SpeakEasy Cannabis Club Ltd., a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act is pleased to announce that it has reported initial sales and net earnings from the sales of its indoor grow operations. The information in this release should be read in conjunction with the Company’s unaudited condensed interim consolidated financial statements and associated management discussion and analysis (“MD&A“), which are filed and available on the Company’s website at www.speakeasygrowers.com and under the Company’s profile on SEDAR at www.sedar.com.
“We are pleased to report our earnings for Q3 2021, marking this the second quarter of reported revenues. Although we are still ramping up our sales profile, we still maintained a positive gross margin. The positive operating results were offset by a loss on the fair value adjustment to biological assets, a non-cash item. It is common to experience such adjustments during a time when the Company is transitioning to full production and processing”, stated Malcolm Davidson, CEO.
“Looking ahead to Q4, we are already in the process of increasing our processing and production profile, enabling us to keep up with the overwhelming demand for our products. With the new processing equipment, which we expect to be fully commissioned in early July, we expect to be able to quadruple our capacity to process extracts. Our remaining inventory on hand from the 2020 harvest is perfect material for processing into extracts and combined with our increase in capacity, we expect to be able to process our remaining inventory on hand just in time for the 2021 harvest. Further, we are well on our way with our preparations for the 2021 outdoor grow operation. We expect our 2021 harvest yield to double the 72,000 kgs that were harvested in 2020. I would like to take the opportunity to personally thank our team for their persistent hard work and dedication to SpeakEasy to make our operations a success.”
Financial Highlights for the nine months ended April 30, 2021
- Revenue from the sale of flower, extracts, and services $1.65M, 100% increase over the comparable period
- Gross profit before fair value adjustments $1,008,604
- Operating expenses $5,808,018
- Total of 383,593 grams sold
- Loss per share of $0.02
- Cannabis inventory of $11,352,687
- Working capital of $11,246,092
- Total assets of $36,394,764
- Total liabilities of $9,432,914
- Invested over $2.5M in growing facilities and equipment.
Outlook
- Product and sales have reached the projected maximum production of indoor flower, extracts and pre-rolled joints and is fully sold out for the foreseeable future.
- Pre-roll production continues to ramp up to fulfill supply orders.
- The outdoor harvest of 72,000 kg is being processed daily with phase one equipment, approximately 30% has now been extracted and is in various stages of preparation for product creation and sale.
- New extraction equipment recently purchased by our partner, RC Frontier Labs Ltd., is scheduled to be fully operational in early July, increasing potential production capacity for extracts by up to 400%. The Company anticipates that it will have processed the entire 2020 crop by the end of this calendar year.
- Relying on the new extraction equipment capabilities, our anticipated 2021 crop size and current and future sales projections, SpeakEasy expects to be able to process and sell its 2021 crop by November 2022.
- Once the new extraction equipment is in place, the Company has the input material and processing capabilities to produce over 3,000,000 grams of refined concentrate products over the next 12 months.
- Currently, the extracts represent the highest margins in our product line.
- Buildings that have been under construction over the last 3 years are nearing completion and, once completed, will represent over 62,000 square feet of additional licenced production and processing area.
- Indoor flower production is expected to increase to approximately 365 kg per month by October 2021 and to over 650 kg by December 2021.
- The Company is focused on developing and releasing consumer facing brands in 2021, which is anticipated to contribute significantly to the Company’s 2022 revenues.
About SpeakEasy Cannabis Club Ltd.
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.
