Delta 9 Cannabis Inc DLTNF

Highlights from this morning's Call!

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The Company is currently undertaking license applications in additional Canadian markets and we highlight the Quebec market as our next key plan market entry, as well as exploring international distribution opportunities in markets like Australia, Israel and Latin America to expand our distribution potential into 2022.

The Uncle Sam’s retail cannabis stores have demonstrated significant revenue, EBITDA and earnings growth over 2020 and 2021. We do expect that this transaction will be accretive to the Company in 2022 and 2023 before synergies, while the acquisition represents an attractive revenue multiple of approximately 0.68 times annualized revenue. The combination of Uncle Sam’s Cannabis stores and Delta 9’s existing store network will make Delta 9 a leading retailer of cannabis products in Canada.

To-date, we have licensed over 15 third-party facilities, representing over 150 Grow Pods for micro cultivation partners across Canada. We will continue to pursue and expand on these B2B revenue opportunities over the coming year. We are also continuing our pivot to expand our sales and marketing efforts for this B2B segment in the United States, and we anticipate to see larger growth from our U.S. B2B sales in 2022, and beyond as this pivot starts to take effect.

The Company has already used a portion of these facilities to repay its credit facilities with Canadian Western Bank, and we expect to repay our convertible debentures on the maturity date of July 17, 2022.

Total grams sold in our wholesale segment in the quarter reached a record 2.2 million grams, up from 1.2 million grams in the last quarter.

Our average cart size appears to be stabilizing around the $42 to $43 per transaction level. Including our investor webpage retail store and medical clinic, Delta 9 now sees well over 1 million unique webpage visitors to our websites each year.

And in the upcoming quarters, we will focus on three main initiatives to drive revenue growth: firstly, a continued expansion of the Company’s retail store chain, while continuing to market our price-leading strategy to generate customer acquisition at new and existing company stores; second, building continued momentum in the cannabis wholesale segment with a focus on expanding product distribution in our 6 provincial markets, as well as adding new markets and expanding in the bulk wholesale market as well; and expanding B2B revenues through a focus on creating relationships in the Canadian micro cultivation industry and expansion into emerging markets, such as the United States.