Increase Demand for its Premium Cannabis Provides 2019 proj GTEC is pleased to announce that it has been receiving significant demand for its premium cannabis, and provides insight into its current sales initiatives and projections.
Summary of sales:
$5.86 average selling price of flower shipped in bulk to wholesale buyers
Products are re-packaged by certain buyers and sold under GTEC’s flagship medical brand, GreenTec™
$1.11 per gram current estimated cash cost of production (for B2B wholesale - excluding depreciation and amortization)
81% estimated gross margin on products sold (excluding depreciation and amortization)
Secured agreements with confident forward sales outlook for all 2019 production output
Estimating to produce and sell approximately 2.5 million grams of flower in 2019
Estimating $12.5 million in 2019 sales
Estimating to produce and sell 14 million grams of flower in 2020
GreenTec™ continues to be the #1 selling product on CannMart, year to date
Unprecedented strain-specific THC content up to 24.3% on its indoor flower (for Cold Creek Kush)
Currently producing premium quality indoor flower, with ultra-premium flower to commence harvesting in Q3 2019
In supply negotiations with several of the “Top 5” Canadian publicly traded LP’s
"We set out a mandate and vision to our shareholders, that we are extremely confident targeting the premium segment of the market and that we possess the operational expertise to execute this vision," said Norton Singhavon, Founder, Chairman and CEO of GTEC. "Within a very short timeframe, we have demonstrated our ability to produce, market and distribute a premium cannabis product with a robust sightline into future sales. We look forward to our other facilities and future genetics coming online in the near future."
With its Alberta Craft Cannabis (“ACC”) subsidiary in full production mode, GTEC has multiple B2B sales arrangements for its indoor grown premium quality cannabis. The Company has experienced significant demand for its cannabis flower products, which has led to favourable selling prices and gross margins.
According to CannMart, the Company’s flagship medical brand GreenTec™, had previously become #1 selling product on medical cannabis marketplace www.cannmart.com, and year to date, it continues to be. CannMart is an online medical e-commerce marketplace, wholly owned subsidiary of Namaste Technologies; (TSX-V:N) (M5BQ.F) (NXTTF). GTEC has established a similar selling arrangement with CannaFarms (a wholly owned subsidiary of Vivo Cannabis) (VIVO.V) (VVCIF) and Pure Global Cannabis (PURE.V) (PRCNF) (1QS.F). The Company has also been in negotiations with several of the “Top 5” largest (by market capitalization) Canadian publicly listed cannabis companies on finalizing further supply agreements to increase exposure into various medical and recreational platforms.
GTEC has achieved an average weighted selling price of $5.86 per gram for all the bulk cannabis products it has sold since November 2018. The Company estimates that its cash production costs at ACC are approximately $1.11 per gram (excluding depreciation and amortization). Therefore, GTEC’s current wholesale cannabis transactions are providing attractive margins to the Company. Based on the Company’s research into other Licensed Producers, it believes that it has set an unprecedented record for THC percentages on its Cold Creek Kush cultivar of 24.3% for flower.
Subject to Tumbleweed and Grey Bruce receiving the necessary regulatory approvals to commence cultivation during this calendar quarter (in which the Company remains confident of this timeline), the Company estimates producing 2.5 million grams of its premium indoor flower (not including trim) over the course of 2019. Based on the Company’s current average whole selling price of $5.86, and accounting for year-end inventory not ready for sale, GTEC expects to generate over $12.5 million in gross sales for 2019.
With the proceeds of the recently announced $12.5 million financing, the Company anticipates that by Q4 2019, it will be in full production of 14 million grams of premium indoor flower and achieve a full year of production for 2020, in which it is fully funded to execute on.
The Company anticipates that its existing sales relationships, and the planned launch of its own recreational brands, will fully utilize its current and projected cannabis production for the remainder of 2019, including its line of ultra-premium indoor flower which will commence harvesting in Q3.
GTEC Share Issuance – F-20
The Company would like to announce that as of March 18, 2019, 3PL Ventures Inc. (“3PL”), its joint venture company established together with F-20 Developments Corp. (“F-20”), received an aggregate of $5,614,138.12 by way of shareholder loan from F-20. The funds will be used to complete the retrofit of a premium indoor cultivation facility in Vernon, BC (the “Production Facility”). To date, 3PL has expended approximately $5,020,871 in connection with the construction and retrofit of the Production Facility.