CROP Announces Signing of Commercial Real Estate Purchase Agreement by Elite Ventures for Tonopah, Nevada Property for Gross USD $24.0 Million
Momentum Public Relations
Press Release: August 1st, 2019
CROP Infrastructure Corp. (CSE: CROP)(OTC: CRXPF) (Frankfurt: 2FR) (“CROP” or the “Company”), announces that Elite Ventures Group LLC (“Elite”), a limited liability company organized and existing under the laws of the State of Nevada in which the Company holds a 49% membership interest, has entered into two commercial real estate purchase agreements (the “PropertyPurchase Agreement”) with Trinity Global Investments LLC (“Trinity Global”) dated July 15, 2019, pursuant to which Trinity Global has agreed to purchase certain real property located in Tonopah, Nevada (together, the “Nevada Property”) owned by Elite.
The Nevada Property will be sold together with all buildings, improvements, and fixtures constructed or located on the property, in addition to 50 acre-feet of ground water rights, the assignment of a certain Nevada energy agreement along with any costs associated therewith, and the right to use the Licenses (as defined below) on the Nevada Property (together with the Nevada Property, the “EliteAssets”) for a gross aggregate purchase price of USD$6,200,000 (the “Property Purchase Price”).
In connection with the sale of the Nevada Assets, The Hempire Company L.L.C. (“Hempire”), a limited liability company organized and existing under the laws of the State of Nevada, has agreed to sell four active, authenticated, usable, uninhibited and transferable Nevada Marijuana Certificates (the “Licenses” and, together with the Elite Assets, the “Nevada Assets”) owned by Hempire to Trinity Global pursuant to the terms of an asset purchase agreement (the “Asset Purchase Agreement”) dated July 15, 2019 in consideration for USD$17,800,000 (the “License Purchase Price”). Pursuant to the terms of a Nevada cannabis license option agreement dated April 17, 2019 between Hempire and Elite, Hempire granted Elite with an option to acquire 100% of the Licenses, at any time prior to April 17, 2050, for USD$10,000.
In consideration for the purchase of the Nevada Assets, Trinity Global has agreed to pay an aggregate cash sum of USD$24,000,000 (which amount represents the aggregated sum of the Property Purchase Price and the License Purchase Price) as follows:
- an aggregate of USD$50,000 payable on or before July 26, 2019 (the “PropertyDeposit”), which Property Deposit shall entitle Trinity Global to a due diligence period ending August 6th (the “Due Diligence Period”);
- USD$950,000 payable on or before July 26, 2019 (the “LicenseDeposit”), which License Deposit shall become non-refundable and applied to the License Purchase Price at the expiration of the Due Diligence Period; and
- USD$23,000,000 payable upon the closing of the Property Purchase Agreement and the Asset Purchase Agreement (the “Closing”), which Closing is expected to occur on or before August 9th, 2019, provided there are no unforeseen delays.
In connection with the sale of the Nevada Assets, Elite and Hempire have entered into a separate disbursement agreement dated July 15, 2019, pursuant to which CROP will benefit from a combined USD$16,163,464.60 (CAD$21,251,723) directly from the sale of the Nevada Assets and indirectly through the repayment of certain debts accrued in connection therewith. Accordingly, USD$8,301,352.27 (CAD10,914,617) will be sent directly to CROP’s account as reimbursement for certain upgrades to the Nevada Property paid for by CROP, for interest payments made to date by CROP to service the initial loan used to purchase the Nevada Property and for its 49% share of the net profits. Furthermore, USD$7,862,112.34 (CAD$10,337,105) will be directly paid to certain creditors to the Nevada Property including an aggregate of CAD$5,250,000 to the certain holders of convertible debentures of the Company as well as USD$3,399,344.49 to the holder of a 20 year note issued in connection with the Nevada Property and with. The balance of the proceeds from the sale of the Nevada Assets will be paid to remaining members of Elite in amounts proportional to each member’s equity stake. All exchange rates based on the Bank of Canada exchange rate dated July 31, 2019.
Closing is subject to a number of conditions, including but not limited to, completion of satisfactory due diligence by Trinity Global, receipt of the requisite state and local governing authority approvals, and other customary closing conditions normal for a transaction of this nature.
Michael Yorke, CEO stated “The sale of the Esmerelda THC property will be bittersweet for the Company. We used a combination of long-term mortgages and convertible debt to finance the project making this an attractive return on investment for CROP and its stakeholders. The sale of the Nevada project will clean up our balance sheet as well as provide capital to vertically integrate, hire additional personnel, and focus on the four states the Company remains present.”
