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TORONTO, Nov. 26, 2018 – 48North Cannabis Corp. (“48North” or the “Company“) (TSXV:NRTH), a leading licensed cannabis producer focused on next-generation cannabis products, has released its financial and operating results for the quarter ended September 30, 2018. The Company’s financial statements and related management’s discussion and analysis for the period are available on the Company’s SEDAR profile at www.sedar.com and on the Company’s website at www.48nrth.com/investor/
Financial and Operating Highlights for Fiscal Q1 2019
- Revenue growth with total first quarter revenue of $1.3 million and Adjusted EBITDA of $606 thousand during Q1 2019
- Wholesaled dried cannabis to other licensed producers to maximize near-term revenue
- Received license to extract and produce cannabis oil at the Company’s Kirkland Lake, Ontario facility
- Announced entering into licensing partnership with Mother & Clone, Inc. (“Mother & Clone”), a Colorado-based company that produces proprietary cannabis sublingual nanosprays
- Completed Phase 1 and began Phase 2 of testing towards selection and cultivation of the Company’s top cultivars
Events subsequent to year-end
- Entered into letter agreement with 2599708 Ontario Inc. (“Good & Green”) to acquire 100% of the issued and outstanding common shares of Good & Green in an all-share transaction valued at $18.0 million (the “Acquisition”). The Acquisition is expected to close on November 30, 2018. Prior to the letter agreement, 48North entered into a supply agreement with Good & Green for 6,000 kilograms of organically sun-grown, dried cannabis for $1.5 million.
- Launched non-brokered private placement for minimum gross proceeds of $10.0 million. The financing provides capital and liquidity to support 48North’s continued expansion. This includes; the development of a new 100-acre low-cost outdoor production farm, large-scale extraction capabilities, an increase in indoor production capacity, and the rapid development of innovative next generation cannabis products.
“We approached fiscal 2019 with a clear focus to lead the development and distribution of next-generation cannabis products,” said Alison Gordon, Chief Executive Officer at 48North. “We achieved several milestones over the past months, and subsequent to the quarter entered into a binding letter agreement for the transformational acquisition of Good & Green, entered into an exclusive licensing agreement with Mother & Clone, and launched a non-brokered private placement for minimum gross proceeds of $10 million.”
“Our strong business performance throughout the quarter increased revenue and positive Adjusted EBITDA of $606 thousand,” continued Ms. Gordon. “Funds raised in our most recent financing round will be used towards rapidly advancing 48North’s business plan. Following the acquisition of Good & Green, 48North is well positioned to be a market leader in low-cost organic cannabis production and the development of best-in-class, next generation cannabis products.”
Selected Financial Information for Three-Months Ended September 30, 2018
|All amounts are expressed in Canadian dollars|
|September 30, 2018||September 30, 2017|
|Net and comprehensive loss||(1,011,070)||(1,480,320)|
|Cash on hand||9,815,083||12,231,484|
*Adjusted EBITDA is a non-IFRS measure and defined as earnings before interest, tax, depreciation and amortization, and stock-based compensation expense, and is not a recognized measure for financial statement presentation under IFRS. Adjusted EBITDA is not intended to be considered as an alternative to net earnings, cash flow from operations, or any other measure of performance prescribed by IFRS. The Company’s Adjusted EBITDA may also not be comparable to Adjusted EBITDA used by other companies, which may be calculated differently. The Company considers Adjusted EBITDA to be a meaningful measure to assess its operating performance in addition to standardized IFRS measures. It is included because the Company believes it can be useful in measuring its ability to fund capital expenditures and expand its business.