Sugarbud Craft Growers Corp. (TSXV: SUGR, SUGR.DB, SUGR.WR,
SUGR.WS, SUGR.WT) (OTCQB: SBUDF) (
"Sugarbud") is
pleased to announce the filing of its unaudited condensed
consolidated interim financial statements (
"Financial
Statements") for the three and six months ended June 30th,
2021 and related management's discussion and analysis
(
"MD&A"). Sugarbud's Financial Statements and
MD&A are available on SEDAR at www.sedar.com and on
Sugarbud's website here: Sugarbud Q2, 2021 Financials and MD&A
Key Operating Highlights for Q2
2021
- Volume and Net
Revenue | The Company shipped a total of 51,929 grams of
dried cannabis in Q2. Net Revenue for the period was $252,177.
- Gross Profit |
Despite continued industry-wide price compression, Sugarbud was
able to maintain a healthy gross profit margin of 23% (before fair
market value adjustments).
- Cost Control and
Operational Stability | The Company’s cash cost to grow
remains very well in hand at $1.51/g and the Company remains on
track to deliver on previously disclosed full year guidance of
$1.22/g.
- Harvest
Consistency | During the three months ended June 30, 2021,
the Company successfully completed two harvests - resulting in a
total of 212,682 grams harvested. Sugarbud's cultivation and
processing operations continue to deliver consistent yields while
simultaneously maintaining exceptional terpene content (2-5%) and
total potency (THC 19-23%).
- Expanded Product
Portfolio | The Company in collaboration with CannMart
Inc. launched its first Cannabis 2.0 product in late Q2 2021.
Sugarbud’s additive free, full spectrum oil (FSO) 510 Cartridges
are now available to registered medical patients nationwide through
CannMart.com. Sugarbud also began initial development of its first
flower rosin extract product in collaboration with Embark during
the quarter.
Q3 2021 Highlights and Outlook for
2021
- Record Volume and
Revenue | Sugarbud is on pace to ship between 150,000 –
200,000 grams of dried cannabis in Q3 generating anticipated record
revenue of between $700,000 – $1,000,000 for the quarter.
- Geographic Expansion and
Reach | Sugarbud established a clear route to market in
Canada’s second most populous province, Quebec – via a Sales,
Marketing and Distribution Agreement with ROSE LifeScience Inc.
(“ROSE”).
- Portfolio Expansion and
Consumer Uptake | Sugarbud launched two new cultivars –
Mule Fuel and Krypto Chronic #2 - into Alberta and Ontario in Q3.
Both cultivars have been very well received to date and sell
through continues to remain strong.
- Cannabis 2.0 Sales
License | The Company completed its final submission to
Health Canada for authorization permitting the direct sale of
extracts, edibles and topicals and still expects to receive
approval prior to the end of Q3 2021. The Company views this
regulatory decision as a major catalyst for future growth heading
into the back half of 2021.
- Rosin Launch
Update | Development of the Company’s first flower rosin
extract was completed during Q3 and the Company remains on track
for an early Q4 launch of this exciting new product which is
derived from the Sugarbud’s popular Krypto Chronic #2
cultivar.
With geographic reach in all major markets now
firmly established, the Company is squarely focused on continuing
to accelerate consumer adoption, retail penetration and expanding
its product portfolio within each market to drive growth.
2021 Outlook – Focusing on Customer
Satisfaction to Drive Growth
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.
"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.
"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. It takes time to connect
with each target customer," continued Mr. Kondrosky.
"Based on the feedback and uptake we are getting
from our customers, our commitment to exceptional cannabis and
total value is most definitely resonating with consumers coast to
coast. Sugarbud is rapidly establishing a strong brand identity and
reputation as a leader in the craft cannabis space and we believe
that we are well-positioned to continue to expand our market share
and accelerate revenue growth in our key markets over the back half
of 2021," concluded Mr. Kondrosky.
Critical Operating Priorities and
Catalysts for the Balance of 2021
Operationally the Company has the existing
capacity to achieve its growth objectives for the foreseeable
future and maintains an agile and scalable operating model which
has several facility build-out options that the Company can quickly
deploy as increasing market demand requires.
In order to fully realize significant growth
opportunities and continue to expand market share in the back half
of 2021, the Company will continue to leverage existing operational
capacity and expand commercial capacity for growth by:
-
Building upon Sugarbud's rapidly growing connection to its retail
partners and consumers - to increase the penetration and adoption
of its products in current target markets.
-
Expanding our product portfolio within major markets including
Alberta, British Columbia, Ontario and Quebec.
-
Leveraging the quality of our exceptional dried flower portfolio to
rapidly expand our Cannabis 2.0 product portfolio within existing
major markets.
-
Investing in targeted new product and portfolio development to
accelerate growth.
-
Continuing to build product excellence around our genetic
portfolio.
-
Continuing to maintain and adhere to strong financial discipline
and operating controls that management believes will continue to
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.
About Sugarbud
www.sugarbud.ca
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.
Sugarbud Craft Cannabis products are currently
available to adult recreational consumers in British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Yukon Territory
and nationally to registered medical patients through
CannMart.com.
We Take Pride, We Take Our Time…………. Experience
the Difference
CONTACTS:
John Kondrosky Chief Executive
Officer Sugarbud Craft Growers Corp. Phone: (604) 499-7847
E-mail: johnk@sugarbud.caInvestor
Relations ContactChris
MoulsonChief Financial OfficerSugarbud
Craft Growers Corp.Tel: (778) 388-8700E-mail:
chrism@sugarbud.ca |
Websites:
http://www.sugarbud.ca/http://craftcannabiscollection.ca
Address: Suite 620, 634 - 6th Avenue S.W.,
Calgary, Alberta T2P 0S4
Forward Looking and Cautionary Statements
This news release contains forward-looking
statements. More particularly, and without limitation, this news
release contains statements concerning: the Company's business
strategy and future operations; ability to cultivate and produce
premium cannabis products; the distribution and sale of Sugarbud's
cannabis products; future product offerings, including the
development, commercialization and sale of Cannabis 2.0 products
and the Company's Krypto Chronic #2 product; the Company's ability
to remain operating in accordance with developing public health
efforts to contain COVID-19; product quality; partnerships,
including with ROSE and CannMart; the Company's projections with
respect to operating costs, including cash cost to grow; the
Company's revenue, market share, growth and operating projections,
including estimates of product shipments; the Company's
expectations regarding regulatory approvals, including from Health
Canada, and the effects thereof on the Company's business;
management's expectations regarding the Company's business goals
and focus; the impact of the Company's business on consumer habits,
including consumers accessing the black market for cannabis
products; the ability of the Company to deploy facility build-out
options; the Company's expectations regarding expansion across
existing markets and entry into new markets; the Company's plans to
invest in new product and portfolio development; and the Company's
expectations regarding its revenues generated from sales of the
Company's product lines. When used in this document, the words
"will," "anticipate," "believe," "estimate," "expect," "intent,"
"may," "project," "should," and similar expressions are intended to
be among the statements that identify forward-looking
statements.The forward-looking statements are founded on the basis
of expectations and assumptions made by Sugarbud, including, but
not limited to: the success of the Company's business strategy,
including organic growth, partnerships and other strategic
activities; ability to manage growth in the Company's business; the
ability to maintain licenses and necessary approvals for Sugarbud
to cultivate cannabis at the Stavely facility; ability to cultivate
premium cannabis products; ability to sell cannabis products;
access to market for the Company's future cannabis products; impact
of increasing competition; ability to keep pace with changing
consumer preferences; ability to protect the Company's intellectual
property; timing and amount of capital expenditures; operating
costs; government regulations, including future legislative and
regulatory developments involving recreational and medical cannabis
and the timing thereto; changes to laws regarding the recreational
and medical use of cannabis and the impact on the Company's
business strategy; demand for cannabis products and corresponding
forecasted increase in revenues; size of the recreational and
medical cannabis markets in Canada; legislative and regulatory
environments of the jurisdictions where the Company carries on
business; ability of the Company to obtain qualified staff,
services, supplies and equipment in a timely and cost-efficient
manner; the Company's competitive advantages; and conditions in
general economic and financial markets.Forward-looking statements
are subject to a wide range of risks and uncertainties, and
although Sugarbud believes that the expectations represented by
such forward-looking statements are reasonable, there can be no
assurance that such expectations will be realized. Any number of
important factors could cause actual results to differ materially
from those in the forward-looking statements including, but not