About CROP
CROP is a publicly listed company trading on the CSE under the symbol CROP. The Company is focused on owning a portfolio of cannabis branding, CBD and real estate assets through its wholly and partially-owned subsidiaries. CROP’s portfolio of projects includes cultivation properties in California, two in Washington State, a 1,000-acre Nevada cannabis farm, 2,115 acres of Hemp CBD farms, and a growing portfolio of share equity in various companies within the cannabis space.
CROP has developed a portfolio of assets including Canna Drink, a cannabis infused functional beverage line and 16 cannabis brands.
- Published in Cannabis, CBD, CROP Infrastructure, Marijuana, News Home
Significant progress in EXMceuticals Portuguese Operations with R&D facility, New Project and Pilot-Scale Refinery
Momentum Public Relations
Press Release: July 31, 2019
EXMceuticals Inc. (CSE: EXM) (FSE: A2PAW2) (the “Company” or “EXM”), a cultivator and producer of high-grade cannabis extracted ingredients for the pharmaceutical, therapeutic, nutraceutical, and cosmetic industries, is pleased to provide an update on its Portuguese activities.
Significant progress has been achieved in reaching EXM’s technical and scientific objectives as regards its activities in Portugal.
- New R&D facility: Construction of new Research & Development (R&D) facility, located inside the Tec Labs Innovation Centre, the incubator of the Faculty of Sciences of University of Lisbon, Portugal, by EXMceuticals Portugal is complete and the new R&D facility is operational.
- New CBD and terpene research opportunities for various industries: The new R&D facility will enable research into CBD and terpene formulations for the nutraceutical, cosmetics and wellness industries. In the medium term the R&D activities will also target pharmaceutical grade formulations.
- New research project: EXMceuticals Portugal has commenced a new research project under the Portugal 2020 program, which is being executed in the new R&D facility. Portugal 2020 is a Framework Program between Portugal and the European Commission that brings together the five European Structural and Investment Funds.
- Importation, research and development licensing: EXMceuticals Portugal is in the process of obtaining, from INFARMED, the Portuguese National Authority of Medicines and Health Products, research and development authorizations allowing EXM to import cannabis-based ingredients. This will also permit EXM to refine, manufacture and export cannabis-based medicinal products from the pilot-scale refining facility built as part of the new R&D lab. The pilot-scale refinery and manufacturing activities are included in the submitted Portugal 2020 R&D project.
- New R&D analytical procedures: Initial R&D activities regarding CBD extraction, purification and associated analytical procedures have been ongoing for several months, in collaboration with local universities, and have already identified several innovative methods of streamlining and improving the various processes.
- Jobs creation: In the next 12 months, EXM plans to create over 80 highly qualified technical & scientific research jobs in Portugal as we move from our current R&D pilot-scale production towards industrial-scale production and we increase the number and scope of the projects undertaken in our R&D facilities.
Jonathan Summers, Chairman of EXM, added, “Our dedicated R&D activities are now fully functional, and these offer huge scope to create original and unique formulations that will benefit the emerging CBD industry as well as consumers. Our pilot refining and manufacturing capabilities will be fully operational within a few weeks once fully licenced. EXM continues to work very closely with the relevant Portuguese authorities, especially INFARMED, regarding our Portuguese activities. The Portuguese regulators and relevant governmental agencies continue to be very supportive and engaged.”
This is the first step towards creating EXM’s European base for R&D and distribution. The company plans to create an environment for advanced research innovation, training and collaboration with the industry. ”Molecules from cannabis are extraordinary and the scientific community around the world is starting to understand the enormous potential of the plant,” said EXM Chief Innovation Officer Susana Santos. “Our R&D facility includes state of the art equipment and is aimed ensuring the highest standards of quality assurance that will guarantee that our client’s customers are always protected and their expectations fully satisfied.”
ON BEHALF OF THE BOARD OF DIRECTORS OF EXMCEUTICALS INC.
Michel Passebon, Chief Executive Officer and Director
For further information contact:
Investor Relations
Email: investors@exmceuticals.com
Media Enquiries:
Email: media@exmceuticals.com
Europe – Jane Glover: +44 (0) 203 757 4990
North America – Mélanie Guillemette: +1 819 668 2734
- Published in Cannabis, CBD, EXMceuticals, Marijuana, News Home
Crop’s First California Extracts Pass Pesticide and Heavy Metal Testing
Momentum Public Relations
Press Release: July 24, 2019
CROP INFRASTRUCTURE CORP. (CSE: CROP) (OTC: CRXPF) (Frankfurt: 2FR) announced today that its first batch of THC distillate cartridges derived from the 2018 harvest have passed heavy metal and pesticide testing consistent with the excellent initial test results after the 2018 harvest.
The packaging team has now resumed filling cartridges in preparation of the launch of Evolution Cannabis and Hempire brands in California.
