ACC received its updated Cultivation License from Health Canada on November 8th, 2018, permitting the sales of bulk cannabis to other Licensed Producers.
Wanting to generate quick revenue from its initial harvests in an environment of “supply shortages and high spot prices across Canada” – GTEC elected to “prioritize strategic partnerships for its initial bulk sales.”
Last week, ACC completed its first shipment of bulk cannabis to CannMart, following the supply agreement that was announced on August 27, 2018.
At the time, GTEC’s stated strategy was to diversify its sales mix by pursuing supply agreements with “a select group of partners” – while launching of trademarked products from GTEC’s portfolio of premium quality craft cannabis brands.
According to the August 27 press release, “Namaste’s e-commerce platform and technology will continue to drive innovation and have a major impact on the way in which patients can access medical cannabis online.”
“GreenTec’s ability to cultivate and market high quality craft cannabis provides an excellent fit with CannMart’s packaging and distribution capabilities,” Norton Singhavon, Chairman and CEO of GTEC.
“We’re pleased to have secured another strong supplier for Cannmart,” stated Sean Dollinger, President, and CEO of Namaste, “Thanks to GTEC’s management team for supporting Namaste in its efforts to become Canada’s leading online cannabis retailer.”
Namaste’s November, 2018 sales of $2.6 Million represented a 52% growth from the previous month.
Namaste is partnering with companies like GTEC to expand its Cannmart product offering. In the Toronto area, Namaste offers same-day delivery through Pineapple Express.
Under the terms of this agreement, CannMart purchased cannabis flower from ACC, for resale on CannMart’s on-line platform, under GTEC’s flagship medical brand, GreenTec.
The Certificate of Analysis for ACC’s product indicates a THC content which is significantly higher than the industry average published on Lift & Co. Cannabis Review for this particular cultivar.
GTEC has additional inventory and will continue to explore opportunities to maximize revenues for its shareholders, while entertaining other strategic opportunities.
The merged company will “focus on producing premium flower, cultivated in purpose-built indoor facilities complemented with superior genetics.”
The structure will have Invictus acquiring all shares of GTEC in a transaction valued at about $100 million – creating “Western Canada’s largest indoor vertically integrated cannabis company”.
Key Merger Highlights:
- 400,000 square feet of funded purpose-built indoor cultivation across BC, Alberta and Ontario;
- diverse galaxy of products and brands
- genetic portfolio of over 80 strains
- an EU-GMP certified facility can service domestic and European Union markets
- 30+ retail stores located across BC, Alberta and Saskatchewan;
- e-commerce website for Saskatchewan rec market
- two purpose-built state of the art extraction labs
- one analytical testing lab
Most significantly, the merger will create a combined senior management team with DNA from monster food & beverage, wine & spirits and tobacco companies, including Phillip Morris International, Diageo Plc and Saputo Inc.
For the six months ended July 31, 2018, Invictus generated EBITDA of $9.3 million, with $10.7 million in cash on hand.
For the nine months ended August 31, 2018, GTEC unaudited EBITDA of $7.2 million with $4.4 million cash on hand.
According to the Financial Post, “the supply of legal pot in Canada will only meet 30%-60% of demand after legalization.” Production shortfall is expected to be about 400 tonnes.
“We’re pleased to have completed this transaction with GTEC,” stated Aaron Bouganim, Director of Operations at CannMart, “We are very happy with the quality of the product.”
“We are officially revenue generating,” confirmed Norton Singhavon, Chairman & CEO of GTEC.
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