Hundreds of Manitobans from all age groups lined up outside the Delta 9 Cannabis Store at 827 Dakota Street in Winnipeg on Wednesday, October 17 to purchase cannabis legally for the first time in almost 100 years.
The first customer went through the doors at 10 a.m. and the lineup lasted until closing time 12 hours later. The response was overwhelming to even the most optimistic of predictors.
“We want to say a big thank you to everyone in Manitoba who came out to support us,” said Delta 9 CEO John Arbuthnot, who was in the crush of the action when the first customers came through the door. “We were just blown away by the response. We were expecting maybe 20 to 30 people lined up for the opening, maybe a slow trickle through the day. It was crazy, surpassing even our wildest expectations.”
Arbuthnot was also shopping online when Delta 9 Internet sales began at midnight sharp. He tried to place the first order but ended up being order number 90 of 600. Over 500 orders were placed within the first hour.
“The online sales demand was amazing,” said the 28-year-old CEO, who started Delta 9 as a school project in 2009. “We had hundreds and hundreds of orders by 2 a.m. We were sold out by 4 a.m. and had to restock. It was incredible.”
Marshall Posner, VP of Marketing at Delta 9, said the overwhelming response was partly due to their grassroots marketing campaigns.
“We tried to go wherever the people interested in cannabis were for years,” said Posner. “We listened to what Manitobans had to say and answered their questions whenever we could. If we couldn’t answer a question, we went looking for the answer. The collective wisdom of Manitobans was a big help to us when we were developing our products and services and our first store. Manitobans are very intelligent cannabis consumers and they provided us with a lot of insightful advice.”
Long-time cannabis advocate Steven Stairs camped outside the Dakota Street store the night before opening day and by 10 a.m. he was the first person in a lineup that had snaked around the corner and coiled itself up and down the adjacent alley.
“As a cannabis advocate, I need to be up to date and informed with the most current information,” said the 34-year-old Stairs. “Whether that’s legalization, medical aspects, stores, openings times, prices. I chose to be here because Delta 9 has earned my respect over the last five years. They’ve done great things for Manitoba and the economy. And they’re a Manitoba-made company, which makes me even more supportive.
“I’ve developed a rapport with a lot of the employees. They make me feel like they’re family I can trust with the worries and concerns that both medical patients and recreational users have with cannabis. I just feel like they’ve listened to questions, concerns and criticisms and adjusted accordingly. They haven’t just said we’re Delta 9 and we’re doing our own thing. I’m very proud of that. They’re ‘Friendly Manitoba’ in a company.”
Steven Stairs visiting the Delta 9 Cannabis Sensory Bar to choose his strains
Stairs expected the long lineup, saying he had great faith in the Winnipeg cannabis community.
“They come out when you need them,” he said. “And there’s a pretty big market here. I think the estimates of $300-500 million in projected revenues annually were extremely conservative. I think you can probably go as high as 900 million.”
Stairs was also impressed with the new Delta 9 Cannabis Store.
“It’s exactly what you would want from a cannabis store,” said Stairs. “It’s vibrant. It’s open. It’s got that new kind of feel. Bright, well lit, information screens, shelving, a separate lounge area for relaxing and consultations. Friendly knowledgeable staff, excellent product lines. All these things are exactly what the legalisation of cannabis needed. We needed that credibility, that air of professionalism. Education, clothing, books, it’s an amazing one-stop shop for cannabis. They’ve got everything you could possibly need. It’s really nice to see how far we have come.”
The crowd had many and varied reasons for showing up on the first day of cannabis legalization.
“I’ve been waiting 50 years for this,” said Simon, age 70. “It’s a good start, and it’s about time,” said Toby, 20. “I think it is a wonderful initiative,” said Gary, 58. “I hope it meets the needs of all those involved. I see it as a good thing. I didn’t expect such a large crowd.”
“It’s about time,” said Vanessa, 31. “I’m just nosy,” said 60-something Debbie. “This is like IHOP, I’m coming for the grand opening.” “I’m enjoying the site,” said Daniel, 41. “I didn’t expect the lineup, but it’s a historical thing.”
“The time has come,” said Danny, 22. “We were born at the right time. I think everybody’s ready for it. The demographic here is insane, although I don't see a lot of real young people. They’re probably all in school, where we should be. We’re going to U of M now. Before I would just be sitting around studying and a guy would come by and ask me if I needed any help. And I would ask what he meant and he would say ‘Do you want to buy some drugs?’ That actually happens. This is more professional. And the location here is just amazing.
“I bought about eight grams for not much more than I would pay a dealer on the street, so I’m pretty happy. And I can be sure it’s good quality. I prefer Sativa, because I like to smoke and then get stuff done. It helps me focus.”
“It’s a safer way to buy weed,” said Sully’s friend Danny, 19. “And it’s more practical. We bought joint filters, plus some banana papers that are organic, no chemicals or preservatives, good for the earth.”
Thank You Manitoba!
]]>Mr. John Arbuthnot reports
DELTA 9 UPDATE ON EXPANSION PLANS
Delta 9 Cannabis Inc. has released its production and extraction plans for 2019 as well as a status update regarding its current operational expansion. Specifically, Delta 9 wishes to announce: (i) that the phase 1 development of Delta 9's grow facility in Winnipeg, Man., will be completed ahead of schedule, and significantly below budget; (ii) Delta 9's plans for the phase 2 development of its Winnipeg grow facility; (iii) Delta 9's acquisition of land for its planned Delta 9 Cannabis Campus in Winnipeg; and (iv) the anticipated schedule for the opening of the Delta West extracted products and product development facility in Calgary, Alta.
Delta 9 grow facility -- phase 1
Delta 9 chief executive officer John Arbuthnot announced today that the planned phase 1 development at its grow facility in Winnipeg is expected to be completed on or before Nov. 7, 2018, at a total estimated cost of $4,312,000, which is approximately 30 per cent below its original budgeted estimate. The Delta 9 grow facility uses proprietary grow pods for producing cannabis. Each grow pod is constructed from a repurposed 320-square-foot steel shipping container and can produce approximately 32.5 kilograms of cannabis annually.
The phase 1 development of the Winnipeg grow facility covers approximately 40,000 square feet with grow pods stacked two high. The following grow pods will be located in this area of the facility:
Once the phase 1 development of the Winnipeg grow facility is complete, there will be a total of 154 grow pods, offering 49,280 square feet of production space and estimated production capacity of 4,288 kilograms of cannabis annually. Delta 9 aims to certify the facility under the European Good Manufacturing Practices standard in order to be able to export cannabis products to the European Union.
"This project was not expected to be complete until the end of this year, but the Delta 9 grow pods we've designed have turned out to be even more efficient than we expected," said Mr. Arbuthnot. "We are now able to expand very quickly and at a very low capital cost as compared to our competitors in the industry. Each grow pod costs approximately $26,000 fully installed, and can produce approximately $325,000 per year in revenue, assuming a retail price of $10 per gram of cannabis."
Delta 9 grow facility -- phase 2
The area of Delta 9's grow facility in Winnipeg containing the phase 2 development is approximately 40,000 square feet in size and can also house two stories of grow pods. Delta 9 estimates that there will be a total of 154 grow pods contained in this area of the facility when it is completed. Delta 9 estimates that this area of the facility will be completed in the second quarter of 2019 at a cost of approximately $4,312,000. Once completed, this area of the facility is expected to produce up to an additional 4,288 kilograms of cannabis annually. The following grow pods will be located in this phase 2 area:
The Delta West facility -- phase 1
Delta 9 and Westleaf Cannabis Inc. have formed a 50/50 joint venture partnership to build and operate a state-of-the-art cannabis extract, testing, and research and development laboratory to develop and manufacture diversified and derivative cannabis products, pending approval of such products by the federal government. The facility is located in Calgary, Alta., and has a total area of 60,700 square feet. The phase 1 development of this facility will occupy approximately 15,800 square feet.