Furthermore, the first two greenhouses at the Humboldt organic farm have been harvested and are awaiting trimming, testing and packaging.
This will allow the company to launch its premium distillate line and organic fresh flower SKUs into the California market through internal sales and the partially owned Flip Distro, giving sales teams a full suite of products to offer retailers.
CROP CEO, Michael Yorke, stated: “This is a solid step forward rolling out our cartridge, flower and pre-rolled lines into the California market, further benefiting from the recent, partial acquisition of Flip Distro with its experienced sales staff.”
About CROP
CROP is publicly listed company trading under symbol CROP.CSE. The company is focused on cannabis branding and real estate assets. CROP’s portfolio of projects includes cultivation properties in California, two in Washington State, a 1,000-acre Nevada cannabis farm, 2,115 acres of Hemp CBD farms, and a growing portfolio of common share equity in upcoming listings within the cannabis space.
CROP has developed a portfolio of assets including Canna Drink, a cannabis infused functional beverage line and 16 Cannabis brands.
Company Contact
Michael Yorke – CEO and Director
E-mail: info@cropcorp.com
Website: www.cropcorp.com
Phone: (604) 484-4206
- Published in Cannabis, CBD, CROP Infrastructure, Marijuana, News Home
Grown Rogue Issued Patent for Nitrogen Sealed Pre-Rolls
Momentum Public Relations
Press Release: July 22, 2019
Grown Rogue International Inc. (CSE:GRIN | OTC:GRUSF) (“Grown Rogue” or the “Company“), a vertically-integrated, multi-state cannabis company with licenses and assets in Oregon, California, and now entering Michigan, announced today the US Patent and Trademark Office awarded Grown Rogue full patent for its innovative “Certified Fresh” Nitrogen Sealed Pre-rolls. The Nitrogen Sealing Process eliminates oxygen through nitrogen injection which preserves the freshness of the flower. The process also vacuum seals the product to lock in freshness.
“There are dozens of premium pre-rolls in the cannabis market, but there is only one innovation that seals with nitrogen and ensures freshness,” said Obie Strickler, CEO and Co-Founder of Grown Rogue.
Several cannabis companies have used nitrogen to seal cannabis in various applications but Grown Rogue is the first to develop a solution to seal a glass tube with nitrogen. “Customers can see the quality of product through the glass and with the nitrogen infusion will know that they can enjoy a truly fresh cannabis experience,” added Mr. Strickler.
Grown Rogue first introduced the “Certified Fresh” Nitrogen Sealed Pre-rolls in January 2018 which drove sales and brand awareness in the Oregon market. Since then, the Nitrogen Sealed Pre-Rolls have become a symbol of the companies’ commitment to Innovation in a competitive marketplace. The company has developed nitrogen sealed 3.5 gram glass flower jars which is also an industry first, but is not currently seeking a patent for that innovation. The detailed overview along with a video showcasing the patented “woosh” sound is available online.
“Customers have a lot of choices when it comes to pre-rolls and cannabis products in general and our innovative “Certified Fresh” Nitrogen Sealed products speak to our unique differentiation in product development and our commitment to empowering consumers to enhance life experiences through cannabis,” added Rob Rigg, EVP Marketing at Grown Rogue.
Several companies have approached Grown Rogue to license the Nitrogen Pre-Rolls in other markets across the United States. “Our plan is to license the technology and process to partners in areas where we do not have near term expansion plans,” said Mr. Strickler. “Like Tesla or Apple, we want to launch technologies across the world that positively impact the consumer experience,” added Mr. Strickler.
About Grown Rogue
Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically-integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight based product categorization, to create innovative products thoughtfully curated from “seed to experience.” The Grown Rogue family of products include sungrown, light dep and indoor premium flower, live rosin jars and terp diamonds, infused, indoor and sungrown pre-rolls, live resin and rosin carts, along with chocolate edibles created in partnership with a world-renowned Chocolatier.
Subscribe to Grown Rogue investor news alerts.
- Published in Cannabis, CBD, Grown Rogue, Marijuana, News Home
This Is Why Grown Rogue International Inc. (CNSX: GRIN) Appears Undervalued
Grown Rogue International Inc. (CNSX: GRIN) share price is yet to paint an accurate picture of the company’s tremendous potential amidst improving fundamentals. Investor sentiments in the stock did take a hit if price action in the first half of the year is anything to go by. Wild price swings saw the stock rally by more than 50% before tumbling to all-time lows.
The plunge came as a surprise as it came at a time when the broader cannabis sector was flying high. In addition, the company has been on an impressive run on the execution of its core business affirming growth metrics and the need for a higher valuation in the market.
