SAN MATEO, Calif., Aug. 20, 2020 (GLOBE NEWSWIRE) — Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) (the “Company” or “PLUS”), a cannabis branded products company in the U.S., today released its unaudited financial and operational results for the three and six months ended June 30, 2020, expressed in U.S. dollars. These filings are available for review on the Company’s SEDAR profile at www.sedar.com and on the Canadian Securities Exchange (the “CSE”) website at www.thecse.com.
Q2 2020 Financial Highlights
- Revenues: Net revenues reached $4.3M in Q2 2020, representing 21% year-over-year growth as compared to Q2 2019 net revenues of $3.6M. The Company continues to see revenue growth driven by its core operations in the California adult-use market, with contributions from new brand launches, the Nevada adult-use market, and its national hemp CBD product line. Sales in Nevada were negatively impacted by COVID-19 during the quarter due to a market-wide reduction in demand and temporary disruption in supply caused in part by the pandemic.
- Gross Profits: Gross profits climbed to $1.6M in Q2 2020 compared to $0.7M in Q2 2019. Gross profit margin in Q2 2020 was 36%, up from 20% in Q2 2019. Reduced costs per unit derived from operating at increased scale, along with a higher average selling price per unit, drove the improvement in profitability.
- Operating Profits (Losses): Operating losses were $(1.4)M in Q2 2020, representing a 71% improvement year-over-year from $(4.6)M in Q2 2019.
- Cash Balance: The Company reported $13.0M in cash and cash equivalents at June 30, 2020. Cash and cash equivalents fell by $1.1M during the second quarter. With a $0.7M semi-annual interest payment occurring at the end of the period, the Company consumed just $0.4M in cash from normal operating, investing, and financing activities.
Q2 2020 Business Highlights
- In June 2020, the Company expanded the product offering of its PLUS CBDRelief brand. Following significant demand for the new wellness-based product line,1 the Company introduced a 1:1 Pomegranate CBD:THC ratio product. The new offering contains 5mg of THC and 5mg of CBD per serving along with ellagitannins, which are unique antioxidants found in pomegranates that are associated with anti-inflammatory pathways.2 The new product joins the initial CBDRelief lineup, which includes a 9:1 Tropical Mango gummy with 9mg of CBD and 1mg of THC per serving, and an 18:1 Tart Cherry gummy with 18mg of CBD and 1mg of THC per serving.
- In June 2020, the Company announced the retirement of its Chief Financial Officer, Jon Paul. The role has been filled by then-current VP of Finance, Nate Pearson. Mr. Pearson has significant experience operating within the finance departments of companies in emerging and heavily regulated industries. Following his time at Ernst & Young, Mr. Pearson worked at Tesla as a Senior Financial Analyst and at Lagunitas as the Director of Financial Planning and Analysis, before ultimately joining PLUS in his role as Vice President of Finance.
- In July 2020, just after the reporting period, the Company announced the launch of its new HI-CUBES brand. With 10mg of THC packed into each 5 calorie serving, HI-CUBES are the most concentrated gummy products available by volume within the California market.3 Manufactured with 100% whole-plant full-spectrum oil, the product delivers an array of cannabinoids, flavonoids and aromatic terpenes to create a powerful effect for consumers looking for an intense cannabis experience.
“The first half of 2020 has been about creating a sustainable economic foundation for the business and continuing to lay the groundwork for current and future growth. We are very happy with the progress we have made on both of these fronts,” stated Jake Heimark, Co-founder and CEO.
“Compared to the second half of 2019, in the first half of this year PLUS grew net revenues 29% from $7.0M to $9.0M, improved gross margin from 19% to 36%, and reduced cash burn 89% from $18.9M to $2.1M.
“While shipments from PLUS to its 3rd-party distributor in California dropped from Q1 to Q2, contributing to the quarter-over-quarter reduction in net revenues from $4.7M to $4.3M, market demand remained strong as sales of the Company’s products from its 3rd-party distributor to licensed retailers in California (the ‘Wholesale Depletions’) grew by 13% quarter-over-quarter.4
“Despite the difficulties we experienced in Nevada during the quarter, we have successfully restarted production with our manufacturing partner and look forward to revitalizing our presence in the market.
“Beyond the improvements we’ve seen in our fundamentals, we made an important strategic transition from a single brand to a portfolio of brands in the first half of this year with the launch of PLUS CBDRelief and HI-CUBES into the California adult-use market.
