WINNIPEG, Manitoba, Jan. 09, 2023 (GLOBE NEWSWIRE) -- DELTA 9 CANNABIS INC. (TSX: DN) (OTCQX: DLTNF) (“Delta 9” or the “Company”), announces various cost cutting measures as a part of the Company’s 2023 strategic plan with the goal of producing positive cash flow from operations.
As a part of the 2023 strategic plan the Company plans to streamline its cultivation operations and right-size capacity at its Winnipeg based cultivation facilities, as well as various other cost cutting measures including reducing public company and investor relations costs.
“Delta 9’s retail operations have achieved profitability and positive operating cash flows over the past several years,” said Mark Jonker, COO of Delta 9, “Our cultivation and wholesale cannabis operations have struggled with profitability due to continued price and margin compression in the Canadian cannabis market. Our decision is designed to significantly reduce costs and to chart a near term path to becoming positive cash flow from operations.”
“We recognize that in the current market environment we need to make near term strides to improve profitability across our operations. The Board of Directors and executive have also agreed to reducing compensation as part of their commitment to achieving positive cash flows from operations in the current fiscal year,” said Jim Lawson, CFO of Delta 9, “The cost savings are expected to reduce operating costs by $3 Million to $4 Million in 2023.”
As a part of the plan, cultivation capacity at the Company’s Winnipeg based cultivation facilities will be cut by approximately 40%, which will include a temporary layoff of approximately 40 staff. The plan has been developed to ensure that there is no material impact on wholesale revenues or on shipments to the Company’s wholesale and retail customers. Delta 9 is working closely with employees to reduce the impact of this decision including continuing to cover costs for Company benefits and other transitional services. The Company’s retail operations will not be impacted as a part of this plan.
“I would like to thank the employees affected by this decision for their invaluable contributions to Delta 9’s success and growth,” said John Arbuthnot, CEO of Delta 9, “This was a very difficult decision, but it is a key component of executing on our strategic plan and one we believe best positions Delta 9 for profitable growth”
For more information contact:
Investor & Media Contact:
Ian Chadsey VP Corporate Affairs
Mobile: 204-898-7722
E-mail: ian.chadsey@delta9.ca
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. The company sells cannabis products through its wholesale and retail sales channels and sells its cannabis grow pods to other businesses. 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 Toronto Stock Exchange under the symbol "DN" and on the OTCQX under the symbol "DLTNF". For more information, please visit www.invest.delta9.ca.
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 the Company’s expansion plans. 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 all risk factors set forth in the annual information form of Delta 9 dated March 31, 2022 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.
