- Full-scale
cannabis legalization in Canada in October led to a rush of consumer
interest and a resultant shortage of supply as the new industry adapts
- The
Green Organic Dutchman is improving on its initial commercial crop by
building facilities with 195,000 kilograms of annual production capacity
- The
company’s reach includes cultivation facilities in Canada and Jamaica,
with additional hemp production in Poland
- Vast
distribution capabilities spread wide across Canada, Jamaica, Mexico and
Europe
Soaring demand for legal cannabis products has strengthened
the long-term outlook for cannabis cultivator The Green Organic Dutchman
Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF), which is expanding its production
capability as well as its international footprint in a bid to stay abreast of
the market’s sweeping tide.
Canada’s nationwide legalization of cannabis in October
opened the doors to a huge buying spree by consumers, even as its newly
regulated industry struggled to cross the bar into the unknown expanse of
legitimate high-quality marijuana production while the black market outlets
that the legal industry threatened to extinguish continued to snap up customers
unwilling to wait for the new market’s wheels to turn (http://ibn.fm/c2IO3).
Legal cannabis retail outlets in Quebec, Manitoba, New
Brunswick, British Columbia, Alberta, Nova Scotia and Saskatchewan reported
supply shortages in late November, and Khurram Malik, CEO of diversified
cannabis company Biome Grow, predicted that supply might only be adequate to
meet demand by 2020 or later, according to the Motley Fool (http://ibn.fm/Egrnl).
At the forefront of authorized producers, The Green Organic
Dutchman dedicated its first commercial crop to a closed “Grower’s Circle”
group of patients and investors as a show of loyalty to “those who supported
TGOD and those who are most in need of medical cannabis therapy,” according to
its third-quarter operations report. At the same time, the company was working
to expand its existing 27,000 square feet of production space in Hamilton,
Ontario, into an operation that’s expected to ramp-up to nearly 200,000
kilograms of annual capacity across Ontario, Quebec and Jamaica when construction
is completed early next year, as well as scalable hemp capacity in Poland.
The company is improving efficiency measures in its existing commercial cultivation while developing five new strains for the medical and recreational markets amid the race to provide patients and other consumers with consistent, premium product.
The Motley Fool report notes the declining stock values of
many cannabis producers following Canada’s transition to legalization, adding
that investors may become increasingly unhappy if losses increase while growers
continue expanding their capacity and working on product diversification,
branding and marketing. That includes The Green Organic Dutchman, which the
report describes as a potential top-five producer once it gets running on all
cylinders with its expected 195,000 kilograms of annual production (including
40,000 kilogram-equivalents from edibles and cannabis-infused beverages as they
become legal).
The Green Organic Dutchman acknowledged in its third quarter
report that “expanding its operations, administration and marketing
infrastructure to rapidly scale its business” resulted in a loss for the three
and nine months ended September 30, but it stated that those losses were in
line with budgeted expectations.
Chief Financial Officer Sean Bovingdon noted in the third
quarter report that The Green Organic Dutchman “has secured its financial
future by raising over $450 million [and] fully funding [the company’s] current
domestic and international plans,” adding that TGOD has “no plans to return to
the market for additional capital at this time.”
Bovingdon continued, “We have de-risked the capital side of
our business and with our focus now on delivering medical and recreational
sales in Canada and internationally. We expect to drive significant value for
shareholders in 2019 and beyond.”
For more information, visit the company’s website at www.TGOD.ca
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