“PLUS continues to believe that California is the most strategically valuable market to build a cannabis brand. California is the largest legal Cannabis market in the world today, but more importantly still retains the most growth potential of any market in the U.S. The adult-use market in California is expected to grow by more than $4.0 billion dollars over the next four years. With a projected market size of 7.2 billion dollars in 2024, California is expected to be larger than the next four largest projected U.S markets (Colorado, Florida, New York, and Michigan) combined.5
“Moving forward we will continue to drive our 2020 strategy with a focus on: 1) ensuring the safety and health of our employees, customers, and partners during this pandemic; 2) establishing ourselves as the clear, long-term leader in California edibles; and 3) becoming a cash-flow positive business.”
In March 2020, there was a global outbreak of COVID-19, which continues to evolve. The extent to which the virus may impact the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The ultimate geographic spread of the disease; the duration of the outbreak; travel restrictions; social distancing; business closures or business disruptions; and the effectiveness of actions taken in the United States and other countries to contain and treat the disease all remain unknown.
While cannabis has been deemed an essential business throughout most of California, it is still too early to understand how COVID-19 will impact PLUS or the market as a whole. To date, the Company has not seen a sustained downside impact on consumer demand in its core California market. Please visit plusproductsinc.com/coronavirus to see the actions PLUS has taken to respond to this unique challenge.
(1) According to PLUS internal sales data, the PLUS CBDRelief brand sold into licensed retailers representing more than 80% of the Company’s California wholesale business within 3 months of its launch
(2)  Li Z, Henning SM, Lee RP, et al. Pomegranate extract induces ellagitannin metabolite formation and changes stool microbiota in healthy volunteers. Food Funct. 2015;6(8):2487-2495. doi:10.1039/c5fo00669d.  Heber D. Pomegranate Ellagitannins. In: Benzie IFF, Wachtel-Galor S, eds. Herbal Medicine: Biomolecular and Clinical Aspects. 2nd ed. Boca Raton (FL): CRC Press/Taylor & Francis; 2011.  Zhao R , Long X , Yang J , et al. Pomegranate peel polyphenols reduce chronic low-grade inflammatory responses by modulating gut microbiota and decreasing colonic tissue damage in rats fed a high-fat diet. Food Funct. 2019;10(12):8273-8285. doi:10.1039/c9fo02077b.  Kang B, Kim CY, Hwang J, et al. Punicalagin, a Pomegranate-Derived Ellagitannin, Suppresses Obesity and Obesity-Induced Inflammatory Responses Via the Nrf2/Keap1 Signaling Pathway. Mol Nutr Food Res. 2019;63(22):e1900574. doi:10.1002/mnfr.201900574
(3) According to internal market research
(4) According to sales data received from the Company’s 3rd party distributor, HERBL distribution solutions. Wholesale Depletions do not represent income for the Company but are an indicator of market demand for products sold by PLUS
(5) Arcview Market Research State of the Legal Cannabis Markets 7th Edition Report
Conference Call Details
At 5:00 pm Eastern Time / 2:00 pm Pacific Time today (Thursday, August 20, 2020) the Company will host a conference call and webcast to discuss the financial results and its recent corporate highlights.
Participant Dial-In Numbers:
Toll-Free: (866) 220-4156
Toll / International: (864) 663-5231
*Participants should request the Plus Products Earnings Call or provide conference ID: 9094390
Please dial-in or log-on to the webcast at least 15 minutes before the start of the call
The call will also be webcast at https://edge.media-server.com/mmc/p/96527bg3. Please visit the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. Following the conclusion of the call, there will be an archived audio webcast of the conference call available for replay on the Company’s website at PlusProductsInc.com.
Jake Heimark, Co-founder and Chief Executive Officer, and Nate Pearson, Chief Financial Officer, will be conducting a question and answer session following the prepared remarks.
PLUS is a cannabis food company focused on using nature to bring balance to consumers’ lives. PLUS’s mission is to make cannabis safe and approachable – that begins with high-quality products that deliver consistent consumer experiences. PLUS is headquartered in San Mateo, CA.
For further information contact:
CEO & Co-founder
Tel +1 213.282.6987
The CSE does not accept responsibility for the adequacy or accuracy of this release.