The phase 1 development will include a research and development facility, a processing lab, a manufacturing plant, and an order fulfilment centre, all built to the EU GMP standard in order to access international export markets. The facility will be designed by a North American leader in the design and construction of super critical carbon dioxide extraction operations.
Numerous types of cannabis products have been created or are under development in this facility at this time in what the company projects will be one of the largest cannabis oil extraction and extract manufacturing facilities in Canada. The production licence application for the Delta West facility was submitted to Health Canada in August, 2018, and construction began in September, 2018. The company expects a cannabis processing licence will be awarded in the second quarter of 2019.
"Our goal is to become one of the world's foremost producers of innovative cannabis derivatives," said Scott Hurd, chief executive officer and president of Westleaf. "This project is designed to support cutting edge research and development, which will result in the production of high-quality products that serve an increasingly sophisticated clientele and produce higher margins than dried cannabis."
Delta West facility -- phase 2
The second phase of the development of the Delta West facility is designed to significantly increase the capacity of the facility and to produce a wide variety of new derivative product lines, including concentrates, vape cartridges, edibles and beverages once these types of products are permitted for production and sale under Canadian regulations. Phase 2 of the Delta West facility is estimated to have a total area of approximately 44,900 square feet.
Winnipeg expansion facilities
On Oct. 11, 2018, the company announced that it has closed its previously announced acquisition of the land and the 80,000-square-foot building containing the company's current cannabis production facility from 6599362 Canada Ltd. for $6.25-million. Management is currently planning multiple expansion facilities on the Winnipeg site which will utilize the Delta 9 grow pod system. Delta 9 is planning to expand its annual cannabis production capacity to 17,500 kilograms by the end of 2019. Further expansion is planned on a Delta 9 cannabis campus slated for construction on an adjoining parcel of industrial land.
Retail operations
Delta 9, through its subsidiary Delta 9 Lifestyle Cannabis Clinic Inc., has opened its first retail cannabis store in Winnipeg, Man. This store is expected to be part of a network of retail outlets under the Delta 9 cannabis store brand. The 3,200-square-foot cannabis superstore opened on Oct. 17, 2018, and logged more than 9,000 separate purchases of cannabis and accessories in the first six days of operations.
The company is currently building three more retail outlets in Winnipeg, Man., Thompson, Man., and Brandon, Man., and has partnered with a Manitoba first nation group to open a fifth store. Additionally, the company has prequalified for the Manitoba government's request for proposals to build additional micro stores in smaller, rural communities.
About Delta 9 Cannabis Inc.
Delta 9 Cannabis was the fourth producer in Canada licensed to produce legal cannabis. Delta 9 now operates its wholly owned subsidiary, Delta 9 Bio-Tech Inc., as a licensed producer of medical marijuana pursuant to the ACMPR (Access to Cannabis for Medical Purposes Regulations) and operates an 80,000-square-foot production facility in Winnipeg, Man., Canada. Delta 9 also owns 50 per cent of the 70,000-square-foot Delta West facility in Alberta and co-owns the Delta 9 cannabis store retail operation.
We seek Safe Harbor.
© 2018 Canjex Publishing Ltd. All rights reserved.
]]>WINNIPEG, Oct. 24, 2018 /CNW/ - DELTA 9 CANNABIS INC. (TSXV: NINE) (OTC: VRNDF) ("Delta 9" or the "Company"), through its Delta 9 Cannabis Store subsidiary, logged close to 9,600 transactions in the first seven days after legalization of cannabis on October 17, totaling $736,124 in revenues up to the end of day on Tuesday this week.
277 Per Cent YOY Growth with Continued Expansion and Diversification
WINNIPEG, Aug. 29, 2018 /CNW/ – DELTA 9 CANNABIS INC. (TSXV:NINE) (“Delta 9” or the “Company”) today announced its financial and operational results for the second quarter of fiscal 2018, ended June 30, 2018.
Management Commentary
“This has been a pivotal period for Delta 9 as we prepare for full legalization of recreational cannabis in Canada,” said CEO John Arbuthnot. “From our perspective, the real race for primacy in the Canadian cannabis market begins on October 17, and for this reason, our focus has been to position our company for rapid growth in the post-legalization era. To this end, we acquired one of only four licenses for retail in our home province of Manitoba; invested in an expansion in Alberta and Saskatchewan through our partners at Westleaf; acquired the exclusive license for the cannabis delivery system developed by Nanosphere; and signed a major supply agreement with the Province of Manitoba.”
Arbuthnot says agreeing to the terms of a debt financing at favourable terms with a Tier 1 Chartered Bank was another important step in the Company’s development. “We were already well financed for our current phase of expansion, but this $12 million dollar financing allows us to expand readily into other areas, including our exports into Europe. Delta 9 is building a company that is both vertically and horizontally integrated, with a healthy footprint across Canada, and the ability to make inroads into the global market.”
Arbuthnot says the other major initiative for Delta 9 was to increase the Company’s access to the Canadian and global markets. “It’s not just a matter of how much cannabis you can produce. It’s also about how much you can sell, and market access is critical. Our moves to acquire supply agreements, to acquire retail licenses, to achieve Preferred Supplier status with Pharmasave, and to acquire an export partner in Germany will be key drivers of our post-legalization revenues. Additionally, we are now moving heavily into research and development with our partners at Nanosphere, developing new and advanced products that are unique in the industry for both the medical and recreational markets.”
Expansion
Delta 9 continues to expand its production capacity in Winnipeg in a project that remains ahead of schedule and under budget. The Company anticipates that the $16 million expansion will see production capacity increase to 17,500 kilograms of cannabis per year by the end of 2019. The Company also acquired lands adjacent to its current property, giving Delta 9 the ability to increase capacity to more than 2 million square feet of production space.
Additionally, Delta 9 owns 50 per cent of the 70,000 square foot Delta West facility in Alberta, which is expected to provide an initial increase of 4,000 kilograms of cannabis to the Company’s annual production.
Financial review Q2 2018
A comprehensive discussion of Delta 9’s financials and operations are provided in the Company’s Management Discussion & Analysis and Financial Statements which have been filed on www.sedar.com.
About Delta 9 Cannabis Inc.
Delta 9’s wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9’s shares trade on the TSX Venture Exchange under the symbol “NINE”.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) Delta 9’s expansion plans; (ii) Delta 9’s production of cannabis; (iii) the closing of Delta 9’s credit facility with a Tier 1 Canadian chartered bank; (iv) the legalization of recreational cannabis in Canada;; and (v) Delta 9’s research and development plans. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that Delta 9’s currently contemplated expansion and development plans may cease or otherwise change, Delta 9’s production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9’s products may be lower than anticipated, Delta 9’s cost to produce its grow pods may be higher than expected and all other risk factors set forth in the annual information form of Delta 9 dated May 31, 2018 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE Delta 9 Cannabis Inc.
For further information: Gary Symons, Director of Communications, communications@delta9.ca, 250.300.9352
Despite “a thousand moving pieces and Murphy’s Law,” John Arbuthnot said he hopes to see the shop join two of their others in Winnipeg and one in Thompson by opening right out the gate.