Sales Growth
Grown Rogue is enjoying its best run when it comes to sales growth. The company reported a record-breaking quarter depicted by 388% YoYo growth in sales that came in at $834,309. At the end of the quarter, the company projected continued growth throughout the year, relying on expansion plans to key cannabis markets of California, Oregon, and Michigan.
The Company did meet its promise of robust growth on reporting a 125% quarter over quarter increase in sales in Q2 that came in at $1.9 million. Sales growth is indicative of brand strength as well as distribution reach, as the company continues to expand its wings into new markets. The company has since grown from controlling just three cannabis licenses to 22 licenses further affirming its multi-state operations.
“To have gained this brand recognition and sales traction, in what is arguably the world’s most competitive legalized cannabis market, bodes very well for our expansion into California and particularly the newly legalized market in Michigan,” said CEO Obie Strickler.
Sales growth looks set to be the order of the day as the company has expanded its footprint into Michigan as part of its growth strategy. Michigan becomes the third state from which the company will operate in addition to Oregon and California.
The expansion should reduce the company’s reliance on one market for growth. It should also shield it from the effects of a downturn in one market.
Gross margins have also shown signs of improvement helped by robust growth in revenues. Gross margin in the recent quarter improved to $0.4 million, a 20% increase. Margins are likely to continue improving as cannabis prices in Oregon show signs of edging higher as demand continues to outpace supply.
Organic Growth
Grown Rogue has also underscored its push for growth at all cost. The acquisition of Decibel Farms affirms push for inorganic growth even as the company continues to refine its internal operations to accelerate organic growth.
The acquisition of Decibel Farms marks an important milestone in the company’s growth strategy. With the acquisition, the company gains access to a valuable asset poised to strengthen its cannabis cultivation and production capacity further.
According to the Chief Executive Officer, Decibel Farms will bolster Grown Rogue manufacturing capacity in Oregon where demand for cannabis products is on the rise. Production capacity could reach highs of 5,400kg by the end of the year with the scaling of cultivation operations.
“We believe that licenses, assets, and operations are of little value without an experienced team that knows how to cultivate quality cannabis products at scale and build meaningful brands. Our team has been building these core competencies for the past 3 years,” added Jacques Habra, Chief Strategy Officer.
Demand for branded products continues to exceed internal production; one of the reasons the company is turning to acquisition to ramp up capacity.
Grown Rogue Price Analysis
While Grown Rogue has lost a significant amount of market value over the past six months, price action activity indicates potential to bounce back from all-time lows. The C$0.20 mark has since emerged as a crucial support level from where bulls appear to be jostling for positions consequently fuelling a bullish momentum.
Given the descending long-term bear trend and the fact that bears appear to be in control, the stock might have to rally and take out the C$0.24 resistance level, for the short-term momentum to turn bullish. A rally followed by a close above the C$0.24 mark could arouse buying pressure from buyers who have been on the fence.
https://ca.finance.yahoo.com/news/grown-rogue-reports-388-growth-111100202.html
https://ca.finance.yahoo.com/news/grown-rogue-announces-proposed-acquisition-124100831.html
https://ca.finance.yahoo.com/news/grown-rogue-second-quarter-revenue-123800178.html
- Published in Cannabis, CBD, Grown Rogue, Marijuana
Crop’s Hempire Increasing Distribution Ownership in California
Momentum Public Relations
Press Release: July 10, 2019
CROP INFRASTRUCTURE CORP. (CSE: CROP) (OTC: CRXPF) (Frankfurt: 2FR) announced today that Hempire has increased its ownership of Flip Distro to 51% for $100,000 in capital expenditures and product marketing at the distribution company.
Increasing the ownership in Flip Distro, in concert with the recently announced acquisition of the Cathedral City dispensary, lounge and California-wide delivery provisional licences, will empower the company to use Flip for a secondary fulfillment centre for delivery logistics.
CROP’s Humboldt Holdings has an option to acquire 100% of Hempire’s interest in Flip at any time it becomes legal and compliant to do so.
Furthermore, the company is currently reviewing multiple locations in Cathedral City for the Emerald Heights flagship store, necessary to perfect and transfer the provisional licences. The company also announces that it has applied for a retail licence in Contra Costa.
CROP CEO, Michael Yorke, stated: “CROP will be able to connect the Emerald Heights Southern California retail provisional licence with Flip Distro’s Northern California distribution license to create a secondary drop point for delivery drivers. CROP and its partners are working hard to create as much value through the supply chain as possible for shareholders.”
About CROP
CROP is publicly listed company trading under symbol CROP.CSE. The company is focused on cannabis branding and real estate assets. CROP’s portfolio of projects includes cultivation properties in California, two in Washington State, a 1,000-acre Nevada cannabis farm, 2,115 acres of hemp CBD farms, and a growing portfolio of common share equity in upcoming listings within the cannabis space.
