Canadian producer WeedMD Inc. (TSX-V: WMD) says brighter days are ahead after it completed planting 18,000 cannabis clones at its 27-acre outdoor field.
The Toronto-based company maintains a bullish outlook despite also reporting this week a scant $2.85 million in net revenue for the fourth quarter ending Dec. 31.
The weed firm says revenue for the next three-month period will improve to a record $12 million because it will include sales from Starseed Holdings, a private medical cannabis company it acquired in December.
WeedMD said it expects to file its first-quarter earnings by mid-July, which it said will also be buoyed by strong growth from adult-use and medical channels, and significant outdoor biomass sales. Due to Covid-19 pandemic-related challenges, financial regulators have allowed publicly-traded companies to delay filing their earnings reports. WeedMD was granted a 45-day exemption, which is why it is only now reporting its Q4 results.
“We are seeing the benefits of our fully-integrated business model in the first quarter of 2020 with record preliminary net revenues of $12 million,” said WeedMD CFO Lincoln Greenidge said in a statement. “Our integrated cultivation, extraction and fulfilment operations will enable us to produce low-cost, quality cannabis to create an assortment of high-margin finished products, which should significantly enhance our profitability over the remainder of the year.”
Mother Nature do your thing! We’re officially done planting #cannabis outdoors. 1/3 of the crew used last year put in 18K plants in 1/3 of the time. Also provided a CX Industries update. Lots of biomass in extraction for our medical vapes launching Jun. 22 https://t.co/rxoYa8FFx0 pic.twitter.com/erxocXogpE
— WeedMD (@WeedMD) June 12, 2020
The company reported an adjusted earnings before interest, taxes, depreciation, and amortization loss of $8.2 million, and a net loss of $7.2 million in the fourth quarter.
But WeedMD says being one of only a few licensed producers in Canada entering its second year of outdoor operations will also present future advantages and profits.
Read more: Outdoor cannabis licences almost double
In November 2019, WeedMD reported its first outdoor harvest yielded 8,950 kilograms of cannabis biomass for at production cost of approximately $0.11 per gram.
The company confirmed that its CX Industries extraction hub in Ontario is now fully operational and will convert its low-cost outdoor production into value-add formats.
WeedMD said it will launch new vape products into its medical channels this month and into the adult-use market in the third quarter. More details will be released on June 22, the company said.
“The ability to effectively cultivate cannabis outdoors optimizes our yields for cost-efficient production to develop products with greater commercial sales value,” CEO Angelo Tsebelis said in a separate statement. “Over the past few months, our cultivation team has made significant headway in boosting outdoor efficiencies, selecting seven optimal outdoor strains and propagating over 18,000 cannabis clones now fully rooted and planted.”
The CX facility will be able to process over 50,000 kilograms of biomass a year at peak production, providing tolling and white labelling opportunities to other producers and brands, the company said.
Appointing CFO Lincoln in April has helped steer its business into a more promising direction, WeedMD said.
“Lincoln brings over 20 years of corporate finance, capital markets as well as mergers and acquisition experience and is leading the company’s financial integration and strategic shift to commercialize WeedMD’s cultivation platform,” read the company statement.
The Thursday Morning Edition of By the Numbers $WMD @WeedMD. As suspected the company is cleaning up the mess of prior management. Revenue numbers in the next 4 quarters should trounce that of the past 4 quarters. #PotStocks pic.twitter.com/88djyPbAF6
— Betting Bruiser (@BettingBruiser) June 11, 2020
Top image via WeedMD