This press release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (each, a “forward-looking statement”). 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 and include, but are not limited to, statements relating to: the growth of the California market relative to other legal cannabis markets in the U.S.; the extent to which the Company will continue to drive its 2020 strategy with a focus on: 1) ensuring the safety and health of its employees, customers, and partners during this pandemic; 2) establishing itself as the clear, long-term leader in California edibles; and 3) becoming a cash-flow positive business and the extent to which, if at all, the Company is successful in pursuing these objectives; and the extent to which, if at all, the Company is able to revitalize its presence in the Nevada market.
These forward-looking statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this press 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. These risks include, but are not limited to, the success of the Company’s investments, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of the Company’s products, customer experience and retention, the continued development of adult-use sales channels, managements estimation of consumer demand in jurisdictions where the Company exports, expectations of future results and expenses, the availability of additional capital to complete capital projects and facilities improvements, the ability to expand and maintain distribution capabilities, the impact of competition, the ability of the Company to implement initiatives and the possibility for changes in laws, rules, and regulations in the industry.
Further, the duration and severity of the current COVID-19 pandemic may significantly impact or exacerbate some of the above-listed risks and uncertainties. Risks that may be further impacted by the COVID-19 pandemic relate to the Company’s operations and expansion, including the Company’s ability to grow its brand and sales and to maintain production levels in the event that the Company’s employees are restricted from accessing facilities for a significant period of time; to the Company’s ability to access capital and the level of borrowing costs; the Company’s ability to service obligations under its debt securities and other debt or lease obligations; and the Company’s ability to comply with the covenants contained in the agreements that govern the Company’s existing indebtedness.
The transmission of COVID-19 and efforts to contain its spread have recently resulted in international, national and local border closings, travel restrictions, significant disruptions to business operations, supply chains and customer activity and demand (across all sectors), service cancellations, reductions and other changes, and quarantines, as well as considerable general concern and uncertainty.
The overall severity and duration of COVID-19-related adverse impacts on the Company’s business will depend on future developments that cannot currently be predicted. Even after the COVID-19 outbreak has subsided, the Company may continue to experience material adverse impacts to the businesses as a result of its global economic impact, including any related recession.
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.
Adjusted uncompressed weighted average shares outstanding and loss per share.
The Company has additionally determined the adjusted uncompressed weighted average shares outstanding and loss per share, basic and diluted. The Company believes these measures to be representative of loss and comprehensive loss on a per share basis; however, these performance measures have no standardized meaning. As such, there are likely to be differences in the method of computation when compared to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with GAAP, some investors use this information to evaluate the Company’s performance. Accordingly, they 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 GAAP.
PLUS PRODUCTS INC.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in U.S. Dollars – Unaudited)
|As at June 30,||As at December 31,|
|Cash and cash equivalents||13,033,390||15,176,184|
|Prepaids and deposits||641,580||1,262,269|
|Prepaids and deposits||947,674||789,521|
|Property and equipment||2,889,287||3,703,597|
|Deferred tax asset||1,950,398||–|
|Accounts payable and accrued liabilities||1,167,271||2,289,393|
|Current portion of vehicle loans||28,248||27,753|
|Current portion of lease liabilities||190,821||284,588|
|Deferred tax liability||285,669||–|
|Accumulated other comprehensive loss||578,592||(229,560||)|
|Total shareholders’ equity||5,974,373||8,299,208|
|Total liabilities and shareholders’ equity||25,774,514||29,254,971|
PLUS PRODUCTS INC.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Expressed in U.S. Dollars, except number of shares – Unaudited)
|Three Months Ended June 30,||Six Months Ended June 30,|
|Cost of sales||2,757,737||2,855,224||5,843,156||5,408,325|
|Advertising and promotion||171,207||483,260||557,882||710,560|
|Depreciation and amortization||25,318||1,078||50,637||1,078|
|General and administrative||382,806||568,326||843,525||1,028,627|
|Meals and travel expenses||5,951||217,750||137,895||416,310|
|Regulatory fees (recovery)||(1,517||)||2,699||14,035||6,035|