CROP has developed a portfolio of assets including Canna Drink, a cannabis infused functional beverage line and 16 Cannabis brands.
Company Contact
Michael Yorke – CEO and Director
E-mail: info@cropcorp.com
Website: www.cropcorp.com
Phone: (604) 484-4206
- Published in Cannabis, CBD, CROP Infrastructure, Marijuana, News Home
North Bud Farms Closes Second Tranche of Private Placement Financing
Momentum Public Relations
Press Release: July 3rd, 2019
North Bud Farms Inc. (CSE: NBUD) (OTCQB: NOBDF) (“NORTHBUD” or the “Company”) is pleased to announce the closing of a second tranche of its non-brokered private placement, previously announced on May 15, 2019, for gross proceeds of $1,122,000, by issuing 3,740,000 units at a price of $0.30 per unit. Each unit is comprised of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the Company at a price of $0.40 per share for a period of twenty-four months.
The Company plans to use the net proceeds of the offering to hire additional staff for its Canadian operations, pursue M&A opportunities in the United States, including new state license applications, and for general working capital purposes.
The Company expects to close on the balance of the previously announced private placement of up to $4 million in one or more additional tranches of the offering in the near future, subject to the receipt of all necessary regulatory approvals. All securities issued pursuant to the offering are subject to a four-month hold period in accordance with applicable Canadian securities laws.
About North Bud Farms Inc.
North Bud Farms Inc., through its wholly owned subsidiary GrowPros MMP Inc., is pursuing a licence under The Cannabis Act. North Bud Farms Inc. is constructing a state-of-the-art purpose-built cannabis production facility located on 95 acres of Agricultural Land in Low, Quebec. North Bud Farms Inc. will be focused on Pharmaceutical and Food Grade cannabinoid production in preparation for the legalization of edibles and ingestible products scheduled for October 2019.
For more information visit: www.northbud.com
Neither the Canadian Securities Exchange (the “CSE”) nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking statements
Certain statements and information included in this press release that, to the extent they are not historical fact, constitute forward-looking information or statements (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, “may”, “should” and similar expressions to the extent they relate to the Company or its management. Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the risk factors included in the Company’s final long form prospectus dated August 21, 2018, which is available under the Company’s SEDAR profile at www.sedar.com. Accordingly, readers should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company’s management to predict all of such factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company does not undertake any obligation to update any forward-looking statements to reflect information, events, results, circumstances or otherwise after the date hereof or to reflect the occurrence of unanticipated events, except as required by law including securities laws. This news release does not constitute an offer to sell or a solicitation of any offer to buy any securities of the Company.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
North Bud Farms Inc.
Edward Miller
VP, IR & Communications
Office: (855) 628-3420 ext. 3
investors@northbud.com
- Published in Cannabis, Marijuana, Medical Marijuana, News Home, NorthBud
Grown Rogue Second Quarter Revenue Increases Sixfold Year-over-Year and 125% Quarter-over-Quarter to $1.9M
Momentum Public Relations
Press Release: July 3, 2019
Grown Rogue International Inc. (CSE:GRIN | OTC: GRUSF) (“Grown Rogue” or the “Company“), a vertically-integrated, multi-state cannabis company, with licenses and operations in Oregon, California, and now entering Michigan, has released its financial and operating results for its fiscal second quarter ended April 30, 2019. The Company’s financial statements and management’s discussion and analysis for the period are available on the Company’s SEDAR profile at www.sedar.com or through the Company’s website at www.grownrogue.com. All amounts are expressed in United States Dollars unless otherwise indicated. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures.
Financial Highlights
- Second quarter 2019 revenues increased more than six-fold year-over-year, from $0.3 million to $1.9 million. Quarter-over-quarter revenues increased 125%, from $0.8 million in Q1.
- Adjusted Gross Margin2 was ($0.02) million for the quarter and $0.2 million for the year-to-date. Adjusted Gross Margin was $0.4 million for the second quarter (20%) and $0.8 million for the year-to-date (28%)
- Adjusted EBITDA3 was ($1.0) million for the second quarter.
Management Commentary
“Our second quarter revenue results are indicative of the brand strength and distribution reach we have achieved in Oregon and we are taking the same platform to California and Michigan,” said Obie Strickler, CEO of Grown Rogue. “The proposed acquisition of Decibel Farms announced in April is expected to increase our manufacturing capacity in Oregon where we continue to enjoy record demand for our products. Our California distribution license went into effect during the second quarter with revenues expected to commence this month.”
