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Edited Transcript of TRST.TO earnings conference call or presentation 14-May-19 12:00pm GMT

Q1 2019 CannTrust Holdings Inc Earnings Call

Jul 10, 2019 (Thomson StreetEvents) -- Edited Transcript of CannTrust Holdings Inc earnings conference call or presentation Tuesday, May 14, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Greg Guyatt

CannTrust Holdings Inc. - CFO

* Peter Ralph Aceto

CannTrust Holdings Inc. - CEO

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Conference Call Participants

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* Douglas Miehm

RBC Capital Markets, LLC, Research Division - Analyst

* Gordon Lee Johnson

The Vertical Trading Group, LLC, Research Division - MD & Analyst

* Graeme Kreindler

Eight Capital, Research Division - Research Analyst

* Jesse Pytlak

Cormark Securities Inc., Research Division - Analyst of Institutional Equity Research

* Rahul Sarugaser

Paradigm Capital Inc., Research Division - Former Analyst of Healthcare and Biotechnology

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Presentation

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Operator [1]

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Good morning, everyone, and welcome to CannTrust's First Quarter 2019 Earnings Call. (Operator Instructions) CannTrust would like to remind listeners that the company's remarks today may contain forward-looking statements that reflect the company's current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause results to differ materially from those projected in the forward-looking statements. For more information on the risks and uncertainties relating to forward-looking statements, please refer to the CannTrust public filings which are available on SEDAR. I'd now like to turn the call over to CannTrust's CEO Peter Aceto. Please go ahead, Peter.

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [2]

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Thank you, very much operator, and good morning to everyone. Thank you for taking the time to join our conference call for the first quarter of 2019. I have with me today Greg Guyatt, our Chief Financial Officer. So I'd like to start out by telling you really how thrilled I am with the progress that CannTrust has made in the last few months and that the team and I are getting more excited every day about the opportunity that lay ahead for this company, and the tools that we have in place to see those opportunities. The opportunity for CannTrust, it really is significant both in Canada and globally, and today we're in a better position than ever to deliver shareholder value and become a global provider of innovative cannabis products and brands that people want and love. In order to fulfill this vision, we will continue being thoughtful and bold. And we will leverage our core competencies, which are: Our strong medical leadership; our premier operating capabilities; our industry leading research and innovation; our dynamic partnerships and the management team, that we've compiled.

As you all know, we recently completed a successful equity offering raising gross proceeds of USD 170 million excluding the over allotment option or over CAD 220 million. This was a significant milestone for CannTrust. We're very pleased with the quality of the investors that we've added through this process. These top tier global investors recognize the quality of our operations and demonstrated their belief in our long term strategic plan by making sizable investments. This infusion of capital will fully fund our stated growth plans, offer CannTrust financial flexibility as we secure new international relationships and partnerships and it significantly de-risks our ambitious growth plans. This is an enviable position to be in to say the least.

Now in our last call, we identified our five strategic priorities. They are to: 1, increase our low cost production capacity; 2, enhance our extraction capabilities; 3, continue to develop innovative products, brands and intellectual property; 4, invest in international expansion; and 5, maximize existing and establish new strategic partnerships. We executed against most of these strategic priorities in the first quarter of 2019. Firstly, with respect to increasing production capacity, CannTrust delivered a record of over 9,400 kilograms of production in the first quarter from our perpetual harvest greenhouse. This is a 96% increase over Q4 2018. This increased production is the result of our investment into people, training and facilities, and our company wide dedication to producing the highest quality cannabis in the market, today.

More specifically, we purchased, new dry trimming equipment, we've increased our production shift toward the goal of reaching 24/7 processing, we've hired additional personnel with expertise across our supply chain and quality assurance, and made process improvements to increase our throughput, and we still have many levers to pull. We're transitioning to new packaging, we've acquired automated excise stamp equipment and we're automating processes within our packaging division as well.

In April, we received Health Canada approval for the remaining 20% of our Phase II greenhouse. We expect that production will continue to increase to the full promised annualized capacity of 50,000 kilograms in the third quarter of this year. Now with regard to our Phase III expansion, we're pleased to report that we completed the RFP process, we selected our key vendors and we made deposits for equipment and structures. Our Phase III facility will be a true state-of-the-art perpetual harvest greenhouse. We will employ automation and robotics to reduce manual inputs. Our design will deploy a high-tech HVAC system that will recycle air to better maintain climate and required CO2 levels, smart glass to reduce shadows and increase light transmission, and configurations to our layout that will allow for more benches, more plants and less wasted space.