limited to: the global public health crises in respect of the
outbreak of a novel strain of coronavirus (COVID-19) and variant
strains of the virus, including volatility and disruptions in
global supply chains and financial markets, as well as declining
trade and market sentiment and reduced mobility of people; success
of the operations of the Company; ability of the Company to execute
its business strategy; the effect consumer perception of the
medical and recreational use of cannabis will have on the market
price of cannabis products; the premium segment of the medical and
recreational cannabis markets; consumer's attraction to premium
cannabis products and changes in consumer preference; development
of the cannabis industry in ways that differ from the Company's
expectations; legislative and regulatory environments of the
jurisdictions where the Company carries on business or has
operations; ability of Sugarbud to develop or maintain a brand that
attracts or retains customers; any failure by the Company to comply
with applicable regulations could prevent it from being able to
carry on its business, and there may be additional costs associated
with any such failure; federal, provincial and municipal government
cannabis regulation and changes thereto; actions taken by
governmental authorities, including increases in taxes and changes
in government regulations; any failure by the Company or its
suppliers to comply with supplier standards established by
provincial or territorial distributors could prevent the Company
from accessing certain markets in Canada; constraints by law in the
Company's ability to market its products in Canada; development of
the Stavely facility, including construction delays; availability
of sufficient financial resources to fund the Company's capital
expenditures; stock market volatility and market valuations;
changes in general economic, market and business conditions; the
effect of any future litigation proceedings on the Company's
business; impact of competition and the competitive response to the
Company's business strategy; competition for, among other things,
licences, capital, skilled personnel and customers the risks of the
cannabis industry, such as regulatory risks and increasing
competition; timing and amount of capital and other expenditures;
the availability of capital on acceptable terms or at all;
cyber-security issues; and, in relation to the Company's
expectations regarding revenues, assumptions relating to production
and production capacity, growth in the number of product offerings
and store locations in which the Company's products are sold,
growth in total sales, consumer demand for the Company's products,
market pricing of cannabis products, cost of sales, general and
administrative expenses (including sales and marketing expenses),
the pace of opening of and increase in the total number of
recreational cannabis retail stores across Canada, and the total
size of the Canadian recreational and medical cannabis markets over
that time period. Please refer to Sugarbud's most recent annual
information form and management's discussion and analysis for
additional risk factors relating to Sugarbud, which can be accessed
under Sugarbud's profile on www.sedar.com. Except as
required by applicable Canadian securities laws, Sugarbud does not
undertake any obligation to publicly update or revise any
forward-looking statements. This news release contains
future-oriented financial information and financial outlook
information (collectively, "FOFI") about the Company's reasonably
estimated prospective results of operations, cannabis production
capacity and volumes, ASP, average net selling price per gram,
revenue, expenses, profit, EBITDA and components thereof, all of
which are subject to the same assumptions, risk factors,
limitations and qualifications as set forth in the above
paragraphs, including with respect to economic conditions and
proposed courses of action, based on management's assessment of the
relevant information available as of the date of this news release.
Sugarbud disclaims any intention or obligation to update or revise
any FOFI contained in this news release, whether as a result of new
information, future events or otherwise, unless required pursuant
to applicable law.This news release provides certain financial
measures that do not have a standardized meaning prescribed by
International Financial Reporting Standards ("IFRS"). These
non-IFRS financial measures may not be comparable to similar
measures presented by other issuers. EBITDA (meaning earnings
before interest, taxes, depreciation and amortization) is not a
recognized measure under IFRS. Management uses certain industry
benchmarks, such as EBITDA to analyze financial and operating
performance. These metrics are useful to investors and research
securities analysts in evaluating operating performance. These
benchmarks do not have any standardized meaning prescribed by IFRS
and therefore may not be comparable with the calculation of similar
measures for other entities. Please refer to the MD&A for
additional information relating to non-IFRS measures, including the
Company's calculation of EBITDA.
Neither the TSXV nor its regulation
services provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
release.
SugarBud Craft Growers (TSXV:SUGR.WR)
Historical Stock Chart
From Jun 2024 to Jul 2024
SugarBud Craft Growers (TSXV:SUGR.WR)
Historical Stock Chart
From Jul 2023 to Jul 2024