Grown Rogue expects to increase its combined annual flower production capacity in Oregon and Michiganfrom approximately 5,000 lbs (2,300 kgs) currently, to approximately 12,000 lbs (5,400 kgs) by the end of fiscal year 2019 following the anticipated incorporation of Decibel Farms and scaling of its cultivation operations in Michigan. The increased capacity is inclusive of the 40,000 square feet of greenhouse production capacity in Oregon in the proposed Decibel Farm transaction announced in April 2019. Grown Rogue’s anticipated acquisition of the Decibel brand includes Decibel’s “Loud” branded pre-roll which features a unique “painted on” rosin. Grown Rogue plans to introduce this innovative product in the California market in the third calendar quarter of 2019.
Qualitative Performance Factors
“We believe that licenses, assets, and operations are of little value without an experienced team that knows how to cultivate quality cannabis products at scale and build meaningful brands. Our team has been building these core competencies for the past 3 years,” added Jacques Habra, Chief Strategy Officer.
Grown Rogue has received recognition at regional cannabis competitions for “Highest Percentage THC”, “Highest Percentage Terpenes”, as previously announced in a press release on January 8, 2019. This recognition for cultivation excellence are the foundation of the Grown Rogue products that the company intends to bring to California and Michigan.
Grown Rogue current multi-state presence
Well-established in Oregon, Grown Rogue has expanded into California and its third state, the highly populated, limited-license state of Michigan through a partnership agreement
Oregon Operations
- Cultivating 130,000 sq. ft. of canopy in Oregon (including Decibel Farms) including three outdoor and greenhouse farms and a state-of-the-art indoor facility
- Increased outdoor yield from 2018 to 2019 by over 50%
- Increasing market penetration and sales revenue
California Operations
- Expanded into California with a 16,000-square-foot microbusiness facility in Eureka with retail, processing and distribution licensing partnership spanning San Francisco to Los Angeles.
- Secured state and local approval for distribution license and type 6 manufacturing (non-volatile), and local approval for type 7 manufacturing (volatile).
Michigan Operations
- Subsequent to the close of the second quarter a binding LOI was signed to acquire Michiganoperator “Inferno Gardens Inc.” which includes one retail dispensary (referred to as provisional centers in Michigan), a 24,000 sq ft indoor cultivation facility, and a processing/manufacturing center. First sales are anticipated to begin in early 2020.
- As a result of this new agreement with Inferno Gardens originally disclosed in a press release on July 2, 2019, Grown Rogue has elected not to move forward with a previously announced option to acquire alternative Michigan operations as previously announced in a press release on February 25, 2019.
Selected Financial Information (Complete financial tables have been filed on www.sedar.com)
Three Months |
||
Period Ended April 30, |
2019 |
2018 |
(in $000s except per share amounts) |
||
Revenue |
1,885 |
291 |
Adjusted Gross Margin2 |
376 |
(42) |
Adjusted EBITDA3 |
(969) |
(631) |
Net loss |
(1,648) |
(1,097) |
Net loss per share |
(0.02) |
(0.29) |
Cash |
323 |
497 |
Weighted Common Shares Outstanding |
71,891 |
3,774 |
Second Quarter 2019 Financial Overview
Grown Rogue revenue grew to $1.9 million, a 548% increase from revenue of $0.3 million in its second fiscal quarter ended April 30, 2018, and a 125% increase on a consecutive quarterly basis from $0.8 million in Grown Rogue’s first quarter of fiscal 2019. Organic sales growth are driven through the internal sales force, third party distribution, and strengthening of the Grown Rogue brand.
F2019 Q2 Adjusted Gross Margin2 was $0.4 million, or 20% of revenues, a substantial improvement from Adjusted Gross Margin of ($0.04) million for the same period last year. Adjusted Gross Margin improved as a result of the efforts of the Company over the past year to refine its cultivation processes to be more efficient, resulting in lower cost of sales, while also increasing revenue.
General and administrative expenses were $1.3 million for the second quarter of fiscal 2019, compared to similar expenses of $0.6 million for the second quarter of fiscal 2018. The increase in expenses was primarily related to the expanded scope of operations and associated sales, general and administrative support. Grown Rogue’s Adjusted EBITDA3 amounted to ($1.0) million for the three months ended April 30 2019, compared to ($0.6) million for the three months ended April 30, 2018. The increased loss was primarily attributable to infrastructure investments required to support the company’s growth plans.
The Company’s cash and cash equivalents position was $0.3 million as at April 30, 2019. Subsequent the second quarter the Company completed a CAD $1.5 million debenture financing.
Subscribe to Grown Rogue investor news alerts.
About Grown Rogue
Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically-integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight based product categorization, to create innovative products thoughtfully curated from “seed to experience.” The Grown Rogue family of products include sungrown, light dep and indoor premium flower, live rosin jars and terp diamonds, infused, indoor and sungrown pre-rolls, live resin and rosin carts, along with chocolate edibles created in partnership with a world-renowned Chocolatier.