|Research and development||11,819||131,032||19,292||137,019|
|Salaries and benefits||1,411,071||1,797,422||3,154,781||2,853,110|
|Loss from operations||(1,358,252||)||(4,608,684||)||(3,424,229||)||(7,616,412||)|
|Other (income) expense|
|Interest and other income||(23,165||)||(73,578||)||(21,675||)||(74,187||)|
|Accretion finance income||(42,673||)||–||(86,480||)||–|
|Foreign exchange loss (gain)||23,881||90,740||60,661||(66,839||)|
|Gain on lease termination||(12,900||)||–||(12,900||)||–|
|Impairment of property and equipment||10,765||–||10,765||–|
|Loss before income taxes||(2,127,620||)||(5,268,786||)||(5,042,024||)||(8,638,622||)|
|Income tax (recovery) expense||(1,681,718||)||106,271||(1,664,728||)||181,295|
|Loss for the period||(445,902||)||(5,375,057||)||(3,377,296||)||(8,819,917||)|
|Currency translation adjustment||671,973||–||(808,152||)||–|
|Loss and comprehensive loss for the period||(1,117,875||)||(5,375,057||)||(2,569,144||)||(8,819,917||)|
|Weighted average shares outstanding:|
|Basic and diluted||34,778,568||30,715,437||34,300,535||27,814,002|
|Loss per share:|
|Basic and diluted||(0.01||)||(0.17||)||(0.10||)||(0.32||)|
Greene Concepts’ Subsidiary, Water Club, Signs Joint Venture Deal with New World Health and Wellness to Market New Hemp Line Products to 300 Million Amazon Customers
Marion, North Carolina–(Newsfile Corp. – September 29, 2020) – Greene Concepts Inc. (OTC Pink: INKW) is pleased to announce it has finalized and signed a joint venture agreement between its’ wholly owned subsidiary the Water Club and New World Health and Wellness whereby New World Health and Wellness will produce a new line of hemp-based products for the Water Club. These new products are aptly named “Be Hemp” and Greene Concepts will sell these to the 300 Million Amazon Customers through its Water Club subsidiary.
To view an enhanced version of this graphic, please visit:
As announced in the May 22, 2020 press release, the Water Club is Greene Concepts’ wholly owned subsidiary and is a subscription service for multiple products so consumers may directly order and receive these goods at their chosen location. The manufacturer New World Health and Wellness, a Washington-based manufacturer, is a brick and mortar retailor and online distributor of hemp-based wellness products having previously established an alliance with Greene Concepts this past June (see June 9, 2020 press release).
NWH & Wellness
To view an enhanced version of this graphic, please visit:
David Day, CEO of New World Health and Wellness shares, “We are happy and excited about this joint venture with Greene Concepts and by creating a product line for them that connects to their new Amazon.com strategy. The Water Club will have customers who may directly purchase or subscribe to the recurring purchase of their new hemp-based line “Be Hemp”. Our goods, made out of the purest natural hemp, help the masses with numerous physical ailments to include chronic pain, stress, inflammation, anxiety, sleep and heart health and are legalized for distribution throughout the country in all 50 states. We are excited to partner with Greene Concepts in this manner, I believe this initiative coupled with the recently announced Amazon deal will greatly increase Greene Concepts’ revenues and price per share.”
Mr. Day continues, “The Greene Concepts Water Club exponentially increases our footprint in the Hemp industry as we offer healthy solutions for people and pets (from our canine Hemp line). One of my prized vendors, Stay Cool, is also participating in the Water Club and will offer Kava and Hemp beverage lines to present healthy alternatives to the public. Our products, derived from the purest natural Hemp, are developed with a centric based focus on assisting the body’s own natural healing properties. I am personally committed to the Water Club’s success.”
Lenny Greene, CEO of Greene Concepts states, “Our new Amazon.com strategy is offering 300 million Amazon customers “Be-Hemp” products in addition to our “BE Water” artesian water line. We have on the drawing board and plan on partnering with New World Health and Wellness to develop multiple consumer products. We are extremely pleased to announce these new products available under the Greene Concepts product line and thank New World Health and Wellness for producing them for us. Each of our customers can purchase these new products and have complete confidence that the ingredients are natural, tested and highly beneficial. The creams and roll-on provide fast-acting relief to skin, joints, bones and muscles plus they have a refreshing scent. The results thus far have been outstanding and we anticipate fast-paced sales and revenue growth through our association with Amazon.com as more and more consumers become aware of the superb health benefits offered with the new “Be Hemp” line of products.”
Lenny Greene, CEO of Greene Concepts continues, “According to Grandview Research, the global Hemp market was valued at USD 4.6 billion in 2018 and is expected to grow at a compound annual growth rate (CAGR) of 22.2% from 2019 to 2025. The demand for Hemp Products for medical and wellness purposes is high due to its healing properties, which is the key factor driving the growth of the market.” (see here).
