Toronto, Canada, May 31, 2018 – WeedMD Inc. (TSX-V:WMD) (OTC:WDDMF) (FSE:4WE) (“WeedMD” or the “Company”), a federally-licensed producer and distributor of medical cannabis, has reported its financial and operating results for the first quarter ending March 31, 2018.
WeedMD is pleased to report revenues of $1.14 million for the first quarter of 2018. Revenues consisted of the sale of dried medical cannabis, live cannabis plants and cannabis oils, to both patients and through wholesale B2B channels. The Company also maintained a strong cash balance of $48 million as of the end of the quarter.
“With sales up 33% quarter over quarter, we are incredibly proud of what our team has achieved and we look forward to continued strong revenue growth throughout the remainder of 2018,” said Keith Merker, CFO of WeedMD. “We are nearing the second-site Health Canada Cultivation License for our large-scale, state-of-the-art, greenhouse expansion and are pleased to confirm that we have continued to successfully ramp up our operations, with our headcount increasing by an impressive 60% since the start of the year. Our recent merger announcement with Hiku and its coast-to-coast brand and retail footprint will enable the Company to be vertically integrated and control the full supply-chain, from seed to sale.” (See Hiku Brands Company Ltd. (CSE:HIKU) and WeedMD merger press release here).
|For the three month period ended March 31st||2018||2017|
|Net Comprehensive Loss||1,446,497||1,192,474|
|Adjusted Operating Loss¹||1,279,439||1,070,369|
|Cash Used from Operations||652,783||429,985|
|Loss per Share (Basic and Fully Diluted)||0.01||0.03|
|As at||March 31, 2018||December 31, 2017|
|Cash and Cash Equivalents||48,460,059||24,692,678|
¹Adjusted Operating Loss is not a recognized measurement under IFRS and this data may not be comparable to data presented by other companies. Management believes Adjusted Operating Loss to be an important measure of the Company’s day-to-day operations, by excluding non-cash gains and losses and/or non-recurring items.
WeedMD continues to be on budget with the retrofit of Phase I of its 610,000 sq. ft. state-of-the-art greenhouse in Strathroy, ON. The Company anticipates securing a license for this facility by the end of the second quarter of 2018.
- Situated on 98-acres of property with 610,000 sq. ft. or 14 acres of existing greenhouse structure in addition to ancillary buildings.
- Phase I retrofit represents 220,000 sq. ft. of tempered glass greenhouse which is less than two years old.
- With features such as full climate-control, supplemental lighting and black-out curtains, WeedMD has combined the best of indoor and greenhouse cultivation to create a true “hybrid” greenhouse
- Equipped with an on-site unlimited supply of natural clean water.
- Modern fertigation system runs on full-recirculation loop which provides an accurate, innovative computerized method of monitoring plant nutrients and water. This will ensure that water is recycled and reused and does not leach into the surrounding area and that WeedMD meets its environmental responsibilities.
- Boiler exhaust is scrubbed of CO2, cleaned and then utilized for production providing significant cost savings and ensuring optimal plant growth.
Operational and Corporate Highlights
- Closed the previously announced, oversubscribed $34.5 million bought deal equity financing.
- Commenced the sale of cannabis oil products under the company’s EntourageTM and AxisTM brands.
- Submitted an application to obtain a Health Canada Dealer’s Licence under the Controlled Drugs and Substances Act.
- Appointed Kevin McGovern, chairman of McGovern Capital and founder of the beverage company SoBe, the fastest growing beverage company ever in the United States, as a board director.
- Appointed Dr. Jonas Vanderzwan, a physician with more than 15 years of primary care experience, as Medical Director and Chair of the Clinical Advisory Board.
- Completed strategic investments in Blockstrain Technology Corp. (TSX-V:DNAX), which has developed a comprehensive cannabis genetics archiving platform, and Snipp Interactive Inc. (TSX-V:SPN), a global loyalty and promotions company focused on disruptive engagement platforms for consumers.
- Ramped up the retrofit of a large-scale, fully-funded greenhouse expansion comprising 610,000 sq. ft., with 220,000 sq. ft. coming online in 2018. The expansion remains on-track and within budget, with first harvests expected in Summer 2018.
- Entered into a partnership with the Technion-Israel Institute of Technology, joining the world-renown Cannabis Database Project, and collaborating on research of 25 of WeedMD’s strains
- Purchased the land and building of the Aylmer facility for $1,500,000.
- On April 19, 2018, entered into a definitive agreement to merge with Hiku Brands, bringing together two highly-complementary businesses and creating a unique and market-differentiating vertically integrated company with an industry-leading portfolio of brands, growing retail footprint, and significant cannabis production capabilities. For more information on the transaction, please see Hiku’s investor presentation.
The Company’s financial statements and related management’s discussion and analysis for the period are available under the Company’s profile on SEDAR at www.sedar.com. All amounts are expressed in Canadian dollars and are in accordance with International Financial Reporting Standards unless otherwise noted.
About WeedMD Inc.:
WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer and distributor of medical cannabis and oils under the Access to Cannabis for Medical Purposes Regulations (ACMPR). The Company operates a 26,000 sq. ft. indoor facility in Aylmer, Ontario, and is awaiting its second-site cultivation license for its greenhouse facility located in Strathroy, Ontario, representing 610,000 sq. ft. or 14 acres under glass. WeedMD has entered into supply agreements in addition to strategic relationships with established cannabis brands. The Company is focused on providing medical cannabis to the seniors’ markets in Canada through its proprietary seniors care program. It is dedicated to educating healthcare practitioners and furthering public understanding of the role that medical cannabis plays – including as it pertains to regulatory requirements, indications and potential side effects.
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For further information, please contact:
Keith Merker, Chief Financial Officer
Tel: 519-765-2440 Ext. 222
To learn more, visit us at www.weedmd.com
For Media Inquiries:
Margin Communications & Public Relations
Cautionary Statement on Forward-Looking Information
This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Hiku and WeedMD to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to our expectations with respect to: the timing and outcome of the Transaction; the anticipated benefits of the Transaction to the parties and their respective security holders; impact of the Transaction and anticipated growth of the combined entity, including planned capacity; and the anticipated timing of the WeedMD shareholder meeting. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, Hiku and WeedMD have provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare and mail security holder meeting materials; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholders approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and other expectations and assumptions concerning the Transaction. There can be no assurance that the Transaction will occur, or that it will occur on the terms and conditions contemplated in this news release. The Transaction could be modified, restructured or terminated. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of the parties are included in reports on file with applicable securities regulatory authorities.
The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date. Hiku and WeedMD do not assume any obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, except as required by applicable law.
None of the TSX Venture Exchange or the Canadian Securities Exchange and their Regulation Services Providers accept responsibility for the adequacy or accuracy of this release.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of WeedMD and Hiku should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE