Delta 9 Reports Revenue for Q2 2019

Delta 9 Cannabis Inc. have announced financial and operating results for the second quarter of 2019.

Financial Highlights for Q2, 2019

• Record operating revenues of $8.9 million for the second quarter of 2019, up 1,142%, from $715,746 for the same quarter last year.
  • Sequential net revenues increased 58% for the second quarter of 2019 compared to $5,632,184 in Q1, 2019.
• Adjusted EBITDA¹ was $(663,705) up $1.3 million or 65% compared to $(1,978,778) in Q1, 2019.
• Gross profit² of $2.9 million for the second quarter of 2019, up 780%, from $335,226 for the same quarter last year.
  • Gross profit margin was 33% for Q2, 2019.

“Management would highlight the improvement of $1.3 million in Adjusted EBITDA loss over the past two quarters as a positive indication of the performance of the Company’s operating businesses in the wake of legalization of recreational use cannabis on October 17, 2018,” said John Arbuthnot, CEO of Delta 9. “We believe our Q2 results demonstrate the continued strength of our business model as we pursue a path towards profitability and disciplined growth for this year.”

Financial Highlights for the first half of 2019

• Record operating revenues of $14.5 million, up 1,286%, from $1.0 million for the same period last year.
• Gross profit2 of $4.8 million, up 973%, from $444164 for the same period last year.
  • Gross profit margin was 33% for the first half of 2019.

“Delta 9 will continue to drive sustainable long-term shareholder value by leveraging its strong brand positioning in Western Canadian markets, expanding our various wholesale supply contracts and scaling up our cultivation operations said John Arbuthnot,” CEO of Delta 9. “We are taking a responsible and compliant approach to growing our business to build an authentic Delta 9 brand as we pursue retail opportunities in the Western Canadian market place.”

Operational Highlights

• On May 20, 2019, the Company received approval from Health Canada for an additional 48 of its proprietary “Grow Pods”, bringing its total number of Grow Pods approved by Health Canada to 202.
  • The additional 48 Grow Pods will increase production by 1,150 kilograms per year of dried cannabis flower production, bringing the Company’s overall anticipated production capacity to 5,350 kilograms of dried cannabis flower per year.
• There are now a total of 297 Grow Pods within its Winnipeg production facility (the “Delta Facility”).
• The Company is continuing with its planned Phase II expansion of the Delta Facility to increase cannabis production to 16,500 kilograms per year.

“The 297 Grow Pods that Delta 9 now has in in our production facility will bring our anticipated production capacity to 7,626 kilograms once all the pods are approved by Health Canada for production,” said John Arbuthnot, CEO of Delta 9.

Selected Quarterly Information:

“Additionally, Delta 9 is looking forward to being up listed on the Toronto Stock Exchange,” said John Arbuthnot, CEO of Delta 9. “This will be a major milestone for the evolution of our company and should enhance the financial opportunities for our shareholders.”

The following chart provides a breakdown of the Company’s revenue by segment:

Discussion of Operations for Q2 versus Q1, 2019: 

A comprehensive discussion of Delta 9’s financial position and results of operations is provided in the Company’s Management Discussion & Analysis for the second quarter and first half of 2019 filed on SEDAR and can be found at www.sedar.com.

Q2 Results 2019 Conference Call

Delta 9 has scheduled a conference call to discuss the results for second quarter of 2019. The conference call will be hosted August 28, 2019 at 9:00 a.m. Eastern Time by John Arbuthnot, Chief Executive Officer and Jim Lawson, Chief Financial Officer, followed by a question and answer period.

Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. Delta 9’s wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada.