/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S.
WIRE SERVICES/
277 Per Cent YOY Growth with Continued
Expansion and Diversification
WINNIPEG, Aug. 29, 2018 /CNW/ - DELTA 9 CANNABIS INC.
(TSXV:NINE) ("Delta 9" or the "Company") today announced its
financial and operational results for the second quarter of fiscal
2018, ended June 30, 2018.
Highlights
- Revenues of $715,746 and
$1,047,853 - up 277% and 210%
respectively - for the 3 month and 6 month period ending
June 30, 2018 versus the same period
in the prior year
- Gross Profit of $663,440 and
$866,135 - up 172% and 215%
respectively - for the 3 month and 6 month period ending
June 30, 2018, versus the same period
in the prior year
- The Company made a $3,000,000
Investment to acquire 50 per cent of the 70,000 square foot
Delta West cannabis production
facility in Calgary, Alberta,
which it operates in partnership with Westleaf Cannabis, primarily
to supply the cannabis market in Alberta
- The Company signed a 2,300 kg supply agreement with the
Manitoba Provincial Government
- The Company came to terms on a $12,000,000 credit facility with a Tier 1
Canadian chartered bank, providing Delta 9 with additional capital
for operations and expansion. The closing of such credit facility
remains subject to due diligence
- The Company signed a Memorandum of Understanding with US
biotech firm Nanosphere Health Sciences ceding the Master License
in Canada for Nanosphere's
patented delivery system for cannabis
- The Company is currently completing work necessary to acquire
the European Union "Good Manufacturing Practices" (GMP)
Certification in order to initiate exports of medical cannabis to
Germany
- The Company executed its option to acquire the land on which
its current facility is located, as well as neighbouring property,
giving Delta 9 the capacity to expand to more than 2 million square
feet
Management Commentary
"This has been a pivotal period for Delta 9 as we prepare for
full legalization of recreational cannabis in Canada," said CEO John
Arbuthnot. "From our perspective, the real race for primacy
in the Canadian cannabis market begins on October 17, and for this reason, our focus has
been to position our company for rapid growth in the
post-legalization era. To this end, we acquired one of only four
licenses for retail in our home province of Manitoba; invested in an expansion in
Alberta and Saskatchewan through our partners at Westleaf;
acquired the exclusive license for the cannabis delivery system
developed by Nanosphere; and signed a major supply agreement with
the Province of Manitoba."
Arbuthnot says agreeing to the terms of a debt financing at
favourable terms with a Tier 1 Chartered Bank was another important
step in the Company's development. "We were already well financed
for our current phase of expansion, but this $12 million dollar financing allows us to expand
readily into other areas, including our exports into Europe. Delta 9 is building a company that is
both vertically and horizontally integrated, with a healthy
footprint across Canada, and the
ability to make inroads into the global market."
Arbuthnot says the other major initiative for Delta 9 was to
increase the Company's access to the Canadian and global markets.
"It's not just a matter of how much cannabis you can produce. It's
also about how much you can sell, and market access is critical.
Our moves to acquire supply agreements, to acquire retail licenses,
to achieve Preferred Supplier status with Pharmasave, and to
acquire an export partner in Germany will be key drivers of our
post-legalization revenues. Additionally, we are now moving heavily
into research and development with our partners at Nanosphere,
developing new and advanced products that are unique in the
industry for both the medical and recreational markets."
Expansion
Delta 9 continues to expand its production
capacity in Winnipeg in a project
that remains ahead of schedule and under budget. The Company
anticipates that the $16 million
expansion will see production capacity increase to 17,500 kilograms
of cannabis per year by the end of 2019. The Company also acquired
lands adjacent to its current property, giving Delta 9 the ability
to increase capacity to more than 2 million square feet of
production space.
Additionally, Delta 9 owns 50 per cent of the 70,000 square foot
Delta West facility in Alberta, which is expected to provide an
initial increase of 4,000 kilograms of cannabis to the Company's
annual production.
Financial review Q2 2018
A comprehensive discussion of
Delta 9's financials and operations are provided in the Company's
Management Discussion & Analysis and Financial Statements which
have been filed on www.sedar.com.
About Delta 9 Cannabis Inc.
Delta 9's wholly-owned
subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of
medical marijuana pursuant to the ACMPR and operates an 80,000
square foot production facility in Winnipeg, Manitoba, Canada. Delta 9's shares
trade on the TSX Venture Exchange under the symbol "NINE".
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.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the Company's future business plans and other matters.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. Forward
looking statements in this news release include statements relating
to: (i) Delta 9's expansion plans; (ii) Delta 9's production of
cannabis; (iii) the closing of Delta 9's credit facility with a
Tier 1 Canadian chartered bank; (iv) the legalization of
recreational cannabis in Canada;;
and (v) Delta 9's research and development plans. Such statements
are subject to risks and uncertainties that may cause actual
results, performance or developments to differ materially from
those contained in the statements, including that Delta 9's
currently contemplated expansion and development plans may cease or
otherwise change, Delta 9's production of cannabis may be lower
than expected, Delta 9 may not obtain the required approvals from
Health Canada, demand for Delta 9's products may be lower than
anticipated, Delta 9's cost to produce its grow pods may be higher
than expected and all other risk factors set forth in the annual
information form of Delta 9 dated May 31,
2018 which has been filed on SEDAR. No assurance can be
given that any of the events anticipated by the forward-looking
statements will occur or, if they do occur, what benefits the
Company will obtain from them. Readers are urged to consider these
factors carefully in evaluating the forward-looking statements
contained in this news release and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in
their entirety by these cautionary statements. These
forward-looking statements are made as of the date hereof and the
Company disclaims any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
SOURCE Delta 9 Cannabis Inc.