NOTES:
1. |
|
The Company’s “Cost of sales, less effects of fair value adjustment of biological assets converted to inventory” is a non-IFRS measure that does not have any prescribed meaning by IFRS and that may not be comparable to similar measures presented by other companies. As the Company’s biological assets are developed towards a state where they can be harvested and processed into saleable inventory, the carrying value of these biological assets are adjusted to fair value as at each financial reporting date. Once the biological assets are transferred to inventory based on this value, these fair value adjustments form a component of the value of the inventory, which is subsequently recorded as cost of sales upon final sale. The Company’s cost of sales, less effects of fair value adjustment of biological assets converted to inventory measure attempts to remove these fair value adjustments from cost of sales. The Company believes that this is a useful metric to evaluate its operating performance. |
2. |
|
“Adjusted Gross Margin” is the result of deducting “Cost of sales, less effects of fair value adjustments of biological assets converted to inventory” from revenue for the period. |
Three months ended |
||
April 30, 2019 |
April 30, 2018 |
|
$ |
$ |
|
Revenue |
1,885,115 |
291,026 |
Cost of sales, less effects of fair value adjustments |
(1,509,462) |
(333,472) |
Adjusted Gross Margin |
375,653 |
(42,446) |
3. |
|
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is not a recognized performance measure under IFRS. The Company defines Adjusted EBITDA as the Company’s net income (loss) for a period, as reported, before interest, taxes, depreciation and amortization, and is further adjusted to remove transaction costs, stock-based compensation expense, accretion expense, gain (loss) on derecognition of derivative liabilities and the effects of fair-value accounting for biological assets and inventory. The Company believes that this is a useful metric to evaluate its operating performance. The following is a reconciliation of the Company’s net income (loss) to Adjusted EBITDA. |
Adjusted EBITDA Reconciliation |
Three months ended |
||||
April 30, 2019 |
April 30, 2018 |
||||
$ |
$ |
||||
Net loss, as reported |
(1,648,446) |
(1,097,275) |
|||
Add back costs of goods sold, net of the unrealized gain on |
1,902,389 |
376,997 |
|||
Less cost of sales, less effects of fair value adjustments of |
(1,509,462) |
(333,472) |
|||
(1,255,519) |
(1,053,750) |
||||
Add back accretion expense, as reported |
12,886 |
30,066 |
|||
Add back amortization of intangible assets, as reported |
8,821 |
4,295 |
|||
Add back amortization of property and equipment, as |
163,801 |
132,922 |
|||
Add back stock-based compensation expense, as reported |
112,080 |
– |
|||
Add back interest expense (recovery), as reported |
(10,772) |
255,109 |
|||
Add back transaction costs |
– |
– |
|||
Less gain on derecognition of derivative liability, as reported |
– |
– |
|||
Adjusted EBITDA |
(968,703) |
(631,358) |
|||
FORWARD LOOKING STATEMENTS
This press release contains statements which constitute “forward‐looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward‐ looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and include information regarding: (i) statements regarding the future direction of the Company (ii) the ability of the Company to successfully achieve its business and financial objectives, (iii) plans for expansion of the Company into Michigan and securing applicable regulatory approvals, and (iv) expectations for other economic, business, and/or competitive factors. Investors are cautioned that forward‐looking information is not based on historical facts but instead reflect the Company’s management’s expectations, estimates or projections concerning the business of the Company’s future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward‐looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward‐looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; and in particular in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; or adverse changes in the application or enforcement of current laws; compliance with extensive government regulation and related costs, and other risks described in the Company’s public disclosure documents filed on www.sedar.com.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward‐looking information except as otherwise required by applicable law.
Safe Harbor Statement:
This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company’s financing plans; (ii) trends affecting the Company’s financial condition or results of operations; (iii) the Company’s growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend” and similar expressions and variations thereof are intended to identify forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date hereof. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk disclosed in the Company’s Form 20-F and 6-K filings with the Securities and Exchange Commission.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational cannabis marketplace in the United States through its indirect operating subsidiaries. Local state laws where its subsidiaries operate permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are disclosed in the Company’s Listing Statement filed on its issuer profile on SEDAR at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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SOURCE Grown Rogue International Inc.
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Contact:
For further information on Grown Rogue International please visit www.grownrogue.com or contact: Obie Strickler, Chief Executive Officer, obie@grownrogue.com; Jacques Habra, Chief Strategy Officer, jacques@grownrogue.com; Investor Relations Desk, Inquiries, invest@grownrogue.com
- Published in Cannabis, Grown Rogue, Medical Marijuana, News Home
Grown Rogue Reaches Binding Agreement for Michigan Cultivation, Processing, and Dispensary on West Side
Momentum Public Relations
Press Release: July 2, 2019
Grown Rogue International Inc. (CSE:GRIN | OTC:GRUSF) (“Grown Rogue” or the “Company“), a vertically-integrated, multi-state cannabis company with licenses and assets in Oregon, California, and now entering Michigan, announced today a binding agreement (“Agreement”) to expand further into Michigan through a new strategic acquisition and partnership with experienced cannabis operators in Muskegon. The partnership is with Inferno Gardens, Inc (“Inferno Gardens”), whose assets include the local approval for one retail dispensary (referred to as provisional centers in Michigan) and a 24,000 sq ft indoor manufacturing facility that will include both cultivation and processing when fully constructed. State licensing is in progress and expected to be completed in the coming months. The facility is approximately 40% constructed and expected to be fully operational within 120 days. Final acquisition and partnership is subject to Michigan regulatory approval and full licensing of Grown Rogue at the state level.
The terms of the Agreement include the following provisions:
- Grown Rogue obtains the option to acquire a 51% ownership of Inferno Gardens, subject to state regulatory approval, for a one-time payment of $250,000 due upon the signing of the definitive agreement with a deposit of $50,000 submitted in conjunction with the execution of the Agreement;
- Grown Rogue will provide up to $2MM in financing as a loan for development and operational build-out of the cultivation, processing, and dispensary centers of which Grown Rogue will be paid back under an established schedule;
- Grown Rogue will have the right to purchase the remaining 49% of Inferno Gardens for either stock or cash or a combination of both at the earlier of Grown Rogue stock reaching $1.00 / share on the Canadian Securities Exchange for a period of 10 consecutive days or 24 months from signing the Definitive Agreement. Unless Inferno Gardens permits, Grown Rogue may not exercise this option for a period of 12 months following the signing of the definitive agreement.
- Grown Rogue will also issue 900,000 common shares to Inferno Gardens based on milestones including signing of definitive agreement, production of 500 lbs of dried cannabis flower and achieving $3,000,000.00 in top line revenue.
“The cultivation facility, pending all regulatory approval, is targeted to be fully operational by the end of the fourth quarter of this year with first revenue anticipated in early first quarter of 2020,” explained Obie Strickler, Grown Rogue CEO. “Given that current Michigan market rates for quality cannabis flower fetches around $3000/lb, this new revenue source bodes well for our company’s revenue targets. We are excited to partner with Jesse and the rest of his team at Inferno Gardens and bring our proven business model and brand to the Michigan market. “
The binding Agreement also considers the appointment of Inferno Gardens leadership to a management role for oversight of the development and operation of the Michigan facilities. Plans for the dispensary and processing facility are slated for launching in early 2020.
The Company believes the Muskegon location is ideal with the facilities positioned on a popular corridor that see millions of locals and visitors passing through each year en route to Lake Michigan.
“Our positive relationship with the City of Muskegon and local community has been very helpful in advancing our licensing and development initiatives,” shared Mr. Jesse Sproat, CEO of Inferno Gardens. “The partnership with Grown Rogue adds tremendous credibility and allows us to accelerate our go to market plans.” According to the Detroit Free Press, A significant portion of Muskegon County as well as several neighboring Counties have opted out of the cannabis program in Michigan. (1) “Since Muskegon is such a popular destination for locals and tourists, our vertically integrated operation will soon be online to cater to the growing consumer base enjoying Michigan State Parks,” added Mr. Sproat.
Michigan is the 2nd largest medical cannabis population in the United States with the highest per capita medical patient registrations. The State passed the recreational vote in November 2018, and expects a minimum of two years to fully convert the regulations to be in compliance for recreational adult use.(2)
“Our facility in Muskegon will have the capacity to produce approximately 4,000 lbs (~1814 kg) yearly of premium cannabis. This translates to $13-14 million in yearly revenue using today’s average market prices in Michigan,” stated Jacques Habra, Chief Strategy Officer of Grown Rogue. “We expect demand for high quality cannabis products in Michigan to continue to oustrip supply for many years.”
About Grown Rogue
Grown Rogue International (CSE: GRIN | OTC: GRUSF) is a vertically-integrated, multi-state Cannabis family of brands on a mission to inspire consumers to “enhance experiences” through cannabis. We have combined an expert management team, award winning grow team, state of the art indoor and outdoor manufacturing facilities, and consumer insight based product categorization, to create innovative products thoughtfully curated from “seed to experience.” The Grown Rogue family of products include sungrown, light dep and indoor premium flower, live rosin jars and terp diamonds, infused, indoor and sungrown pre-rolls, live resin and rosin carts, along with chocolate edibles created in partnership with a world-renowned Chocolatier.
- Published in Cannabis, Grown Rogue, Marijuana, News Home