They’ve yet to announce specific locations for these recreational cannabis dispensaries, but Arbuthnot said their Brandon shop would be situated in a “tier one” commercial space that has heavy vehicular and pedestrian traffic in the area.
This is the first cannabis dispensary that has been confirmed for Brandon while details slowly trickle in, although Arbuthnot said by his estimate, a half-dozen outlets could set up shop in the city.
The Brandon outlet will be constructed to be “Apple Store-esque,” Arbuthnot said, adding that it would be brightly coloured and presented in a “clean style” —”that kind of professionalism, that kind of environment that we wanted to bring to the retail setting.”
“We’re really trying to put cannabis retail in a framework where you’re not going to feel in the least bit uncomfortable walking into that retail store, and you’ll have a very enjoyable retail experience,” he said.
Staff at Delta 9 dispensaries will be trained in not only basic corporate responsibility, but also on the nuances behind the products they are selling.
Arbuthnot said Delta 9 partnered with Mothers Against Drunk Driving, in consultation with medical professionals, to develop its staff training program.
The program will help people “know how they
can conduct themselves responsibility around the consumption end of this business,” he said.
Drawing experience from jurisdictions where legalized cannabis was rolled out, he said they typically struggled more where education was lacking.
This, he said, is why one of their central goals moving forward will be not only co-operating with whatever educational initiative the province comes out with, but also building upon it.
Wherever gaps might exist in provincial programming, Arbuthnot said, “we’re looking to fill those gaps as a responsible retailer.”
In addition to print and other media advertising, he said that they plan on hosting community events at their Brandon retail space in order to “give people the full story of what they need to know.”
Delta 9 Cannabis Inc. joined partner company Canopy Growth Corp. as one of four successful candidates to receive the provincial government’s
go-ahead to open retail cannabis outlets in Manitoba during their first round of approvals earlier this year.
Other successful candidates include National Access Cannabis, a numbered Canadian corporation featuring several companies, and Brandon-based B.O.B. Headquarters, which partnered with Tokyo Smoke in their bid.
B.O.B. Headquarters co-owner Robert Ritchot was unavailable for comment by press time on Tuesday.
At tje latest update last month, Ritchot said they remained on track to open up to approximately a dozen outlets by the end of the year, but were not ready to announce locations.
» tclarke@brandonsun.com
» Twitter: @TylerClarkeMB
]]>WINNIPEG, May 31, 2018 /CNW/ – DELTA 9 CANNABIS INC. (TSXV: NINE) (“Delta 9” or the “Company”) today announced the Company’s Q1 fiscal results.
Highlights of the Company’s operations include:
Delta 9 also undertook significant investments during the reporting quarter, including an investment of $1425,852 in the expansion of its cultivation facilities in Winnipeg by building and installing more of the Company’s proprietary, self-designed grow pods, and an investment of $3 million to acquire a 50 per cent equity interest in the Delta West cannabis production facility in Calgary, Alberta. The Delta West facility is a jointly owned venture with Westleaf Cannabis, but will operate under the Delta 9 license.
Delta 9’s management also reported on several successful ventures during the reporting period, as follows:
In addition to the activities completed by management in Q1, Delta 9 reports that in early April the Company signed a Letter of Intent to become a Preferred Supplier with Pharmasave Drugs Ltd., a leading pharmacy chain with approximately 650 member-owned outlets across Canada.
CEO John Arbuthnot says the results of the Company’s business activity in Q1 came from a deliberate plan to position Delta 9 for the upcoming legalization of cannabis.
“We believe that the key element for success in the coming legal market is access to distribution and the ability to retail our products,” Arbuthnot says. “For this reason, we focused less on client acquisition under the Access to Cannabis for Medical Purposes Regulations (ACMPR), which we did not see as a long term driver of profits, and instead have focused very heavily on positioning Delta 9 for distribution and sales under the upcoming legal regime for recreational.
“Our success in acquiring the retail license in Manitoba, in working closely with Pharmasave, and acquiring an export agreement to Germany are all the result of our focus on market access. We feel that focus will pay off when legal sales begin, and that Delta 9 is among the best placed companies in Canada in terms of market access.”
About Delta 9 Cannabis Inc.
Delta 9’s wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9’s shares trade on the TSX Venture Exchange under the symbol “NINE”.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) Delta 9’s expansion plans; (ii) Delta 9’s production of cannabis; (iii) approvals for Delta 9’s production facilities by Health Canada; (iv) demand for Delta 9’s products; and (v) Delta 9’s cost to produce its grow pods. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that Delta 9’s currently contemplated expansion and development plans may cease or otherwise change, Delta 9’s production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9’s products may be lower than anticipated, Delta 9’s cost to produce its grow pods may be higher than expected and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE Delta 9 Cannabis Inc.
For further information: Gary Symons, Director of Communications, communications@delta9.ca, 250.300.9352
Under the March 21, 2018 agreement Delta 9 and Fort Garry will jointly produce and market a hemp beer in Manitoba, for sales nationally. The beer is expected to be on the market in the summer to mark the expected legalization of recreational cannabis in Canada.
The first product, produced pursuant to the strategic collaboration, will be an alcoholized beer infused with material from hemp seeds, and will contain no cannabis or any other psychoactive agent produced from the cannabis plant.
Fort Garry will be responsible for distribution in any province where the brand is sold. Delta 9 will provide the hemp seed used in production of the new product.
The companies also plan to develop a co-branded, cannabinoid-infused beer that contains no alcohol. Release of that “Phase 2 product” would be developed as a concept beverage, pending regulatory approval from Health Canada and provincial regulatory bodies. Delta 9 will incur the costs associated with marketing and advertising of the Phase 2 product.
Under the terms of the agreement, Delta 9 and Fort Garry will split the research and development costs, while Fort Garry will incur marketing and advertising costs associated with the launch, sale and distribution of the Phase 1 product. Delta 9 will provide hemp and/or cannabis to Fort Garry for use in producing the new beer, and may also contribute funds to marketing and advertising.
“We see this as a great partnership between two iconic brands in Manitoba,” said Delta 9 CEO John Arbuthnot. “Fort Garry Brewing is one of the best craft brewers in Canada and is particularly popular in our home province, while Delta 9 is truly Manitoba’s Own Cannabis Producer. Combining our joint expertise will allow us to provide some really innovative beverages for customers from coast to coast.
“The fact that this is a Made-in-Manitoba partnership with our favourite brewery is icing on the cake!”
Fort Garry Brewing General Manager Orest Horechko said he and his team are equally excited about the partnership with one of Canada’s largest cannabis producers.
“We’re very happy that two local companies are getting together to move forward on an amazing project, that will result in a fantastic, 100 per cent made in Manitoba product,” Horechko says.
The Agreement is subject to the drafting of a more detailed Definitive Agreement which the parties expect to execute in late April, 2018.
About Delta 9 Cannabis Inc.
Delta 9’s wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9’s shares trade on the TSX Venture Exchange under the symbol “NINE”.
About Fort Garry Brewing Company LP
Fort Garry Brewing Company is the oldest and largest brewer in Manitoba, with a 25,000 square foot facility located in south Winnipeg.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to: (i) Delta 9’s expansion plans; (ii) Delta 9’s production of cannabis; (iii) approvals for Delta 9’s production facilities by Health Canada; (iv) demand for Delta 9’s products; and (v) Delta 9’s cost to produce its grow pods. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that Delta 9’s currently contemplated expansion and development plans may cease or otherwise change, Delta 9’s production of cannabis may be lower than expected, Delta 9 may not obtain the required approvals from Health Canada, demand for Delta 9’s products may be lower than anticipated, Delta 9’s cost to produce its grow pods may be higher than expected and all other risk factors set forth in the filing statement of Delta 9 dated October 25, 2017 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
One Canadian province that is already well advanced in setting up a recreational cannabis market is Manitoba. This province has not only created its legislative framework, it is already awarding retail distribution licenses.
To date, Manitoba has handed out four such licenses. This is big news, in general. In specific terms, it is huge news for Delta 9 Cannabis Inc. (TSX: V.NINE, OTCQB: VRNDF, Forum), and its shareholders. On February 16, 2018; Delta 9, in partnership with industry leader Canopy Growth Corp (TSX: WEED), announced it has been awarded one of those licenses.
With respect to the current, medicinal market in Canada, most cannabis companies have gotten the biggest bump in their valuations from news on the cultivation front: acquiring an ACMPR cultivation license, or constructing/expanding cultivation facilities. Going forward, however, investors may find cannabis companies getting more traction on retail distribution news.
Why? It’s all in the numbers. At present, Canada’s medicinal market is estimated to be generating over $500 million per year in revenues. That’s a big number. However, the new recreational market is expected to quickly grow to roughly $10 billion per year in revenues. That’s an enormous number, and it’s an extrapolation from the existing recreational markets in two U.S. states: Colorado and Washington.
This means that a license for legal (recreational) cannabis distribution may now become a bigger driver in the valuations of cannabis companies than milestones on the cultivation end of operations. That’s the overview of the economic opportunity that NINE is seeking to exploit.
In specific terms, there are several important details upon which investors should focus. It starts with the Company’s partner in this Manitoba distribution initiative, Canopy Growth. Delta 9’s CEO, John Arbuthnot helps to put this news into context.
As the only Manitoba producer licensed to sell cannabis, and partnered with the world’s largest cannabis company, we feel we are uniquely situated to serve the Manitoba market with both quantity and quality of product.
Investors may be asking themselves why “the world’s largest cannabis company” has chosen to partner with Delta 9 in obtaining a Manitoba retail distribution license. The answer comes in the quote above: Delta 9 is the only licensed cannabis producer in the province that (now) has a recreational sales license to compliment its cultivation operations.
With regulations still murky with respect to the interprovincial flow of cannabis, there may ultimately be an enormous strategic advantage in having both in-province cultivation capacity combined with a license for retail recreational distribution. This would appear to be the thinking of Canopy Growth.
For Delta 9, the synergies are even more apparent. The Company will benefit from WEED’s overall depth of experience in the Canadian cannabis market. Partnering with such a well-capitalized company can only expedite Delta 9’s penetration of the Manitoba recreational market.
November 7, 2017: Manitoba Premier Brian Pallister announces the province’s “hybrid” distribution model for recreational cannabis
The license permits Delta 9 and its partner to construct and operate a chain of recreational cannabis distribution outlets. The Company has already constructed its first outlet in Winnipeg, a site that already operates as a resource centre/clinic.
Think “liquor stores”. When provincial governments began privatizing liquor distribution, the private sector was eagerly standing in line, looking to cash in on the robust margins and high sales potential in that industry.
There is no reason to believe that cannabis distribution will be any less lucrative. Indeed, NINE’s own internal research estimates the Manitoba recreational market to be a $300 million – $500 million per year opportunity.
Put this into context with Delta 9’s present market cap: $152 million (as of this writing). In contrast, Canopy Growth is a $5.4 billion behemoth. Clearly, it is the shareholders of NINE who can expect the greatest upside from this distribution news.
The Great Race in the Canadian cannabis market has entered a new phase as Canada’s medicinal market is about to be augmented by a much larger recreational market. As investors seek to position themselves for this imminent opportunity, Delta 9 is presenting the marketplace with a very attractive investment option.
]]>With the second great sector bull coming to an abrupt halt recently, investors are starting to sort through the body count. The time to start buying shares of select companies may be premature, but the carnage is making for some interesting options. If there’s an upcoming third bull leg, the time to start thinking about positioning is now.
The next bull cycle — which I posit could reignite anytime between the next few weeks leading up to July 1st, 2018 or late summer legalization period — may provide one more excellent investment opportunity before the inevitable sell-the-news event arrives. After all, once the sector goes live, market euphoria will subside. Wild speculative fervor will be replaced by the sterile reality of MoM retail sales comps, quarterly earnings reports and an assortment of credible business anecdotes. Data is a wonderful thing, but it leaves no room for the imagination to run wild.
And that’s a positive thing. It’s the natural transition of a maturing sector putting on its ‘big boy’ pants and going corporate. While the halcyon days of 400% YoY moves (as seen in the sector in both 2016 and 2017) provided amazingly quick returns, we suspect most will appreciate a more balanced risk profile. That will eventually include such benefits as dividends and better sharpe ratios.
Let’s face it: the bubble was in serious need of a short-term pin. At a valuation apex of about $31 billion (as judged by the Canadian Marijuana Index), Big Cannabis was worth more than Telus Corporation (TSX:TO), a cashflow generating behemoth with $13 billion is annual revenues, $5 billion in annual profits, and 7-10% semi-annual dividend increasesthrough the end of 2019.
By comparison, the Canadian cannabis market will be much smaller; at least initially. For example, the California market is expected to reach US$3.7 billion in 2018 and about US$5.1 billion in 2019 according to research firm BDS Analytics. With a population of 39.25 million and similar consumer/regulatory dynamics, the Golden State compares favorably to the Canadian market.
The fact that Canadian cannabis valuations are on par with Telus highlights the frothiness of underlying equities. Sure, select winners will have much higher growth rates for the foreseeable future. But it’s unlikely the cashflow/profit gap will close by the time cannabis growth rates start coming back to earth. This is a highly regulated industry after all. As it often does, the market is pricing-in the Goldilox scenario, even if it doesn’t compute from a analytical perspective. It’s the reason why bubbles keep materializing, despite investors knowing better.
As such, we present our best cannabis stock plays for our anticipated third bull cycle. The focus here is on underestimated laggards with compelling stories. Should that third upleg occur, I believe it will be driven by mid-market which maintain lower ascribed valuations. These companies could be attractive acquisition targets. There’s still business/supply chain/compliance gaps the leaders need covering, and they’re up against the clock.
Therefore, expect sector consolidation to be the next big market driver. January’s Aurora Cannabis-CannaMed mergerwas just 2018’s opening salvo. If our thesis is correct, more activity on the takeover front is expected in the coming months.
With our investment thesis firmly in place, here are two interesting value propositions right now. I believe both companies could be undervalued relative to their growth potential and strategic positioning within their relative markets. This isn’t an all-encompassing analysis of each stock, rather, a general topline synopsis on why we like their story.
Delta 9 is Manitoba-based outfit growing small batch, hand trimmed, high quality medical cannabis strains in proprietary Grow Pod systems. The company is financed to build out 600 of these grow pods, which at capacity can yield 31.5 kilograms of medical cannabis each at an aggregate market value of $170 million per annum.
They do this on 80,000 square foot production facility in East Winnipeg, with an expansion capacity to 835,000 sq/ft in existing onsite buildings as needed. The company was one of Canada’s first ACMPR licensed companies and has a strategic foothold in the Winnipeg market, Canada’s 7th most populous city (2011 Census).
Recently, the company expanded its footprint into Alberta with the acquisition of Westleaf Cannabis Inc. This gives Delta 9 a fifty percent equity interest in a large-scale 4,000 kg cannabis production facility located in Southern Alberta. The company anticipates designating the Project as an expansion facility under its existing ACMPR license, with product moving sometime in 3Q 2018.