We also continue to be very excited about taking leadership in the Canadian outdoor cultivation. Recall last quarter, that we outlined a plan for outdoor cultivation, and we fully delivered on that plan by closing the purchase of 81 acres of land in British Columbia.

We've made a great deal of progress here accomplishing the following: We fenced the properties, we've implemented all required security measures, we've moved and hired staff locally, and we're currently working on irrigation and preparing the site. We've also submitted our complete application to Health Canada and are awaiting their approval. We expect that our fall harvest from this property will add a further 75,000 kilograms of production.

Now remember, our goal here is to leverage our leadership in extraction capability and to produce cannabinoids at a significantly lower cost, specifically for the new formats and products that we plan to bring to market once they're permitted.

With our additional 160 acres, which we have under letter of intent, which will close in the near term, we expect that outdoor cultivation can contribute between 100,000 kilograms and 200,000 kilograms of production capacity on annualized basis. We expect to be producing at that level in 2020.

Now turning to extraction. We've tripled our capacity to produce extraction based products. As we're a leader in the manufacture and sale of oil and capsules, this positions us extremely well, as regulations permit new product formats. Quality extraction is a significant core competency for CannTrust that we've built over the last 3 years. And leading in this product vertical will remain a CannTrust priority. We remain number one in market share for oil sales in Canada, with our medical market share close to 30%. And this success has been consistent in a recreational channel with our oils and capsules among top sellers at the Ontario Cannabis store.

Product development and innovation is a key pillar in our strategy as well. In April, we launched 3 new formats for our medical patients. Because of our connections with physicians and patients, we were made aware of various unmet needs in the market. In response, we are able to create 3 new dosage forms and bring them to market quickly. These innovative products include high-dose CBD capsules, high dose CBD drops as well as a low dose 1:1 CBD THC capsules, and these have quickly become some of our most popular SKUs.

We continue to be a leader in the medical cannabis market. As of December 31, we had 58,000 patients. This grew to 68,000 as of March 31, a 19% increase well above market growth rates. This really is a testament to the medical eco system that we have built. Our consistent award winning quality products as well as our award winning and caring customer service team.

Last month, we hired Dr. Len Walt, our Chief Medical Officer to lead our clinical research strategy, medical education programs, product innovation and international medical partnership strategies. Now Dr. Walt has extensive Senior leadership experience in medical affairs and building world class medical teams in the international pharmaceutical and biotechnology industries. We're thrilled to have Dr. Walk on the CannTrust team.

Now with respect to partnerships, we've signed an LOI with the province of Quebec, which means we now have agreements with all 10 provinces, representing 99% of the Canadian population. We will introduce our most popular liiv brand to the province of Quebec, and we expect that Quebec will be a very important market for our full suite of award winning products in the future. We also continue to work hard with our partner Apotex, to develop 3 new and innovative cannabis-based health care products for Canadian as well as international markets. Also, Apotex continues to help us with access to distribution in various international markets. We're also having multiple discussions with potential new relationships to help us bring confectionery, beverages and health and beauty products to market as soon as late this year.

Now as a final message from me before I pass the call over to Greg. I want to share that while I'm regularly listening to all of our stakeholders including our investor base, whether you've been a long time loyal investor or you joined the journey in the past few weeks, you need to know that the opportunity for CannTrust is immense. Recent projections estimated that by 2025, the Canadian cannabis market size will be approximately $8 billion while the global market size is projected to be $150 billion or more depending on the research report that you're reading. And I firmly believe that between the track record we've developed over the last 5 years and the competitive advantages that I outlined to you earlier, that CannTrust is going to become a formidable leader in the global cannabis market. Now based on my experience both in Canada and abroad, there's no doubt in my mind that CannTrust has the tools to make this vision a reality in the years ahead.

Now with that, I'll now turn the call over to Greg for further commentary on our financial results.

