Delta 9 Reports Record Revenue for Q1 2019

Published: June 4, 2019

Delta 9 Reports Record Revenue for Q1 2019

Delta 9 Cannabis Inc. has announced financial and operating results for the first quarter of 2019.

Financial Highlights for Q1, 2019

  • Record operating revenues of $5.63 million for the first quarter of 2019, up 1,595%, from $332,107 for the same quarter last year.
    • Sequential net revenues increased 7% from $5,270,217 for the three-month period ending December 31, 2018.
    • Sequentially the cost of sales of cannabis products improved by 5% to $3.82 million for Q1, 2019 from $4.02 million for the fourth quarter of 2018.
  • Record gross profit of $4.22 million for the first quarter, 2019, up 1,983%, from $202,695 for the same quarter last year.
    • Sequential gross profit increased 26% from the three-month period ending December 31, 2018
    • Gross profit margin was 75% for Q1, 2019
  • Net income for Q1, 2019 was $11.11 million or $0.13 per share versus a net loss of ($1.92) million or ($0.02) for the three-month period ending March 31, 2018.
    • Management would highlight the one-time gain on the disposal of the Company’s investment in the Delta West Limited Partnership (the “Delta West LP”) as contributing a significant non-cash gain during the period.
    • Without the one-time gain, Delta 9 recorded a loss from operations of ($946,180) or ($0.01) for Q1, 2019 versus a loss of $1,923,263 or ($0.02) for the same period last year.
  • The Company reported a strong financial position, with working capital of $18.83 million and total assets of $65.35 million.

“Delta 9 is well positioned with high growth revenue streams from our wholesale, retail and business-to-business operations to continue to provide strong financial results to shareholders this year,” said John Arbuthnot, CEO of Delta 9.  “2019 will continue to be an exciting year for the Company as we focus on expand our operations to eventually yield 16,000 kg of cannabis per year and begin selling our cannabis products in Saskatchewan and Alberta.

Selected Quarterly Information:

Consolidated Statement of Net Income

Q1 2019

Q1 2018




Cost of Sales



Gross Profit Before Unrealized Gain from Changes In Biological Assets



Unrealized gain from changes in fair value of biological assets



Gross Profit




General and Administrative



Sales and Marketing



Share based Compensation



Total Operating Expenses



Loss from Operations



Other Income/ Expenses

Finance Income (cost)



Rental and other income



Gain on derecognition Westleaf investment


Net Income



Other comprehensive Income

Fair value change in Westleaf Investment


Net Income and Comprehensive Income



Earnings per Share (basic)



Weighted average number of shares outstanding



Operational Highlights for Q1, 2019

  • 2019 expansion strategy increased the number of Delta 9 grow pods approved by Health Canada by 31% to 202, increasing anticipated annual production capacity to over 5,350 Kg of dried cannabis flower.
  • Delta 9 sold its 50% interest in the Delta West Limited Partnership to Westleaf Cannabis Inc. for 5.6 million Westleaf shares that had an established a value of $14.95 million as of January 25, 2019, the date of sale.
  • Delta 9 announced plans to increase its annual cannabis production capacity to 60,000 kilograms per year by 2022 and for the expansion of its retail store network.
    • Delta 9 now operates three retail stores, two in Winnipeg, Manitoba and one in Brandon, Manitoba. A fourth retail store in Thompson, Manitoba is scheduled to open in Q3, 2019.
  • Delta 9 has received approval from the Saskatchewan Liquor and Gaming Authority to supply cannabis directly to the province’s retail and wholesale markets.

Subsequent second quarter events

  • May 24, 2019 – Alberta Gaming, Liquor & Cannabis (AGLC) has provided Delta 9 with authorization to supply cannabis to AGLC for retail sale in the province of Alberta. The Company plans to make its first shipment of cannabis for retail sale in Alberta in the second quarter of 2019.
  • May 22, 2019 – Delta 9 received Health Canada approval to place 48 new “Grow Pods” from its Phase II expansion into production. This will bring the total number of Grow Pods approved by Health Canada to 202. This will increase the Company’s estimated production capacity by 1,150 kilograms of dried cannabis flower per year. The anticipated production capacity for Delta 9’s facilities is anticipated to increase to 5,350 kilograms per year going forward.
  • May 9, 2019 – Company received notice from Health Canada that it has been granted an export permit to sell starting materials to authorized cannabis license holders in Australia and Tasmania. Delta 9 has two pending sales contracts for cannabis plants to licensed producers in Australia. These sales would be Delta 9’s first international cannabis product sales.

Discussion of Operations: 

Key Performance Indicators

For the three-month period ending 
March 31, 2019

Production/ Wholesale Unit

Total Grams Produced


Cash Production Cost Per Gram


Total Cash Cost Per Gram


Total Grams Released for Sale


Total Grams Sold (Recreational Wholesale)


Total Grams Sold (Medical)


Avg Selling Price per Gram


Retail Unit

Total Grams Sold (Retail)


Avg Selling Price per Gram


Number of Transactions Processed


Avg Transaction Size


Unique Website Visitors (


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