Kelowna, BC, April 24, 2019 (GLOBE NEWSWIRE) -- GTEC Holdings Ltd. (GTEC.V) (GGTTF) (1BUP.F) (“GTEC” or the “Company”) is pleased to announce that it has been receiving significant demand for its premium cannabis, and provides insight into its current sales initiatives and projections.
Summary of sales:
- $5.86 average selling price of flower shipped in bulk to wholesale buyers
- Products are re-packaged by certain buyers and sold under GTEC’s flagship medical brand, GreenTec™
- $1.11 per gram current estimated cash cost of production (for B2B wholesale - excluding depreciation and amortization)
- 81% estimated gross margin on products sold (excluding depreciation and amortization)
- Secured agreements with confident forward sales outlook for all 2019 production output
- Estimating to produce and sell approximately 2.5 million grams of flower in 2019
- Estimating $12.5 million in 2019 sales
- Estimating to produce and sell 14 million grams of flower in 2020
- GreenTec™ continues to be the #1 selling product on CannMart, year to date
- Unprecedented strain-specific THC content up to 24.3% on its indoor flower (for Cold Creek Kush)
- Currently producing premium quality indoor flower, with ultra-premium flower to commence harvesting in Q3 2019
- In supply negotiations with several of the “Top 5” Canadian publicly traded LP’s
"We set out a mandate and vision to our shareholders, that we are extremely confident targeting the premium segment of the market and that we possess the operational expertise to execute this vision," said Norton Singhavon, Founder, Chairman and CEO of GTEC. "Within a very short timeframe, we have demonstrated our ability to produce, market and distribute a premium cannabis product with a robust sightline into future sales. We look forward to our other facilities and future genetics coming online in the near future."
With its Alberta Craft Cannabis (“ACC”) subsidiary in full production mode, GTEC has multiple B2B sales arrangements for its indoor grown premium quality cannabis. The Company has experienced significant demand for its cannabis flower products, which has led to favourable selling prices and gross margins.
According to CannMart, the Company’s flagship medical brand GreenTec™, had previously become #1 selling product on medical cannabis marketplace www.cannmart.com, and year to date, it continues to be. CannMart is an online medical e-commerce marketplace, wholly owned subsidiary of Namaste Technologies; (TSX-V:N) (M5BQ.F) (NXTTF). GTEC has established a similar selling arrangement with CannaFarms (a wholly owned subsidiary of Vivo Cannabis) (VIVO.V) (VVCIF) and Pure Global Cannabis (PURE.V) (PRCNF) (1QS.F). The Company has also been in negotiations with several of the “Top 5” largest (by market capitalization) Canadian publicly listed cannabis companies on finalizing further supply agreements to increase exposure into various medical and recreational platforms.
GTEC has achieved an average weighted selling price of $5.86 per gram for all the bulk cannabis products it has sold since November 2018. The Company estimates that its cash production costs at ACC are approximately $1.11 per gram (excluding depreciation and amortization). Therefore, GTEC’s current wholesale cannabis transactions are providing attractive margins to the Company. Based on the Company’s research into other Licensed Producers, it believes that it has set an unprecedented record for THC percentages on its Cold Creek Kush cultivar of 24.3% for flower.
Subject to Tumbleweed and Grey Bruce receiving the necessary regulatory approvals to commence cultivation during this calendar quarter (in which the Company remains confident of this timeline), the Company estimates producing 2.5 million grams of its premium indoor flower (not including trim) over the course of 2019. Based on the Company’s current average whole selling price of $5.86, and accounting for year-end inventory not ready for sale, GTEC expects to generate over $12.5 million in gross sales for 2019.
With the proceeds of the recently announced $12.5 million financing, the Company anticipates that by Q4 2019, it will be in full production of 14 million grams of premium indoor flower and achieve a full year of production for 2020, in which it is fully funded to execute on.
The Company anticipates that its existing sales relationships, and the planned launch of its own recreational brands, will fully utilize its current and projected cannabis production for the remainder of 2019, including its line of ultra-premium indoor flower which will commence harvesting in Q3.
GTEC Share Issuance – F-20
The Company would like to announce that as of March 18, 2019, 3PL Ventures Inc. (“3PL”), its joint venture company established together with F-20 Developments Corp. (“F-20”), received an aggregate of $5,614,138.12 by way of shareholder loan from F-20. The funds will be used to complete the retrofit of a premium indoor cultivation facility in Vernon, BC (the “Production Facility”). To date, 3PL has expended approximately $5,020,871 in connection with the construction and retrofit of the Production Facility.
As previously announced on October 25, 2018, GTEC agreed to issue $1,250,000 worth of common shares in the capital of GTEC (the “Common Shares”) to F-20 upon F-20 funding 3PL by way of a shareholder loan of at least $5,000,000 and 3PL having expended at least $5,000,000 in respect of the construction of the Production Facility. Accordingly, the Company announces that it has issued 1,953,125 Common Shares to F-20 at a deemed value of $0.64 per share in satisfaction of the $1,250,000 shares for services payment.
GTEC Share Issuance – Tumbleweed
The Company further announces that it has issued $250,000 of Common Shares at a deemed value of $0.68 per share to Norton Singhavon, Chairman and CEO of the Company and Michael Blady, Vice President of the Company in connection with Tumbleweed Farms Corp. completing construction of a Health Canada approved cannabis production facility (the “Tumbleweed Facility”), as previously announced on April 4, 2019. Completion of the Tumbleweed Facility resulted in the satisfaction of a milestone pursuant to the share purchase agreement dated November 22, 2017. Accordingly, the Company issued 257,353 Common Shares to Mr. Singhavon and 110,294 Common Shares to Mr. Blady.
The Common Shares are subject to a statutory hold period of four months and one day from the date of issuance thereof.
GTEC Holdings is a specialized cannabis company dedicated to cultivating ultra-premium quality cannabis in purpose-built indoor facilities. The company is vertically integrated across all major sectors of the Canadian cannabis industry and is currently licensed by Health Canada for Standard Cultivation, Standard Processing and Analytical testing. The management team is comprised of a diverse skill set sourced from leading global food & beverage and premium alcohol companies. GTEC has completed three cultivation facilities and is currently cultivating and selling cannabis.
The Company has two additional facilities coming on stream in the latter half of 2019, which will increase annual capacity from 4,000 kg to 14,000 kg. GTEC’s retail division is pursuing licensing for over 35 recreational cannabis stores across Western Canada. GTEC’s ultra-premium indoor flower will be marketed and sold under its flagship trademarked brands; BLK MKT™, Tenzo™, GreenTec™, Cognōscente™, Treehugger™, and FN™.
GTEC is actively pursuing sales and distribution opportunities across all major business channels: medical, recreational, B2B and export. GTEC is a publicly traded corporation, listed on the TSX Venture Exchange, OTCQB Venture Market and Frankfurt Stock Exchange. The Company is headquartered in Kelowna, British Columbia.
To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co
On behalf of the board,
Founder, Chairman & CEO
Co-Founder & Vice President
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.
The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals, where applicable and the state of the capital markets. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
For additional information please contact:
GTEC Holdings Ltd.