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Greg Guyatt, CannTrust Holdings Inc. - CFO [3]

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Thanks Peter. Please note that the first quarter 2019 refers to the period ending March 31, 2019 and all figures are in Canadian dollars unless otherwise stated. CannTrust is in a very strong financial position following our recent equity offering. We now have over $250 million of pro forma cash on our balance sheet before exercise of the over allotment option, which is more than enough to fund our stated growth plans and give us ample flexibility to pursue further international expansion and strategic partnerships.

We intend to deploy the capital toward the following initiatives: 1, execute on our greenhouse and outdoor cultivation capacity expansions; 2, enhance our extraction capacity; 3, become GMP-certified by the end of 2019; 4, develop innovative new product formats for the expected changes to regulations in Canada including baked products, our patented Brewbudz single served coffee and tea pods as well as confectionery, beverage and health care products; 5, fund continuous process improvements to drive continued gross margin improvements; and finally 6, continue to invest in bio-symphysis technology. We have already made substantial progress on many of these initiatives, and we are really excited about these future opportunities. Turning to the quarter, CannTrust increased revenue to $16.9 million in the first quarter of 2019, up a 115% from $7.8 million in the first quarter of 2018 and up 4% over the prior quarter as we've previously communicated. This increase is attributable to our growing medical patient base and the introduction of sales into the recreational market in Canada last year. Our results reflect a proactive decision to absorb the excise tax for our medical patients, but we expect the impact to lessen with recent regulatory changes that calculates the tax based on THC concentration as opposed to the weight of biomass used to create our products.

Gross profit before fair value changes to biological asset increased to $7.7 million from $5.7 million in the fourth quarter of 2018. Gross margin before changes to fair value of biological assets was 46%, an 11% sequential increase over the fourth quarter of 2018. The profitability improvement was driven by not only sales mix but also from gaining traction with our operating efficiency initiative, which can be seen through our cash cost per gram improving to $2.77 versus $2.94 in the previous quarter.

As we scale, we expect profitability will reflect rise in sales volume and the investments that we have made in our people and facilities. We expect that the process improvements Peter mentioned will continue to drive efficiencies particularly the automation of our excise labeler and product packaging.

Adjusted EBITDA was a loss of $3.8 million compared to a loss of $8.5 million in the prior quarter. We've continued to make deliberate and disciplined investments into our business development including marketing, investments into personnel to advance product development and our international strategy and the cost incurred in preparation for the company's listing on the New York Stock Exchange. Reiterating our outlook on profitability, we continue to expect improvement following the full contribution of the increased operational capacity of our phase II expansion. As the phase II expansion contributes to positive operating leverage, the company expects to return to profitability later this year. I'll now pass the call over to the operator to open the lines for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Graeme Kreindler of Eight Capital.

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Graeme Kreindler, Eight Capital, Research Division - Research Analyst [2]

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My first question here is respect to the increase in pricing in the quarter. I know you guys launched a couple of new products but I was just hoping to get some color on the price increases there and how we can expect that to trend moving forward.

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Greg Guyatt, CannTrust Holdings Inc. - CFO [3]

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I'm sorry, could you clarify pricing you're talking about on the wholesale side or medical side.

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Graeme Kreindler, Eight Capital, Research Division - Research Analyst [4]

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Just the overall price per gram or I guess what you're seeing in both markets in terms of price trends.

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Greg Guyatt, CannTrust Holdings Inc. - CFO [5]

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Yes. Overall, our pricing has been relatively stable over the last quarter. We did have some small price increases on the recreational side of the market, what we're seeing on the increased revenue per gram is primarily driven by product mix during the quarter.

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Graeme Kreindler, Eight Capital, Research Division - Research Analyst [6]

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Okay and then with respect to the harvest, which increased 96% from the previous quarter, but it looks like the volume actually went down slightly from Q4. How should we be thinking about conversion from harvest into actual end sales and what that could mean into Q2?

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Greg Guyatt, CannTrust Holdings Inc. - CFO [7]

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Yes, we're really pleased, first of all, of our improvement in harvest up to almost 9,500 kilograms during the quarter. I mean our general thought on how to model that out is that it takes roughly from the time of harvest until it gets sold into the market is about 60 days. So you'll see that we had a significant increase in our inventory levels during the quarter. So really we believe we're set up for success for Q2 with that production level that we've achieved.