Despite an expanding production capacity, existing licensing and distribution agreement, the company’s stock has languished relative to its peers. Perhaps an ascribed market cap of $155M for a company with sub 7-digits revenues is scaring investors off. They have minimal presence in Canada’s “Big 3” urban markets, and have been born from decidedly “mom & pops” roots. In college football parlance, it would be akin to Alabama playing Western Kentucky.
But Delta 9 Cannabis Inc. has notable operations and reach between the eastern Rockies and Steinbach. One wonders whether Kenora and Thunder Bay are within their market range also. For a Tier-1 looking to expand supply chain production in the Mid-Canada market, Delta 9 might be worth a second look. Pure speculation on our part, but one that doesn’t take much imagination to see unfold.
Harvest One is a global cannabis company servicing both the recreational and medical markets. The company serves as the umbrella company over its two main subsidiaries United Greeneries and Satipharm.
The former’s flagship property – the Duncan Facility – rests on a 1.2 acre property previously used as cold storage for a large commercial greenhouse growing operation located adjacent to a 40-acre land package on Vancouver Island. On October 13, 2017, Health Canada issued the amendment to allow sale of dried marijuana to registered patients.
The Duncan Facility has approximately 10,000 square feet of cultivation area and high compliance items such as a Level 8 Narcotics Vault and an in-house biochemical laboratory. Total production capacity is about 1,000 kg of cannabis per annum
Harvest One’s big prize is their Lucky Lake, Saskatchewan property. It’s currently in the late-stage application phase to operate a 62,000 square foot agricultural facility 100 km south of Saskatoon. If approved, cultivation capacity could be upwards of 11,700 kg of cannabis annually.
Furthermore, United Greeneries has addition plans to retrofit an industrial lumber kiln in Chemainus, British Columbia. Total annual capacity is anticipated at approximately 8,000 kg and can be fully funded with current cash reserves. This is an early-stage project at this point.
On the pharmaceutical front, Harvest One’s Satipharm subsidiary already has a fast-growing product on the market. Its Gelpell® Microgel Capsules are a CBD-only medicinal solution which uses micro-emulsion to substantially enhances the oral bioavailability of the cannabinoid.
But here’s the money part: Sales of Satipharm’s Gelpell-CBD capsules in the first quarter, while very modest, were $174,544, a 76.8% increase over fiscal 2017 sales. That’s only poised to increase because in November 2017, Satipharm commences distribution Gelpell-CBD capsules to approved patients in Australia.
That isn’t all. In January 2018, Satipharm AG received an initial import license to sell in the Canadian market. Once initialized, Satipharm’s Gelpell capsules will be added to United Greeneries’ ACMPR retail distribution. The company estimates the product will start distribution sometime during Q2 2018.
Although there’s some projection required (the revenues aren’t there yet and Lucky Lake still hasn’t been approved), I believe Harvest One could be an attractive target. They have existing (albeit modest) west coast production, fledgling larger production nearing approval, and a fast-growing medicinal product already on the market. With subsidiaries on four continents, they offer potential suitors higher yields and quick access to Australian/European and soon-to-be Canadian medicinal markets.
Disclosure: Neither Midas Letter Publishing Group nor the author own any financial interests in the profiled companies.
]]>Delta 9 has signed a non-binding letter of intent with Westleaf Cannabis Inc., designed to fast track that company’s production licence application and giving Delta 9 a toehold in the Alberta market.
Westleaf does not yet have a production or sales licence. But that is expected to be expedited with the Delta 9 partnership, because Health Canada gives preference to companies that are already licenced.
The thinking is that since Delta 9’s modular production model has already been approved by Health Canada — the Winnipeg company uses repurposed shipping containers and hydroponic systems — it will be easier for the regulator to approve another facility using the same process.
As well, Arbuthnot said, he believes having an equity partnership stake in an Alberta operation will give the partners an advantage in making its pitch to get into the retail business in that province. (Alberta is behind Manitoba in establishing the regulatory framework for the retailing and distribution of marijuana for recreational use, which is to become legal in July.)
Westleaf, which has some ex-Winnipeggers among its core team, is also planning a Saskatchewan operation. Arbuthnot said he was not able to talk about whether or not Delta 9 will also participate in that project at this time.
The company’s Winnipeg operation will be up to an annual production rate of 17,500 kilograms by the end of this year. The joint venture in Alberta will be a smaller facility, at about 4,000 kilograms per year.
Delta 9 went public on the TSX Venture Exchange in November after a reverse takeover and started trading at 65 cents. It raised about $23 million at the end of last year at $ 2.70 per share. The stock closed at $2.73 after Monday’s trading.
“We’re fully financed now,” Arbuthnot said.
“There’s no holding back.”
The Delta 9/Westleaf deal was part of another busy day in the marijuana sector.
Aphria Inc. agreed to buy Nuuvera Inc., a global cannabis company based in Brampton, Ont., for about $826 million in cash and stock. The offer of about $8.50 a share is 21 per cent higher than Nuuvera’s closing price on Friday.
While the combined Canadian market for medical and recreational market is expected to reach about $8 billion in sales by 2021, companies such as Aphria and Nuuvera are looking to grow in markets where there’s even bigger potential.
“This positions us to grow internationally and realigns the potential of these emerging cannabis markets,” Aphria chief executive officer Vic Neufeld said Monday on a conference call.
Nuuvera is working with partners in Germany, Israel and Italy and is exploring opportunities in other countries to develop commercial production and distribution of medical cannabis. Combined with Aphria’s agreements in Australia, the merged entity will have a “leading international footprint among Canadian licensed producers,” the companies said Monday.
Nuuvera is one of the finalists in a tender to supply Germany’s market and the company already has an agreement to export marijuana to a German pharmaceutical distributor, CEO Lorne Abony said. Italy’s medical cannabis market is expected to be worth more than $9 billion and Nuuvera is currently one of only seven producers that have secured a licence to import into the country, he said.
The transaction comes less than a week after Aurora Cannabis Inc. agreed to acquire CanniMed Therapeutics Inc. in a $1.23-billion deal that would be the largest yet in the Canadian marijuana industry.
— with files from Bloomberg News
martin.cash@freepress.mb.ca
]]>Upon quarterly rebalance, 11 stocks were added to the HMMJ portfolio
TORONTO, Dec. 18, 2017 /CNW/ – Horizons ETFs Management (Canada) Inc. (“Horizons ETFs“) announced it has completed the quarterly rebalance of the constituent holdings of the Horizons Marijuana Life Sciences Index ETF (“HMMJ“) on December 15, 2017. As a result, 11 new holdings have been added to HMMJ’s portfolio.
HMMJ is the world’s first ETF that offers direct exposure to North American-listed securities that are involved with marijuana bioengineering and production. The HMMJ portfolio has expanded to include the following constituents:
Constituent Name |
Ticker |
Exchange |
Canntrust Holdings Inc. |
TRST |
Canadian Securities Exchange |
Delta 9 Cannabis Inc. |
NINE |
TSX Venture Exchange |
Emerald Health Therapeutics |
EMH |
TSX Venture Exchange |
Harvest One Cannabis Inc. |
HVST |
TSX Venture Exchange |
Hydropothecary Corp. |
THCX |
TSX Venture Exchange |
ICC International Cannabis Corp. |
ICC |
TSX Venture Exchange |
InMed Pharmaceuticals Inc. |
IN |
Canadian Securities Exchange |
Innovative Industrial Properties Inc. |
IIPR |
New York Stock Exchange |
Newstrike Resources Ltd. |
HIP |
TSX Venture Exchange |
Radient Technologies Inc. |
RTI |
TSX Venture Exchange |
WeedMD Inc. |
WMD |
TSX Venture Exchange |
HMMJ is an index (or passively managed) ETF, which seeks to replicate, to the extent possible, the performance of the North American Marijuana Index (the “Index“), net of expenses. The Index is designed to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry. The Index selects from a current universe of companies that have operations that may include one or more of biopharmaceuticals, medical manufacturing, distribution, bio-products and other ancillary businesses related to the marijuana industry.
“Cannabis has been one of the newest and fastest-growing asset classes of 2017, presently valued at approximately$23 billion,” said Steve Hawkins, President and Co-CEO of Horizons ETFs. “The continued expansion of HMMJ’s Index and portfolio demonstrates how quickly this sector has evolved and why it should be considered a long-term, domestic investment opportunity for Canadian investors.”
Rebalancing of the North American Marijuana Index occurs before the end of each calendar quarter. At that point, all stocks eligible for inclusion in the Index are weighted by their respective market capitalization. However, no single stock can exceed 10% of the weight of the index at the rebalance date.
In conjunction with the recently announced Index rebalance by the Index calculation agent (Solactive AG), HMMJ has also rebalanced its portfolio holdings. The holdings of the ETF and their current portfolio weights are regularly updated on our website at www.HorizonsETFs.com/HMMJ.
It is important to note that HMMJ may not hold all of the constituent names in the Index. HMMJ’s manager, through the use of a stratified sampling strategy, may invest in securities that closely match the investment characteristics of the Index, and are consistent with the investment objective and strategy of the ETF.
About Horizons ETFs Management (Canada) Inc. (www.HorizonsETFs.com)
Horizons ETFs Management (Canada) Inc. is an innovative financial services company and offers one of the largest suites of exchange traded funds in Canada. The Horizons ETFs product suite includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Horizons ETFs currently has more than $8.7 billion of assets under management and 81 ETFs listed on the Toronto Stock Exchange. Horizons ETFs Management (Canada) Inc. is a member of the Mirae Asset Global Investments Group.
About Solactive (www.solactive.com)
Solactive AG is an innovative index provider that focuses on the development, calculation and distribution of tailor-made indices over all asset classes. The company was established in 2007 and is headquartered in Frankfurt, Germany. Over 350 international clients, including major investment banks, ETF providers and asset managers have embraced Solactive’s mutually attractive investment ideas. As at October 2017, more than 260 ETFs are linked to Solactive’s indices and over USD $100 billion is invested in products linked to indices calculated by Solactive.
Horizons ETFs is a member of Mirae Asset Global Investments. Commissions, management fees, expenses and applicable sales taxes all may be associated with an investment in the Horizons Marijuana Life Sciences Index ETF managed by Horizons ETFs Management (Canada) Inc. (the “ETF”). The ETF is not guaranteed, its value changes frequently and past performance may not be repeated. The Prospectus contains important detailed information about the ETF. Please read the Prospectus before investing.
HMMJ is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade name or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trade name for the purpose of use in connection with the financial instrument constitutes a recommendation by Solactive AG to invest capital in HMMJ nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in HMMJ.
SOURCE Horizons ETFs Management (Canada) Inc.
For further information: For investor inquiries: 1-866-641-5739 (toll-free) or (416) 933-5745 info@horizonsetfs.com; For media inquiries: Olivia Fazekas, Manager, Content Marketing, PR and Social, Horizons ETFs Management (Canada) Inc., (416) 601-2502, ofazekas@horizonsetfs.com
In this article we will take a look at Delta 9 Cannabis Inc. (TSX-V: NINE) and why its focus on maximizing shareholder value makes it a unique licensed producer.
Humble Origins
Delta 9 was conceived before there was a legal cannabis industry in Canada. In 2009, John Arbuthnot was attending the University of Western Ontario, working toward a degree in Business Administration. He was assigned to write a business plan and decided to write one for a marijuana business under the Marihuana Medical Access Regulations (MMAR), which was a precursor to the Marijuana for Medical Purposes Regulations (MMPR) and the Access to Cannabis for Medical Purposes Regulations (ACMPR) that’s in place today. He brought the idea to his father, Bill Arbuthnot, who had experience running a wide range of businesses, and the father-and-son team founded Delta 9 in 2012 to apply for a license under the new MMPR program.
Delta 9 secured the fourth license for cannabis production December of 2013, making it one of the earliest approved licensed producers. They achieved their sales license soon after, in early 2013. While many other companies were heavily funded and spent more than $10 million achieving a license, the Delta 9 team built their original facility on their own for just $950,000; an impressive use of capital!
The company then took a wait-and-see approach to the industry until the Liberal government was elected in 2015 with a mandate to legalize cannabis nationwide, and have since kicked their expansion plans into high gear. So far in 2017, the company has raised over $10 million in funding and decided to proceed with a reverse takeover to list on the TSX Venture exchange.
Focus on ROI
Delta 9’s cost-conscious approach to the industry continues despite the significant capital infusion and access to the public markets.
John and Bill jointly developed their own innovative growing system that converted steel shipping containers – known as sea cans – into highly efficient hydroponic grow pods. Each pod is approximately 40 feet long and eight feet wide with 320 square feet of growing space. They are equipped with 15 vented lights that enable cool air to run through the lighting units, which reduces the power consumption for cooling the pods. The self-contained nature of the pods also reduces the need for roof-mounted industrial HVAC systems.
Despite massive increases in quality and productivity, the Delta 9 grow pods cost only $40,000 to install, but produce between 30 to 32 kilos of dried cannabis per year. While typical purpose-built indoor or greenhouse facilities cost roughly $1 million per 1,000 square feet to build, Delta 9’s innovative, self-designed systems have driven their expansion costs down to just $120,000 per 1,000 square feet; an impressive Return on Investment.
In addition to the cost savings, the pods have a reduced risk of crop loss since they are completely isolated from each other. This is one reason that the company is one of the few licensed producers that has never gone through a recall or suspension due to mold, pests, or other quality control issues. If there is an issue with a crop, that issue is isolated to a single pod and might cost the company only $5,000 to $10,000.
Crop loss in the typical greenhouse or open growing space more typically can cost a company in the hundreds of thousands of dollars, and while Delta 9’s system might be slightly more labour intensive, the company is justifiably proud of its enviable reputation for quality control.
The company is also capable of efficiently growing many different types of cannabis since each pod can be set up to suit a particular strain or product type without affecting other product types in different pods.
The company’s location in Manitoba also provides it with a key advantage over competing companies. The province has the lowest rates for electrical power in the country, which means the company pays just 4.5 cents per kilowatt hour compared to upwards of 20 cents for some competitors. Along with lower leasing, land, and labor costs, the company estimates the cost of goods sold for each gram will be just over $1 by 2020. Combined with the lower capital outlay, these are huge advantages for shareholders looking for a high return on their investment dollars.
Looking Ahead
Delta 9 Cannabis Inc. (TSX-V: NINE) has plans to build 600 grow pods into an 80,000 square foot building and a neighboring 55,000 square foot building. Management estimates the total capital expenditure will be approximately $24 million with production of 17,500 kilograms per year. At 2016 prices, this translates to annual revenue of about $131.8 million. The team then plans to expand production to 1,800 pods on the same property over time as demand for cannabis picks up in 2020 and beyond.