About New World Health and Wellness
Founded by David and Julie Day, the New World Health and Wellness CBD retail store opened its doors in 2019 as the only Hemp retailor in the Marysville, WA area near Seattle. The store offers numerous Hemp whole-body wellness products to include pain relief, oils and tinctures, pet care, edibles, and skin care. With a company goal of educating the community on the healing properties of Hemp to help others achieve better health, New World Health and Wellness develops brands to better enable and strengthen both the mind and body.
Amazon is a titan of e-commerce and is the go-to site for online shoppers and merchants alike. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit https://www.aboutamazon.com/ and follow @AmazonNews. (Source: https://ir.aboutamazon.com/overview/default.aspx).
About Greene Concepts, Inc., Mammoth Ventures, Inc. and Water Club, Inc.:
Greene Concepts, Inc. (http://www.greeneconcepts.com) is a publicly traded company. Through its recently acquired wholly owned subsidiary, Mammoth Ventures Inc., the Company has entered the specialty beverage and bottling business and is an emerging leader in the global scientifically formulated beverage industry. Through its subsidiary Water Club, Inc. we intend to pursue subscription-based delivery of water and scientifically formulated beverages directly to the consumers home and market the convenience of this service thru social media affiliate marketing partners.
Safe Harbor: This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company’s current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company’s business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission and OTC Markets, Inc. OTC Disclosure and News Service. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Greene Concepts, Inc.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/64844
Medical Marijuana, Inc. Becomes First Company to Reach Two-Year Milestone in High-Level CBD Hemp Oil Stability Study
SAN DIEGO, Sept. 29, 2020 (GLOBE NEWSWIRE) — via NewMediaWire — Medical Marijuana, Inc. (OTC: MJNA) (the “Company”), the first-ever publicly traded cannabis company in the United States that launched the world’s first-ever cannabis-derived nutraceutical products, brands and supply chain, announced today that the Company has reached a two-year milestone for long-term stability testing on its flagship THC-free cannabidiol (CBD) oil product Real Scientific Hemp Oil-X™ (RSHO-X™). The stability study was conducted in strict compliance with FDA/ICH guidelines (Q1A-R2).
The study was outsourced to one of the most qualified cGLP/cGMP compliant Contract Research Organizations (CROs) with ISO 17025 accreditation and certification.
“As a Company of Firsts, we are excited to announce that we now have the first CBD hemp oil product on the market to have a proven two-year shelf life. This is the gold standard within the industry for shelf life and, just like many of the testing benchmarks and methods that we have developed for the industry, we believe that other CBD companies will begin testing their products for a similar stability standard and together we will further legitimize the CBD industry,” said Medical Marijuana, Inc. CEO Dr. Stuart Titus. “We will continue to look for new and innovative ways to prove our products’ safety and efficacy.”
The stability study tested several samples of RSHO-X™ CBD oil, which was also exposed to various environmental conditions and temperatures that may be experienced in various locations throughout the world. The samples, which were tested for appearance, odor, specific gravity, viscosity, package compatibility, and complete microbial characteristics, showcased that the product is stable at the end of a two-year time period and has identical CBD concentrations to what existed at the beginning of the study.
Also, the study was performed using fully validated, proprietary analytical UPLC-PDA and LC-MS/MS methods reflecting the specificity and selectivity toward RSHO-X™, including data elements and parameters such as accuracy, precision, repeatability, ruggedness, system suitability, linearity, specificity, dilution integrity, and dynamic range.
The test results showed no change (no more than 5%) in the CBD content and other specifications that were observed and the container closure system was faultless at both long-term and accelerated test conditions. The product also tested negative for any harmful microbes or toxins and the positive 24-month, long-term stability test results suggest that RSHO-X™ is a stable formulation and example for the industry.
About Medical Marijuana, Inc.
We are a company of firsts®. Medical Marijuana, Inc. (MJNA) is a cannabis company with three distinct business units in the non-psychoactive cannabinoid space: a global portfolio of cannabinoid-based nutraceutical brands led by Kannaway® and HempMeds®; a pioneer in sourcing the highest-quality legal non-psychoactive cannabis products derived from industrial hemp; and a cannabinoid-based clinical research and botanical drug development sector led by its pharmaceutical investment companies and partners including AXIM® Biotechnologies, Inc. and Kannalife, Inc. Medical Marijuana, Inc. was named a top CBD producer by CNBC. Medical Marijuana, Inc. was also the first company to receive historic import permits for CBD products from the governments of Brazil, Mexico, Argentina, and Paraguay and is a leader in the development of international markets. The company’s flagship product Real Scientific Hemp Oil has been used in several successful clinical studies throughout Mexico and Brazil to understand its safety and efficacy.
