Kelowna, BC, Feb. 12, 2020 (GLOBE NEWSWIRE) -- GTEC Holdings Ltd. (TSX-V:GTEC) (OTCQB:GGTTF) (FRA:1BUP) (“GTEC” or the “Company”), a multi-licence producer of premium indoor cultivated cannabis, is pleased to present the following updates on production and sales:
Production and Sales Update for the Fourth Quarter of fiscal 2019
unaudited ending November 30, 2019
- Produced 434 kilograms (“KG”) of cannabis
- Sold 280 KG of cannabis, with estimated weighted average selling prices of:
- 256 KG of business-to-business (“B2B”) sales at $5.25 per gram for flower and $2.50 per gram for secondary products (trim and popcorn)
- 24 KG of recreational cannabis sales at $9.25 per gram
- An estimated cash cost between $2.15 - $2.20 per gram. The increased cash cost was due to labour and packaging relating to recreational sales
- The final week of Q4 saw an initial recreational product launch of 24 KG, primarily produced at Grey Bruce Farms
- The Company will report its fiscal 2019 audited results on Tuesday March 17, 2020
In Q4, the Company commenced a transition from selling its cannabis produced from commercial cultivars on a B2B wholesale basis, to selling cannabis produced from its unique cultivars in a consumer packaged good (“CPG”) format via Provincial supply chains. As a result of logistical factors, certain shipments into Provincial sales channels, which were originally anticipated to ship in Q4 2019 occurred early in Q1 2020.
All figures reported above with respect to the quarter ended November 30, 2019 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its consolidated financial statements for the year ended November 30, 2019. Accordingly, investors are cautioned not to place undue reliance on the foregoing information. The Company does not intend to provide preliminary results in the future. The preliminary results provided in this news release constitute “forward-looking information” within the meaning of applicable Canadian securities laws, are based on several assumptions and are subject to a number of risks and uncertainties. Actual results may differ materially. See “Cautionary Statement Regarding Forward-Looking Information”.
Other Production and Sales Updates
- Three licensed cultivation facilities, totaling approximately 39,000 square feet, are now operating at full capacity, with Q2 harvests expected to drive increased revenue growth in Q2 and Q3,2020
- On an ongoing basis, the Company has been selling all cannabis that has been produced; which demonstrates significant demand for GTEC products. The Company also has not experienced any material issues with production, product recalls, quality control, crop loss, or stale dated products
- BLK MKT products receiving positive reviews on Lift & Co
- The majority of the Company’s harvests are testing above 20% THC, with several harvests testing in the 26-29% range, resulting in certain GTEC products achieving some of the highest THC content in the sector
- Due to demand levels for BLK MKT branded products, the BCLDB has implemented an order limit on wholesale purchases by retail stores
- BLK MKT products rank amongst the highest pricing tiers (on per gram basis) in all retail channels
- The Company is increasing average selling prices and gross margins by transitioning from bulk B2B cannabis sales to CPG cannabis sales (via Provincial sales channels)
- Completed the successful transition from commercial cultivars to unique premium cultivars, with the final harvests of the commercial cultivars scheduled for February 2020, which allows the Company to enter Q2 solely producing unique premium cultivars, which is projected to increase the Company’s average selling price and gross margins
- Launched single gram SKUs for BLK MKT cultivars in B.C. and Saskatchewan, with an increased selling price per gram than its 3.5 gram SKUs
- Launched Tenzo (Purple Punch 2.0) in B.C. and Saskatchewan
- Commenced the extraction of secondary products (trim and popcorn) into distillate oil, which has been sold to its wholesale partners
- Commenced small-scale test harvests of new cultivars which are highly sought-after in other mature markets, to determine viability for commercial CPG production
- Recently approved as a Licensed Supplier in the Province of Manitoba
“While the overall sector is facing rising inventory, declining selling prices and disappointing consumer reviews, GTEC’s focused business model of high-quality product, expanding distribution channels, and high selling prices are positioning the Company well,” said Norton Singhavon, Founder and CEO of GTEC. “We're confident that our singular focus on cultivating, selling and marketing premium cannabis products will give us the leading edge in the industry.”
Other Corporate Updates
- Construction at the 3PL joint venture is currently on schedule to complete during the fiscal 2020 year. The JV has the necessary financial resources to complete its build out, pursue licencing and to fund the operating capital. In aggregate, the JV facility is expected to have the capacity to be able to produce up to 6,000 KG of indoor flower annually
- Executed a term sheet to divest its last remaining retail asset (located in Vancouver, BC). The transaction remains subject to closing; which is anticipated no later than March 31, 2020
- Hired a Director of Security & Regulatory Affairs, who will play a key-role in maintaining regulatory compliance as the Company’s increases its production footprint
- As part of the Company’s mandate to focus on the cultivation of premium indoor flower, it has listed its Spectre Labs warehouse for sale at $1.2 million. The Company has been presented offers and is currently in negotiations with multiple prospective buyers, with the expectation of a completed sale in Q2 2020
About GTEC Holdings Ltd.
GTEC Holdings Ltd. is a specialized cannabis company which produces and distributes highly sought-after ultra-premium cannabis products in Canada. The Company has four licensed and operational assets and is currently distributing cannabis through medical and recreational sales channels.
GTEC’s exclusive cultivar collection includes rare and unique phenotypes, which are not currently available from other Licenced Producers. GTEC’s premium and ultra-premium product portfolio includes; BLK MKT, TM Tenzo TM, GreenTec TM, Cognōscente TM and Treehugger TM.
The Company wholly owns operations in BC, Alberta and Ontario, and is licensed by Health Canada for the following: sales into recreational supply chains, direct sales to medical patients, bulk sales to other Licenced Producers, extraction, and analytical testing.
GTEC is a publicly traded corporation, listed on the TSX Venture Exchange (GTEC), OTCQB Venture Market (GGTTF) and Frankfurt Stock Exchange (1BUP). The Company’s headquarters is located in Kelowna, British Columbia.
To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co
For additional information, please contact:
GTEC Holdings Ltd.
1-800-351-6358
contact@gtec.co
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. To the extent any forward-looking information in this news release constitutes “financial outlooks” within the meaning of applicable Canadian securities laws, such information is being provided as preliminary financial and operational results for the quarter ended March 31, 2018 and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. 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. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein. Our actual financial position and results of operations may differ materially from management’s current expectations and, as a result, our revenue and cash on hand may differ materially from the revenue and cash values provided in this news release. Such factors include, but are not limited to: preliminary financial and operational results are subject to the completion of the Company’s financial closing procedures and have not been audited or reviewed by the Company’s independent registered public accounting firm; general business, economic, competitive, political and social uncertainties, delay or failure to receive board, shareholder or regulatory approvals, where applicable, and the state of the capital markets as well as the risk factors set out in the Company’s management’s discussion and analysis dated March 26, 2019 for the periods ended November 30, 2018 and 2017 and filed with Canadian securities regulators available on the Company’s issuer profile on SEDAR at www.sedar.com.. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. For instance, there can be no assurance that the Company’s financial results for the fourth quarter ended December 31, 2019, including the Company’s revenues, average selling price or gross margins or any other preliminary financial and operational results for the quarter ended December 31, 2019 will increase as projected; the JV will complete build out, licencing and maintain necessary operating capital as anticipated; the JV will produce its projected 6,000 KG; or that the sale of the Vancouver retail location or Spectre will close. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking information included in this news release is made as of the date of this news release. The Company 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 required by law.