Sugarbud Craft Growers Corp. provided a corporate operating update and comments regarding its outlook for 2021.
Corporate Operating Update
“2020 was a pivotal and productive period for the Company’s overall scale up and growth plans,” said Sugarbud CEO John Kondrosky. “In addition to receiving our amended sales license for dried cannabis in Q3 2020, the Company formally entered the adult-use recreational cannabis market in earnest in Q4 2020 – after securing important supply agreements with the Provinces of Saskatchewan, Alberta and British Columbia. In the final weeks of the year, we received our first $1.0 million in purchase orders,” continued Mr. Kondrosky.
Subsequent to year end, the Company entered into supply agreements with the Province of Ontario and the Yukon Territory. With a clear line of sight on revenue generating supply and harvests now occurring once every month and a half at its Stavely cultivation facility, the Company has firmly established steady state commercial operations and is now operating at a level sufficient to meet the Company’s positive revenue and EBITDA objectives for 2021.
“We are pleased with our progress to date after our first full year of operations and believe that we have established a strong platform to rapidly accelerate the Company’s continued growth in 2021,” concluded Mr. Kondrosky.
2021 Outlook – Quality Over Quantity
The Canadian adult-use recreational cannabis market continues to evolve at a rapid pace as consumer buying practices and preferences become more refined and informed. Despite volatility in the sector, the Company expects that the growth and momentum the recreational cannabis sector saw building in the latter half of 2020 will continue in 2021. The Company believes that the most significant drivers of growth will be a holistic commitment to premium quality and consumer satisfaction over volume.
“Sugarbud puts the consumer at the center of everything we do. Our experience, market data and both retailer and consumer feedback confirm that our focus is both well-aimed and critical to the success of the Sugarbud brand,” stated Mr. Kondrosky.
Rather than focus solely on general categories such as “value priced” or “premium products”, the Company believes that a relentless pursuit and commitment to total value and consumer satisfaction across multiple product and consumer preference attributes is the more prudent pathway forward towards a sustainable and profitable business.
“We are producing exceptional top-quality products for an intelligent consumer,” Mr. Kondrosky notes. “We recognize that our consumers have different interests, diverse hobbies, busy jobs and are pursuing all kinds of things to make their lives even fuller. We understand that we must work hard to find and earn a place in their busy day”, continued Mr. Kondrosky.
“Consequently, we have set a high bar for ourselves and spend a lot of time making sure that what we produce measures up to consumer expectations,” concluded Mr. Kondrosky.
The Company believes that the recent drive to split the market between the binary choice of “price/value” versus “premium”, is short-sighted. Along with a focus on singular product attributes such as potency alone, Sugarbud believes this does a disservice to the consumer.
“As the market continues to mature, we believe that the time and effort we are putting into providing our target consumers with a balanced approach to total product quality at a fair price will drive sustainable growth. This overarching commitment to consumer excellence will play a fundamental role in eliminating the need for consumers to continue to access the black market,” added Mr. Kondrosky.
“Based on positive feedback received from the market to date, we believe that we are well-positioned to continue to expand our market share and accelerate revenue growth in 2021,” concluded Mr. Kondrosky.
Critical Operating Priorities for 2021
Operationally the Company has the existing capacity to achieve its business objectives for 2021 and has the flexibility and agility to rapidly expand capacity within its existing licensed Stavely facility to meet an increase in demand should it be required.
The Company maintains an agile and scalable operating model and has several facility build-out options which it can quickly deploy, when market demand requires. In order to fully realize significant growth opportunities and continue to expand market share in 2021, the Company will continue to leverage existing operational capacity and expand commercial capacity for growth by:
- Expanding our geographic reach to include new provincial markets including Ontario. READ: Sugarbud Enters Canada’s Largest Recreational Cannabis Market, Signs Supply Agreement with Ontario
- Leveraging the quality of our exceptional dried flower portfolio to expand into Cannabis 2.0 products, such as vapes and inhalable concentrates. READ: Sugarbud Accelerates Cannabis 2.0 Product Launch Via Purchase and Supply Agreement with CannMart Inc.
- Continuing to build product excellence around our genetic portfolio.
- Partnering with leading sales and distribution agencies to maximize the visibility and awareness of the Sugarbud brand within its target markets. READ: Sugarbud Expands National Distribution Reach, Announces Sales Agency Partnership With Velvet Management Inc.
- Building Sugarbud’s connection to its retail partners and consumers – to increase the penetration and adoption of its products in current target markets.
- Investing in targeted new product and portfolio development to accelerate growth.
- Continuing to maintain and adhere to strong financial discipline and operating controls that management believes will deliver superior operating results. Instead of focusing on rapid expansion and scale-up, the Company continues to approach future scale using a self-sustaining revenue first model – that both places a priority on a healthy balance sheet and supports controlled future expansion.
Sugarbud is an Alberta-based, consumer-driven boutique craft cannabis company focused on the cultivation and production of superior, select-batch, craft cannabis products. Our vision and mission are to become a trusted and well-respected consumer brand renowned for providing exceptional high-quality craft cannabis products to legal markets by delighting the most discerning of cannabis consumers.
The Sugarbud Craft Cannabis Collection offers consumers “Hand-Crafted Cannabis for a New Era”. The Company is proudly Albertan and is proud to share Western Canada’s long tradition of exceptional craft cannabis with the most discerning of enthusiasts. Sugarbud strives to define the intersection of product craftsmanship, quality, and value for consumers in the Canadian craft cannabis space.