SpeakEasy Signs Significant Milestone Processing Agreement

Published: April 7, 2021

SpeakEasy Signs Significant Milestone Processing Agreement

SpeakEasy Cannabis Club Ltd., a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act, announced it has signed a Processing Agreement with a Canadian Licensed Producer whereby the Company has agreed to supply to and process cannabis for the LP with value added products, including extracts, pre-rolls and packaged flower from our indoor and outdoor facilities, for potential revenues and related costs of up to $10,000,000 and $2,600,000 respectively. Under the terms of the Agreement, the parties have identified a list of specified products which are considered to be exclusive products under the Agreement. The initial term of the Agreement is six (6) months with an option to extend for an additional six (6) month term upon mutual agreement of the parties.

Founder, Marc Geen states, “This contract represents a significant shift in SpeakEasy’s business operations. Years of building and growing the Company has finally culminated in our ability to process and sell significant volumes of flower and value-added products that will be sold in the Canadian recreational market. We will continue to prepare for our amended sales licence, expected within the next 30-45 days, that will allow us to sell value-added products directly into the recreational market, this exclusivity arrangement does not affect our ability to do that. This Processing Agreement adds additional revenue visibility and financial de-risking for a significant portion of the expected production from the on-going growth of our cannabis complex.”

Sales of Sun-Grown Flower and Value-Added Products

Creation of extracted products from our outdoor flower have created interest in the market and have now translated into SpeakEasy’s first large Processing Agreement. Concentrates, pre-rolls and flower as a finished product constitute the majority of the products being supplied. The Agreement is expected to increase in volume month over month for the 6 month term.

Marc Geen, Founder, additionally states, “We have begun the process of registering with several provinces for licences to sell into the recreational market and expect to be signed on soon. Once registered, SpeakEasy will be able to sell under its own brand into those provinces. White labeled, finished products and the supply of bulk processed material is expected to remain an important part of our business plan but supplying finished products under our own brands directly to consumers is an exciting prospect that is just around the corner.”

About the crop

Products created from our 60 acre outdoor harvest are of very high quality and because of the low-cost per gram material, we are able to target the lowest price of finished products in the market. Products such as live resin sugar, vape, diamonds and sauce created from our 30,000 pounds of what we believe, is the industries largest inventory of fresh frozen material, have been well received and plan to introduce into the market at or below the lowest price currently being sold.

“Our outdoor flower is keeping exceptionally well and everything we are creating from it is outstanding. Our decision to use these specific genetics, harvest and store the way we did has worked out better than I had hoped. It’s hard to go wrong with whatever we create when we start with such beautiful material. This Processing Agreement, while significant, still leaves us with sufficient product to expand into provinces with our own brands and not risk running out completely before our next harvest, which is expected 6 months from now. I usually take a line or two to thank the incredible members of our SpeakEasy family and this release is no exception. Every day is a pleasure to work with you all and the work we are accomplishing together is inspiring, thank you for everything” says Founder, Marc Geen.

SpeakEasy Cannabis Club Ltd. holds a cultivation, processing and sales licence issued by Health Canada under the Cannabis Act. SpeakEasy owns 290 acres of land in Rock Creek, British Columbia, and leverages five generations of farming experience in B.C. as well as its favourable location to grow and process high-quality cannabis products at low cost. SpeakEasy cultivates small batch, high quality craft cannabis at scale in a portion of its 63,200 square foot indoor cannabis complex and has completed its harvest of its 60-acre outdoor field. Total yearly production of cannabis flower and biomass is projected to be in excess of 70,000 kilograms per year once in full production.