The Green Organic Dutchman Holdings Ltd., a producer of premium certified organically grown cannabis, announced preliminary unaudited revenue for fourth quarter 2020 and provided an update to the previously provided twelve-month Canadian revenue forecast for the period November 1, 2020 to October 31, 2021, as disclosed in the shelf prospectus dated November 27, 2020 (the “Prospectus Forecast”).
Preliminary and unaudited consolidated gross revenue for the fourth quarter 2020 is expected to be approximately $10.9 million, reflecting growth of 235% over the prior year, and an increase of 91% over the third quarter of 2020. This reflects the significant progress and growth achieved in Canadian operations and sales, which accounted for $8.6 million of the fourth quarter 2020 gross revenue total.
“Our increase in revenue reflects the collective efforts of the TGOD team, resulting in improvements in the quality of our flower which is being well received by the market,” said Sean Bovingdon, CFO and Interim CEO of TGOD. “We are also encouraged by the traction we are gaining with our Highly Dutch flower and hash, and look to continue expanding distribution of these along with new premium flower strains and 2.0 product offerings, though we are monitoring the effects that the COVID crisis is having on this progress.”
While the revenues achieved for the fourth quarter were encouraging, the Company continues to assess the economic climate post year-end, specifically with many provincial governments imposing lockdowns and stay-at-home orders due to COVID-19, and some revising listing mandates. The Company believes these measures will hamper the rate of revenue growth in Canada that was expected in the first half of 2021 and impact the timing of market entry for its new sativa strains and some 2.0 products. Without these conditions, TGOD would expect to be able to meet the Prospectus Forecast, however TGOD now notes an increased risk in achieving the Prospectus Forecast of $61.5 million net sales for the period November 1, 2020 to October 31, 2021. As such, it expects revenue to grow at a slower rate with the revised Canadian net revenue forecast for that period being in a range of $40 million to $45 million. The Company expects that due to these changing conditions, it will not meet its previous expectation of achieving positive monthly Canadian operating cashflow by the end of Q1 2021. Consequently, TGOD is proactively managing costs to correlate with sales activity levels and still expects to achieve positive monthly Canadian operating cashflow later in 2021.
The Green Organic Dutchman Holdings Ltd. is a premium certified organically grown cannabis company focused on the health and wellness market. For more information on The Green Organic Dutchman Holdings Ltd., please visit www.tgod.ca.
