Aleafia Posts Record Revenue in Q3 2018, 36% Increase Over Previous Quarter
November 26 2018 - 6:00AM
First Quarter of Profitability for Clinic
and Cannabis Product Divisions 99% of 98,000
kg Annual Cannabis Production Capacity to Come Online in
2019
Aleafia Health Inc. (TSXV: ALEF; OTCQX: ALEAF, FRA: ARAH)
(“Aleafia“) or (the “Company“), today announced the company’s 2018
Q3 fiscal results.
Q3 Business Highlights:
- Recorded the first cannabis revenue in the company’s history,
days after securing its Health Canada Sales Licence.
- Retrofitting of 160,000 Sq. Ft. Niagara Greenhouse is underway.
The facility will feature a modern, automated, moving container
bench system that will significantly decrease operating expenses
and allow higher yields, with a perpetual, year-round harvest. The
facility is expected to be fully operational in late 2018, with a
first harvest in spring 2019.
- Signed supply agreement with CannTrust, with Aleafia providing
up to 15,000 kg of dried cannabis flower in 2019.
- Announced adult-use cannabis division with Serruya Private
Equity (“Serruya”). Aleafia and Serruya will launch a national
adult-use retail network and together hold international licence
agreements for commercially proven brands. Aleafia will produce,
label and list these brands in the retail network and with
provincial distributors. Serruya is also making a $10 million
strategic investment in Aleafia. The closing of the transactions
occurred following the reporting period.
Business Highlights Following the Reporting
Period:
- Secured local approval for 60,000 kg, secure outdoor cannabis
cultivation site at Aleafia’s Health Canada-Licensed Port Perry
facility. Ground-breaking is expected in Spring 2019, with a first
harvest in summer 2019.
- Launched global expansion with 10 per cent proposed equity
stake in Australian medical cannabis company CannaPacific Pty Ltd.
(“CannaPacific”).
- Announced first phase of unique proprietary cannabis education
platform via partnership with D2L (Desire2Learn) Corporation
("D2L"). D2L will produce a series of cannabis
courses on Aleafia’s behalf including Cannabis 101 and Cannabis in
the Workplace. The product will be launched by early 2019.
Q3 Financial Highlights:
- Total revenue for the three and nine months ending September
30, 2018 was $1.6 million and $3 million, respectively. Q3 2018
revenue was up 36 per cent over Q2 2018.
- Gross profit for the three and nine months ending September 30,
2018 was $2.2 million and $3.1 million, respectively.
- For the Health & Wellness division, Q3 2018 revenue and
operating income before non-cash items was $1.06 million and
$206,458, respectively.
- For the Farms & Products division, Q3 2018 revenue and
operating income before non-cash items was $529,146 and $217,358,
respectively. This included the sale of the company’s first
harvest.
- As of September 30, 2018, the Company had $22.8 million in cash
on hand.
“As the company has achieved a number of important
milestones, we are extremely encouraged by our third quarter
results. It has been a transformative period for Aleafia. Our first
cannabis sale marks the beginning of our cultivation expansion with
Aleafia producing 98,000 kg of dried flower on an annual run rate
basis,” said Aleafia Chairman Julian Fantino. “We look forward to
soon supplying our growing base of over 50,000 patients with
Aleafia-produced medical cannabis.”
“Management has been relentlessly focused on
executing our business strategy and we are now seeing the fruits of
this labour. Our retail, supply and international brands agreements
with Serruya Private Equity will position Aleafia to assume a
leadership role in adult-use cannabis and generate significant
revenue through all stages of the cannabis value chain,” said CEO
Geoffrey Benic. “With 99 per cent of our 98,000 kg of annual
cannabis production capacity to come online in 2019 and our major
expansion into the adult-use market, we look forward to this
exponential growth in the next 12 months.”
For Investor & Media Relations, please
contact:
Nicholas Bergamini, VP, Public Affairs
IR@AleafiaInc.com
About Aleafia Health Inc.:
Aleafia is a vertically integrated, national
cannabis company with major medical clinic, cannabis cultivation
and R&D operations. The company is a federally licensed
producer and vendor of cannabis and will reach an annual production
capacity of 98,000 kg of dried cannabis in 2019.
Aleafia operates 22 medical cannabis clinics
staffed by physicians and nurse practitioners, with over 50,000
patients. The company is highly differentiated, maintaining the
largest medical cannabis dataset in the world with significant
intellectual property holdings and current R&D operations.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the Exchange) accepts responsibility for the adequacy
or accuracy of this release.
FORWARD LOOKING INFORMATION
This press release contains forward-looking
statements and information that are based on the beliefs of
management and reflect the Company's current expectations. When
used in this press release, the words "estimate", "project",
"belief", "anticipate", "intend", "expect", "plan", "predict",
"may" or "should" and the negative of these words or such
variations thereon or comparable terminology are intended to
identify forward-looking statements and information. The
forward-looking statements and information in this press release
includes information relating to the implementation of Aleafia
Health's business plan. Such statements and information reflect the
current view of the Company with respect to risks and uncertainties
that may cause actual results to differ materially from those
contemplated in those forward-looking statements and
information.
By their nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause our actual results, performance or achievements, or other
future events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
following risks: risks associated with the implementation of
Aleafia Health's business plan and matters relating thereto, risks
associated with the cannabis industry, competition, regulatory
change, the need for additional financing, reliance on key
personnel, the potential for conflicts of interest among certain
officers or directors, and the volatility of the Company's common
share price and volume. Forward-looking statements are made based
on management's beliefs, estimates and opinions on the date that
statements are made and the Company undertakes no obligation to
update forward-looking statements if these beliefs, estimates and
opinions or other circumstances should change. Investors are
cautioned against attributing undue certainty to forward-looking
statements.
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