Phase 2 | Outdoor | Q2 2020 | Q2 2020 (expected) | 3,200,000 | 73 | 3 | Amendment to existing licence |
| Total Outdoor | 4,300,000 | 100 | 4 | ||||
| Consolidated | 4,828,000 | 112 | |||||
“Our team achieved a number of key milestones in 2018 as we rapidly built out and licensed our industry-leading production platform in record time to address the onset of the adult-use market. We signed key supply agreements with six provinces and added Shoppers Drug Mart to our distribution network. With our focus on operational excellence, we added key members to round out a formidable leadership team,” said Keith Merker, CEO of WeedMD. “Our solid base of operations and rapidly expanding production platforms sets the pace for completing our build out this year. With our greenhouse and outdoor platforms, WeedMD is well-positioned for very significant organic growth in 2019. We look forward to taking WeedMD to the next level with the launch of new brands, the roll out of new products, the build out of an international presence in addition to expanding our extraction and processing operations whilst exploring M&A opportunities to drive shareholder value.”
The Company’s financial statements and related management’s discussion and analysis for the period are available under the Company’s profile on SEDAR at www.sedar.com. All amounts are expressed in Canadian dollars and are in accordance with International Financial Reporting Standards unless otherwise noted.
For more information, access WeedMD’s investor presentation here and recently updated corporate video here.
About WeedMD Inc.
WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer and distributor of cannabis products for both the medical and adult-use markets. The Company owns and operates two facilities: a 26,000 sq. ft. indoor facility in Aylmer, Ontario and a 158-acre state-of-the-art greenhouse and outdoor facility located in Strathroy, Ontario. The Company currently has 136,000 square feet of licensed production space across its facilities and is expected to have a total footprint of more than 550,000 square feet of indoor and greenhouse production in addition to more than 25 acres of outdoor cultivation space online in the first half of 2019. WeedMD has a multi-channeled distribution strategy that includes selling directly to medical patients, strategic relationships across the seniors’ market and supply agreements with Shoppers Drug Mart as well as six provincial distribution agencies.
Follow WeedMD On:
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For further information, please contact:
WeedMD Inc.
Keith Merker, Chief Executive Officer
Tel: 519-765-2440 Ext. 201
Email: investor@weedmd.com
To learn more, visit us at www.weedmd.com
For Media Inquiries:
Marianella delaBarrera
VP, Communications & Corporate Affairs
Tel: 416-897-6644
Email: marianella@weedmd.com
Cautionary Statement on Forward-Looking Information
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation which are based upon WeedMD's current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may", "would" or "will" happen, or by discussions of strategy.
The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Forward-looking information in this news release include, but are not limited to, statements with respect to internal expectations, expectations with respect to actual production volumes, expectations for future growing capacity and the completion of any capital project or expansions. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of WeedMD to implement its business strategies; competition; crop failure; and other risks.
Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, WeedMD does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for WeedMD to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in WeedMD's Annual Information Form dated December 13, 2017 (the "AIF") and other disclosure documents of WeedMD filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the AIF and other disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.
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