Speakeasy Cannabis Club Ltd SPBBF

Speakeasy Cannabis Club Ltd is a producer of cannabis in Canada. It operates in a single segment that is the cultivation and sale of cannabis biomass.

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Speakeasy Cannabis Club Ltd

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Post by CANNABISCANADAon Mar 25, 2022 1:56pm

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Post# 34546279

Its going to take a few quarters ti fix this mess

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Speakeasy Cannabis Club Ltd. (EASY.CN)

Canadian Sec - Canadian Sec Real Time Price. Currency in CAD

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As of March 2 03:07PM EDT. Market open.

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6 days ago

Part one on the SpeakEasy shareholders letter

ROCK CREEK, BC – March 18, 2022 - SpeakEasy Cannabis Club Ltd. (CSE: EASY) (Frankfurt: 39H) (the “Company” or “SpeakEasy”), a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act wishes to provide an update to its shareholders.

Introduction

We would like to take this opportunity to provide an update and communicate to our Shareholders the Company’s path forward. Over the last couple of weeks, we have received emails, phone calls and messages raising concerns over the general health and direction of the Company.

We understand your frustration, this time has been extremely challenging for everyone, but we are working tirelessly through this phase to find solutions.

Your concerns have not gone unheard. We have categorized the most frequently asked questions into 4 segments: Current Operations, Cash Flow Constraints, Why Was SpeakEasy Been Halted, and Corporate Restructure.

Each segment will answer any questions to our best abilities, without releasing material, undisclosed information.

Current Operations

With the issuance of the press releases issued in February, 2022, these do not impede the Company’s ability to perform its daily operations. It is business as usual at the Cannabis Complex facility at Rock Creek.

The SpeakEasy team has been and will continue to work on, processing purchase orders to meet monthly demands and shipping deadlines. We’re excited to have started 2022 with a milestone achievement of increasing our sales by 100% from the previous month (see Press Release, February 11, 2022). Based on our sales projections, with no additional vendors, SpeakEasy anticipates to continue with a healthy revenue stream and strong profit margins through to the summer of 2022.

As we navigate through this difficult time, our team has taken a more aggressive approach to product innovation, accepting new vendors and opening doors to international sales.

It is unfortunate that this halt came at a time where our monthly sales are increasing month over month. We hope that news of uninterrupted sales is a silver lining that brings a small comfort to our investors during this time.

We have started operations in our new 13,300 sq ft growing facility. Previously, our craft cannabis sales were capped due to capacity limitations, however, the additional facility will allow for the production of up to 350 KG of output per month.

Our craft cannabis sales were consistently sold out through 2021 based on capacity, and our current purchase orders have spoken for 100 KG of craft flower for the foreseeable future.

Our team has initiated the processing of the 2021 harvest into concentrates and production will continue to run at capacity.

Lastly, the Company is not now, nor does it have any plans in the near future, to file for bankruptcy.

Cash Flow Constraints

Although our industry is growing, we see many companies struggling with sales and cutting operating costs to free up their capital. The lack of traditional financing opportunities poses great challenges, especially when it comes to a business like ours.

The lack of traditional financing options means that we’re strictly reliant on sales to our vendors. Payment terms in our industry can mean that two slow months of sales turns into half a year without cash coming in. As our outdoor facility has only been licenced since April of 2020, and our extracts sales licence was granted in September of 2021, you can see how these delays would impact our business.

Cash flow constraints come with tough decisions. Our collective decision was to keep our production and output consistent and remain focused on B to B sales for the time being.

As many companies are experiencing similar pain points, new businesses are emerging to address these challenges in our sector such as invoice factoring and cannabis industry specific lenders.

Business development’s key focus has been proactively building relationships with these emerging companies. We understand the cash-flow constraints of today but also recognize them for future phases of business growth.

The Company is committed to exploring new financial tools while building strong relationships with other service providers to ensure we can scale our business into the next phase when the time is right.

As our purchase orders are being processed and new relationships are being secured, we anticipate our cash constraints being eased over the next few quarters