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Graeme Kreindler, Eight Capital, Research Division - Research Analyst [8]

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And the last one here before I jump back into the queue. The sales mix in the quarter seems to have shifted a little more heavily into the medical versus the wholesale channel, just wanted to get thoughts about where you envision that going in the long term as you balance the product allocation into all the various markets.

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [9]

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Yes I think it's a fair question, Peter here. I start by saying that we've always been a leader in the medical space, and when we have to prioritize products we are tending in -- we are tending now to prioritize our medical patients. So I think you saw that a little bit in the numbers, so with some degree of limited supply that we prioritized our medical patients. I think with phase II being completed, being fully licensed, where we're very close to being at full production capacity at the 50,000 kilograms, we certainly be in a better position to meet all of the stakeholder needs. I think when you think about 12 months from now, we definitely see a shift from a revenue perspective to the wholesale or recreational market from medical, just in terms of the growth opportunity for CannTrust and certainly, the demand we've seen for our quality products and certainly the brands that we have today. But certainly, always very focused on medical.

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Operator [10]

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The next question comes from Rahul Sarugaser of Paradigm capital.

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Rahul Sarugaser, Paradigm Capital Inc., Research Division - Former Analyst of Healthcare and Biotechnology [11]

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So first, I just wanted to quickly ask about Apotex partnership you referred to, 3 new products and then focus on the international markets. so are you able to provide anymore color on those products whether they're DIN oriented or more generic oriented. And this is a big market that you'll be looking for.

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [12]

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Yes, absolutely. So we aren't at this point for sharing what those specific 3 products are. Our road map here is the initially, under the Cannabis Rules and Regulations to be more generic form factors and those types of things, but we do have a view to DIN numbers in the future. So I think it's a sort of a stage-gated approach in terms of how we view product development. We also know that Apotex has relationships in over 150 countries around the world, so we're certainly -- as we look for partners that we would like to do business with from a global perspective, they're certainly providing some value and making very important introductions for us.

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Rahul Sarugaser, Paradigm Capital Inc., Research Division - Former Analyst of Healthcare and Biotechnology [13]

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And then maybe you've referenced a couple times to prioritize an extraction. Can you provide a little more color on that new prioritization, the technology which you are sort of incorporating and kind of where you're looking at meeting the long- term as we move towards differentiated products?.

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [14]

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Yea sure, Rahul. Happy to do so. So CannTrust, as we've already mentioned, in terms of providing oil to the market place and capsules really is -- has been a leader in the last 3 years in that category. I talked to you about the market share that we have there. Roughly about 60% to 70% of our medical sales are oils and capsules, which we think is certainly really important. This is a core competency that we've built over a pretty significant period of time, which is incredibly leverage-able as the new -- as the world change to allow different product types and form factors, so that's one of the reasons why we're increasing our capacity from extraction perspective, we're also investing in outdoor growth to drive the cost of cannabinoid down for extraction purposes, specifically for these other form factors. So today, we are doing this in-house in our Bonn facility, although, a stated use of proceeds for the capital we've acquired is to continue to increase our extraction capabilities and use different technologies as well, so we're still exploring that. Today, we're primarily using CO2 extraction purposes but certainly, as we continue to grow this competency and become a leader in this sort of new form factors of cannabis-based products, we're going to continue to be doing our thoughtful research about how extraction technology is evolving.

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Rahul Sarugaser, Paradigm Capital Inc., Research Division - Former Analyst of Healthcare and Biotechnology [15]

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Great. And then one last quick question. You folks had specifically called out biosynthesis and to use the proceeds truly does differentiate CannTrust from the use of proceeds that a lot of other company's talk about. So are you able to provide any more color there in terms of the strategic direction in biosynthesis?

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [16]

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Yes, I can definitely provide a little bit more color. Just by way of context. In the right to explain that CannTrust has definitely been a leader, and been innovative as we think about where cannabinoids come from, going from our indoor capabilities to the first yield perpetual harvest greenhouse, where we demonstrated that you can get award-winning top quality cannabis at a much lower cost than indoor. We've now moved to outdoor to drive the cost of cannabinoids down. We see the synthesizing of cannabinoids in the future as a very reliable at scale way to continue to drive the cost of cannabinoids down. So we definitely see this as a reality in the not too distant future. We have one of our core competencies is that we have in-house -- we have a science and innovation team in-house, where we have many of the core competencies to evaluate these types of companies, and we've -- I'd say throughout the world, we've explored the best biosynthesis companies that exist today. We are in active dialogue with several of them, and are certainly thinking about the ones that we want to partner with and the way we'd like to partner with them. So I think that's the color I can provide today.