“Our entire focus, every day, is to create value for our shareholders and value for our customers, and we do that by working hard to produce a very high quality product with a high degree of efficiency,” says John Arbuthnot. “We do that by only making the capital investments that really improve the business, and we do that by constantly working to improve our efficiency and drive production costs down. No matter what business you’re in, keeping your capital costs and your production costs under control is the only way to build a sustainable business.”
For more information, visit the company’s website at https://www.delta9.ca.
Read the full press release here – http://www.cannabisfn.com/delta-9-licensed-producer-focused-maximizing-shareholder-value.
]]>Delta 9 cultivates its crop inside individual “grow pods,” which are retrofitted shipping containers. The expansion will add 143 pods to the current 15 pods.”
]]>WINNIPEG, Nov. 6, 2017 /CNW/ – Trading began today in shares of Delta 9 Cannabis Inc., one of Canada’s first licensed producers of medical marijuana. The company’s shares are trading on the TSX-V under the stock symbol ‘NINE’.
Share prices rose sharply in the first hours of trading, increasing from $0.65 at the open to $2.00, and were at $1.87 as of noon today (Eastern Time).
Delta 9 was the fourth company in Canada licensed to legally grow and sell cannabis under the original Marijuana for Medical Purposes Regulations. The Winnipeg company is listing on the TSX-V in order to prepare for the upcoming legalization of medical marijuana.
“Closing of the Transaction represents a significant milestone for Delta 9 as we look to aggressively expand our domestic production facilities and international opportunities,” says Delta 9 CEO John Arbuthnot. “Ultimately our goal is to raise between 25 and 30 million dollars in additional capital, through a mix of debt and equity, over the next number of months in order to meet the rising demand for our products.”
This year alone the company has constructed 28 of its self-designed ‘grow pods’, each of which produces an average of 31,500 grams of high quality cannabis annually. The current construction project is intended to build out 600 grow pods in its current 80,000 square foot building in Winnipeg.
Production capacity is expected to increase from the current 1,000 kilograms per year, to 17,000 kilograms of high grade cannabis by 2020.
“What comes with that expansion is more jobs being created in Manitoba, increased production capacity to bring on more registered patients in the short term, and also positioning ourselves for the recreational market following legalization next year,” Arbuthnot says.
As part of the transaction Delta 9 completed a brokered private placement offering of eight million common shares in the capital of the Company at a price of $0.65 per share.
Delta 9’s listing on the exchange occurs as Canada prepares for full legalization of recreational cannabis, which the Liberal government has scheduled for July 1, 2018.
Delta 9 closed a reverse takeover transaction on Oct. 31, 2017 with SVT Capital Corp. (SVT) pursuant to which SVT acquired all of the issued and outstanding shares of Delta 9 Bio-Tech Inc. The resulting issuer, Delta 9 Cannabis Inc., began trading today.
About Delta 9
Delta 9’s wholly-owned subsidiary, Delta 9 Bio-tech, is a licensed producer of medical marijuana pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR) and operates an 80,000 square foot, expandable, state-of-the-art production facility in Winnipeg, Manitoba, Canada. Delta 9 shares will be trading on the TSX-V under the symbol ‘NINE’.
On behalf of the Board of Directors, DELTA 9 CANNABIS INC.
John William (Bill) Arbuthnot III,
Chairman, President and Director
WINNIPEG, Nov. 1, 2017 /CNW/ – DELTA 9 CANNABIS INC. (TSXV: NINE) (formerly SVT Capital Corp.) (the “Company“) is pleased to announce that it has completed its previously announced reverse takeover transaction (the “Transaction“), pursuant to which the Company has acquired all of the issued and outstanding shares of Delta 9 Bio-Tech Inc. (“Delta 9“) by way of a three-cornered amalgamation among the Company, Delta 9 and 10240907 Canada Corp. (“Newco“). The Company expects to resume trading as a Tier 2 Industrial Issuer on the TSX Venture Exchange (the “TSXV“) under the symbol “NINE” at market open on Monday, November 6, 2017.
In connection with the closing of the Transaction (the “Closing“), the Company:
all as further described in this news release and in the Company’s filing statement dated October 25, 2017 (the “Filing Statement“) with respect to the Transaction, Delta 9, which was founded by the father and son team of Bill and John Arbuthnot in 2012, obtained a production license under the Marihuana for Medical Purposes Regulations in December 2013, followed by a license to distribute medical cannabis in March 2014. Since that time, Delta 9 has established itself in its approximately 80,000 square foot production facility in East Winnipeg and grown from 2 employees to approximately 28 full-time employees and 15 part-time employees. Delta 9 is focused on growing small batch, hand trimmed, high quality medical cannabis strains. Delta 9 currently has a rotation of approximately 20 different genetic strains of cannabis that are available to its over 2,000 medical patients across Canada.
“Closing of the Transaction represents a significant milestone for Delta 9 as we look to aggressively expand our domestic production facilities and international opportunities,” said the Company’s Chairman, President and director, Bill Arbuthnot. “The capital raised under the Concurrent Financing will allow us to scale up our growing operations, enabling us to take advantage of the tremendous opportunities in the medical cannabis market. In doing so, we plan to become a premier choice for patients who want a consistent, high-quality, standardized product that they can rely on.”
Closing of Reverse Takeover
In connection with the Closing, Delta 9 amalgamated with Newco under the provisions of the Canada Business Corporations Act, with the amalgamated company being a wholly-owned subsidiary of the Company named “Delta 9 Bio-Tech Inc.”. The Company issued one Share to each former shareholder of Delta 9, on a one for one basis. After giving effect to the completion of the Transaction and the Offering, there are 65,414,579 Shares issued and outstanding (on an undiluted basis), with approximately 57% of the Shares (on an undiluted basis) held by insiders.
In connection with the Closing, the Company paid a finder’s fee of $300,000, comprised of a cash payment of $150,000 and the issuance of 230,769 Shares at a deemed issue price of $0.65 per Share (the “Issue Price“) to Deep Incite Consulting Ltd., as compensation for introducing Delta 9 and the Company.
New Board of Directors and Management Team
In connection with the Closing, the Company welcomes a new board of directors and management team. The Company will be led by Bill Arbuthnot, who has agreed to act as Chairman, President and a director of the Company, John Arbuthnot, who has agreed to act as Chief Executive Officer and a director of the Company, Brent Bottomley who has agreed to act as Chief Financial Officer and Secretary of the Company, and Nitin Kaushal, who has agreed to act as a director of the Company. Anthony Jackson has agreed to remain as a director of the Company. Von Torres and Kenneth Tollstam have resigned as directors of the Company and the Company thanks them for their service in bringing the Company to completion of the Transaction.
Closing of Concurrent Financing
Immediately prior to the Closing, the Company completed a brokered private placement pursuant to which it sold an aggregate of 8,000,000 Shares at the Issue Price for gross proceeds of $5,200,000.
As previously announced, Canaccord Genuity Corp. (the “Agent“) acted as agent in respect of the Concurrent Financing, in consideration for: (i) a commission of $364,000, comprised of a cash payment of $192,400 and the issuance of 264,000 Shares, (ii) a corporate finance fee of $150,000, comprised of a cash payment of $75,000 and the issuance of 115,385 Shares, (iii) the issuance to the Agent of an aggregate of 560,000 warrants, each of which entitles the holder to acquire one Share at the Issue Price until October 31, 2019, and (iv) the reimbursement of the Agent’s reasonable expenses in connection with the Offering.
Grant of Stock Options
In connection with the Closing, the Company also agreed to grant, effective as of the date of the TSXV’s Final Exchange Bulletin (the “Bulletin“) with respect to the Transaction, an aggregate of 5,116,258 stock options (each, an “Option“) to certain directors, officers, employees and consultants of the Company, as further described in the Filing Statement, and in accordance with the Company’s 2017 stock option plan. Each Option will be exercisable into one Share at the Issue Price for a period of five years from the date of grant, and the Options will vest over two years, with 25% vesting every six months, commencing on the date that is six months following the Bulletin.
No securities of the Company (including, for greater certainty, the Shares) have been or will be registered under the United StatesSecurities Act of 1933, as amended (the “U.S. Securities Act“), or the securities laws of any state, district or commonwealth of the United States (as defined in Regulation S under the U.S. Securities Act). Accordingly, these securities may not be offered or sold, directly or indirectly, within the United States or to or for the account or benefit of any “U.S. Person” (as defined in Regulation S under the U.S. Securities Act), absent an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States or any jurisdiction where such offer or sale would be unlawful, or for the account or benefit of any U.S. Person or person within the United States.
ON BEHALF OF THE BOARD OF DIRECTORS
“John William (Bill) Arbuthnot III”
Read the full article on the CBC here: http://www.cbc.ca/news/canada/manitoba/cannabis-manitoba-industry-legalization-1.4231456
]]>Under the terms of the Agreement, Delta 9 will submit to Health Canada an application for Amendment under Section 29 of the MMPR to collaborate with GrowPros on the previously submitted application. (see previous news releases)
In consideration for this collaboration, GrowPros will make milestone payments to Delta 9 in cash or shares (the “Shares”) with an aggregate value of $2,000,000. The value of the Shares will be based on the greater of (i) the closing market price of GrowPros common shares on the day immediately prior to the day of issuance and (ii) $0.05 per Share. Under the terms of the agreement, the first milestone payment of $400,000 will be issued in Shares at a value of $0.05 (the closing price on the date of the signing of the previously released collaborative venture terms agreement). Delta 9 will have the option to receive the remaining 4 milestone payments in cash or Shares, with all cash payments made payable to Delta 9 upon completion of the final milestone. GrowPros will announce the completion and terms of each milestone payment as required by regulations. Achieving the final milestone will occur upon the full licensing of the GrowPros facility located in Low Quebec. All milestones payments will be held by our Escrow Agent and will be released upon the completion of the next milestone.
GrowPros will be required to finance the design, development, construction, and all out-of-pocket costs relating to the licensing of the Quebec Facility. GrowPros intends to raise additional capital through both secured debit and private placements to finance the construction. The estimated cost of construction is projected at approximately $3 million dollars.
The Agreement also provides that GrowPros and Delta 9 will enter into a secondary agreement in which GrowPros will provide Delta 9 with production consultation on there Manitoba based facility as well as patient acquisition services focused primarily in Quebec.
In addition, GrowPros will grant Delta 9 a right of first refusal to purchase all dried marijuana product produced at the Quebec Facility for a period of 2 years from the date of acquisition of the production license.
“Over the past year, we have worked closely with Delta 9 to establish a strong and mutually beneficial business relationship”, says Ryan Brown, CEO of GrowPros. “This Agreement is the culmination of that hard work and sets the foundation for GrowPros and Delta 9 to continue collaborating on a variety of business opportunities.”
“We are very pleased to be working with GrowPros to expand our operations into Quebec and Eastern Canada”, confirms John Arbuthnot, Vice President of Delta 9. “With a wealth of experience and resources, GrowPros is a great strategic partner for us. We see a bright future for both our companies,” Mr. Arbuthnot explains.
The Canadian Securities Exchange (CSE) has not reviewed this news release and does not accept responsibility for its adequacy or accuracy.
Forward-looking statements
Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company’s ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company, through its wholly-owned subsidiary, GrowPros MMP Inc., to obtain a licence for the production of medical marijuana; failure to obtain sufficient financing to execute the Company’s business plan; competition; regulation and anticipated and unanticipated costs and delays, and other risks disclosed in the Company’s public disclosure record on file with the relevant securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that cause results or events not to be as anticipated, estimated or intended. Readers should not place undue reliance on forward-looking statements. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.
]]>“Delta 9 is very excited to join CMCC in creating and implementing the highest standards of safety, quality, and patient access within Canada’s medical cannabis industry,” said John Arbuthnot, Vice President and RPIC, Delta 9.
CMCC is a medical cannabis industry association representing licensed producers and other stakeholders who are committed to building long-term trust with patients by ensuring the highest standards of ethical behaviour across the entire medical cannabis supply chain, including the interactions between licensed producers and physicians.
“We are pleased to welcome the Delta 9 team to CMCC,” said CMCC interim executive director Philippe Lucas. “Every new member further galvanizes our ability to bring about positive, ethical change in the medical cannabis industry. We look forward to continuing to advocate for federal policies and industry business practices that are in the best interest of Canadian patients.”
About Delta 9
Delta 9 Bio-Tech is a commercial producer of high quality medical cannabis products licensed under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR). Delta 9 currently operates an 80,000 square foot production and distribution facility in the Winnipeg area, serving approximately 1,000 registered clients across Canada.
About the Canadian Medical Cannabis Council (CMCC)
The Canadian Medical Cannabis Council (CMCC) is an industry group representing stakeholders who are committed to advancing the highest standards of integrity, safety, quality, access, security and research within Canada’s medical cannabis industry. All CMCC members are required to adhere to a Code of Ethics designed to serve patients’ best interests.
-30-
For more information, or to speak with a representative of the Canadian Medical Cannabis Council, please contact:
Marlo Taylor
(416) 425-9143 ext. 11 marlo.taylor@energipr.com
Delta 9 has taken a patients first approach to its business development. Their primary mission is to produce and offer only the highest quality, organic, medical cannabis products, utilizing sustainable and standardized production practices. Katie Cameron, a Delta 9 Customer Care specialist, notes that, “buying ones medicine shouldn’t be a painful experience, it is our goal to provide our patients with a consistent, helpful, and friendly customer service experience.”
Produced with award winning genetics from the industry‘s leading suppliers, Delta 9 has the largest cannabis product offering in Canada with upwards of 33 different strains currently in development. Delta 9 is also committed to assisting patients on low incomes and disability by subsidizing the cost of their medicine up to 50%.
Delta 9 intends to help raise the profile of Cannabis as a medicine, bridging the gap between anecdotal benefits and evidence based medicine. The Canadian Medical Association (CMA) and Health Canada have expressed concerns over a lack of clinical evidence for the medical use of cannabis.
Company President, Bill Arbuthnot, confirmed that, “There is sometimes a misconception that there has been very little in the way of clinical research conducted. We would like to help make doctors as comfortable as possible with prescribing cannabis as medicine. We currently have a database of upwards of 100 peer-reveiwed clinical trials, studies, and surveys on medical cannabis available on our webpage covering conditions ranging from glaucoma to cancer to chronic pain. We look forward to working with doctors to get them the most complete and up to date research available”
Currently, approximately 40,000 people are authorized to use medical marijuana in Canada, and that number is expected to increase to 450,000 by 2024. Delta 9 Vice President and COO, John Arbuthnot, confirmed “there’s no question, it’s a “growing” business.”
When asked about his company’s ability to meet demand John said the company, “currently we have the capacity to supply approximately 1000 patients. We plan to more than triple our output capacity over the next 9-12 months, adding 15 – 20 full time job positions in production, client care, and marketing. “We’re very excited to have our first crop ready for sale by May-June of this year and to provide our clients across Canada with exceptional products and service.
In the meantime, patients can access the required application forms and medical documents on the Delta 9 website and browse the products section at www.delta9.ca.
]]>