Medical Marijuana, Inc.’s headquarters is in San Diego, California, and additional information is available at OTCMarkets.com or by visiting www.medicalmarijuanainc.com. To see Medical Marijuana, Inc.’s corporate video, click here.
Shareholders and consumers are also encouraged to buy CBD oil and other products at Medical Marijuana, Inc.’s shop.
This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Medical Marijuana, Inc. to be materially different from the statements made herein.
FOOD AND DRUG ADMINISTRATION (FDA) DISCLOSURE
These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.
Medical Marijuana, Inc. does not sell or distribute any products that are in violation of the United States Controlled Substances Act.
Public Relations Contact:
Chief Executive Officer
Investor Relations Contact:
P. (858) 283-4016
SLANG Worldwide Continues to Consolidate Colorado Supply Chain with Acquisition of Pleasant Valley Ranch
Toronto, Ontario–(Newsfile Corp. – September 29, 2020) – SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) (“SLANG” or the “Company“), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today announced that it has entered into an agreement dated September 25, 2020 (the “Agreement“) to acquire (the “Acquisition“) Colorado-licensed cannabis cultivator Pleasant Valley Ranch, LLC (“Pleasant Valley“).
SLANG anticipates that ownership of a cultivation operation will provide greater assurance of a supply of raw materials in the growing Colorado market, while also reducing its input costs and thereby improving gross margins.
“The purchase of Pleasant Valley is another key step in our strategy to assemble a fully integrated, wholesale operation in our core market of Colorado,” said SLANG President & CEO Chris Driessen. “The Colorado market continues to generate double-digit growth, and this transaction will help us capture additional market share. The acquisition of a trusted supplier will help us continue to expand our production volumes while improving our unit economics and maintaining our high standards of quality.”
Pleasant Valley is a privately-owned company located in Carbondale, CO specializing in high-quality, organically grown cannabis strains that thrive in high altitude, mountainous environments. Pleasant Valley has 1,600 square feet of greenhouse cultivation area, and a five-acre outdoor facility at an elevation of approximately 7,500 feet that produces an authentic, naturally cultivated product using snowmelt water. It currently has a capacity of 3,600 plants and produces approximately 4,800 pounds annually and is projected to double its capacity by 2021. Pleasant Valley has been a key supplier of raw materials for SLANG-branded concentrate and edibles products in Colorado.
The purchase of Pleasant Valley marks another milestone in SLANG’s strategy of consolidating its supply chain in Colorado. Following the approval of its application for suitability by the Colorado Department of Revenue’s Marijuana Enforcement Division (the “MED“) in August 2020, the Company acquired Denver-based licensed cannabis producer and distributor, Peoria Partners LLC. The Company is evaluating other potential acquisitions and opportunities in Colorado.
The Colorado market generated total retail sales in excess of $1.7 billion USD in 2019, and grew by 22% in the first seven months of 2020 compared to the same period last year, according to BDSA. In these conditions of rising demand, the retail market price of flower in the state has recently exceeded $1,300 USD per pound, according to the Colorado Department of Revenue, an increase of more than 30% from a year earlier.
Pursuant to the Agreement, the Company will acquire Pleasant Valley for consideration comprised of a non-material amount of cash and common shares of the Company. The Acquisition will be completed by way of three-cornered amalgamation and is anticipated to close in the fourth quarter of 2020. Closing of the Acquisition is subject to the satisfaction or waiver of customary closing conditions, including applicable regulatory approval by the MED.
Media and Investor inquiries
About SLANG Worldwide Inc.
SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. The Company specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. SLANG is listed on the Canadian Securities Exchange under the ticker symbol SLNG and on the OTCQB under the symbol SLGWF. For more information, please visit www.slangww.com.
This news release contains statements that constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Forward-looking statements in this news release include, but are not limited to, statements regarding the Company’s proposed acquisition of Pleasant Ranch and the Company’s production and distribution of cannabis products in Colorado.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to the COVID-19 global pandemic, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings “Risk Factors” in SLANG’s final long form prospectus dated January 17, 2019 and “Risks and Uncertainties” in the management discussion and analysis for the year ended December 31, 2019 and six months ended June 30, 2020, each as filed on SEDAR at www.sedar.com. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/64821
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