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Operator [17]

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(Operator Instructions) Your next question comes from Gordon Johnson from Vertical Group.

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Gordon Lee Johnson, The Vertical Trading Group, LLC, Research Division - MD & Analyst [18]

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Just a quick question on second half demand. Looking at Health Canada data showing sales down, yet if you look at inventory dry in the formal product. Dry is sitting at roughly [2] months, oil is sitting at roughly 13 months. Can you guys talk about your expectations in the second half revenue growth and as well as what's going to drive demands, kind of share the hockey stick-like numbers a lot of people are expecting from out of the [volume].

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Greg Guyatt, CannTrust Holdings Inc. - CFO [19]

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Thanks very much for your question. Obviously, the market dynamics are what they are as far as what Health Canada looks for. We can talk about what we're seeing as future revenue opportunities for us. We -- as we've said previously, we expect to be at full capacity in our greenhouse by the third quarter, that's roughly 12,500 kilograms of cannabis being produced at that time and we also have, have been building our inventory levels over the last quarter as well to support our future growth. So using the calculation of roughly 60 days from the time of harvest through to actual sale, you can kind of work out what kind of growth levels we can expect over the rest of the year. So we expect growth to continue in Q2, and then continue in Q3 and then stabilize somewhat in Q4, by continuing the growth trajectory, in advance of fully executing on our outdoor growth strategy.

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Gordon Lee Johnson, The Vertical Trading Group, LLC, Research Division - MD & Analyst [20]

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And then last question for me. Just with respect to the derivatives market. There's been concerns raised that maybe some of the recent laws in Canada make it hard for derivates market to really emerge as a real revenue driver near term. Can you talk about your expectations on the derivates market being revenue driver and when do you expect that to really emerge as an opportunity?

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [21]

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Thank you Gordon, I mean, I with that general precept that was mentioned, I would disagree with it. And I'll tell you why, right? Which is, I think the primary reasons why Canadians who aren't participating in the cannabis market is because in the past, it's been illegal. And secondly, because the most of these who consume it, it's done in a combustible way. And I think a lot of Canadians and I think a lot of the world don't want to do that. The illegality has been removed and we're about to get to a place, where you don't have to -- you don't have to combust the product, and you can enjoy cannabis for medical purposes, or for recreational purposes in different forms than in the past and I think that, that creates a gigantic opportunity for a lot of the marketplace to begin to participate in the cannabis space, when it was so limited in the past. So yes there are -- will be rules and restrictions on packaging, on product formats and a variety of those things that are will be somewhat restrictive. But I think it opens up a tremendous market in the Canadian marketplace for people to begin to get into the cannabis space from a recreational perspective. So we see it as a huge opportunity, and we've done 2 things, I think really to position ourselves well to be a winner when that change happens: The first one is we've been very thoughtful with our brands. We've created four brands with very, very specific market segmentation in mind and I think there's a subset of those brands that are speaking very, very much to this marketplace and so I think that bodes very, very, very well for us. So I think that, that's the primary thing. we've also have chosen to be a leader in vape pens, so we look to the experience in the U.S. and we've seen that, that's been a significant driver of the cannabis market in the states that it is legal in the U.S. and so we've purchased hardware, we've already started to stockpile distillates and expect to have vape pens on the market as soon as we're permitted to do so. We also have a proprietary product in our Brewbudz, which is a product that we have patents on. That would be really an innovative form factor for the Canadian marketplace. So I think we see that as a huge opportunity and are leveraging ourselves nicely to take advantage of it.

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Operator [22]

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Next question comes from Jesse Pytlak of Cormark Securities.

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Jesse Pytlak, Cormark Securities Inc., Research Division - Analyst of Institutional Equity Research [23]

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Just a quick question on the medical side. Obviously you guys are continuing to add patients here even post the opening of the adult-use market, but just wondering if you've noticed any trend in terms of medical purchasing patterns here with respect to basket price repurchase rates and anything like that you can maybe elaborate on.

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [24]

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Yes, certainly I mean now we've already mentioned that, we've seen an acceleration in our patient base, since the legalization of recreational cannabis. One of the reasons that I like to explain why that is, is because although medical cannabis has been legal in Canada for 5 years, certainly the communities that I've been a part of and the listening that we've done I think mostly Canadians realize cannabis became legal only 6 months ago, which has opened many, many people's eyes to cannabis on the medical side. Our network of over 2,400 physicians are calling us on a regular basis asking -- telling us that they're having multiple patients come to them every day, asking them about medical cannabis and certainly they're reaching out to our patient -- sorry, our education group and our physicians to continue to educate themselves. So we see that trend continuing. In terms of basket size we haven't seen any material change in terms of basket size; it seems very healthy. It'll be interesting to see, now that we have added some additional form factors and some new medical products over time, how that changes basket size but we've seen only positive trends from our medical business and only positive in terms of basket size. So we'll have to continue to monitor but so far very encouraging.

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Operator [25]

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Next question comes from Doug Miehm of RBC Capital Markets.

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Douglas Miehm, RBC Capital Markets, LLC, Research Division - Analyst [26]

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A quick question, just as it relates to extraction, I know that you're tripling your capacity but as you do bring on your outdoor growth and we think about 2020, are you going to have enough extraction capability to meet what you're going to be harvesting over the next 12 to 18 months?

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [27]

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Well, the answer is yes. One of our stated use of proceeds in the capital raise that we did it is to further invest in our extraction capability. The tripling that we mentioned earlier has already occurred in our Bonn facility. In order to support our outdoor growth and the extraction that needs to happen, that's going to be done locally in the British Columbia market. So we're working on that as we speak but yes, the answer is we will have the extraction capability we need to meet to handle all the yield from our British Columbia outdoor growth.

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Douglas Miehm, RBC Capital Markets, LLC, Research Division - Analyst [28]

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And second question, just has to do with it. As you bring on the outdoor growth, the margin profile of the company is likely going to change. What could you think is the target gross margin profile for the company as you look into the latter part of 2020?

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Greg Guyatt, CannTrust Holdings Inc. - CFO [29]

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We do continue to see margin improvement coming. I mean, if you think about the impact of outdoor growth in particular, today, our cost to harvest is between $0.70 and $0.75 to the point of harvest, whereas for outdoor we estimate that the cost is going to be roughly $0.15. So just by virtue of that cost improvement we are going to see margin improvement going forward, mostly starting in early 2020 as we start to sell through the product that we create through the extraction, and if you think about what that $0.70 represents in terms of overall cost savings our total cash cost per gram today is around $2.77, so $2.77 includes the $0.75. You can kind of come up with an estimate as to where gross margins may be next year but certainly, we're going to continue to invest and continue to drive those margins up.

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Operator [30]

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Our next question comes from Graeme Kreindler of Eight Capital.

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Graeme Kreindler, Eight Capital, Research Division - Research Analyst [31]

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I just want to touch on briefly the comments on the return to profitability and with respect to how that's going to look like. Greg you touched on what the growth looks on the top line earlier in the call but maybe you can give some more color with respect to the gross margin across 2019 as well as the expense level.

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Greg Guyatt, CannTrust Holdings Inc. - CFO [32]

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Sure, so first of all, we are very focused on having a clear path to profitability. For us, it's critical that we're able to demonstrate profitability in the short term. So we are aiming as I said to be EBITDA positive again by the end of this year, and certainly, moving on into next year as well as we drive margin improvements. You may have heard comments on the last question as to where we think margins are going so I won't elaborate further on that particular piece. But as far as operating expenses, we're going to continue to invest in the business, invest in sales and marketing, invest in product development but I think it's safe to assume that our operating cost investment is going to grow but at a slower rate than the way sales are going to grow over the next 12 to 18 months.

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Operator [33]

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There are no further questions at this time. Please proceed.

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Peter Ralph Aceto, CannTrust Holdings Inc. - CEO [34]

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Yes. Well, listen. Thank you, everybody, for participating in the call and for your thoughtful questions, and thank you, as well to the operator have a great day and goodbye.

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Operator [35]

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Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.