WINNIPEG, Feb. 21, 2019 /CNW/ - DELTA 9 CANNABIS INC.
(TSXV: NINE) (OTCQX: VRNDF) ("Delta 9" or the "Company") is
pleased to provide an update on its expansion plans. Highlights
include that the Company intends to increase its annual cannabis
production capacity to 60,000 kilograms per year by 2022 and the
expansion of its retail store network to four stores by the end of
the second quarter of, 2019.
"Today we are pleased to provide our long-term vision to
transform Delta 9's Winnipeg based
production facilities into one of the largest cannabis production,
processing, extraction and distribution centers in Canada" said CEO, John
Arbuthnot. "Our strategy is to grow our business through
organic growth and replicate the proven grow pod technology that
has provided our customers with consistent high-quality
cannabis."
Set forth below is a summary of the completed Phase 1 expansion
of Delta 9's Winnipeg production
facility and the anticipated Phase 2 and Phase 3 expansions.
Phase 1 – Phase 1 expansion is complete and licensed
by Health Canada
- Total production capacity is currently 154 grow pods offering
49,280 square feet of production space on two levels
- Projected total annual cannabis production capacity of 4,224
kilograms of dried cannabis
Phase 2 – 2019 expansion underway
- Total production capacity anticipated to increase by 454 grow
pods
- As of February 20, 2019, 65
additional grow pods have been installed in the facility as a part
of the Phase 2 expansion.
- Anticipated to provide an additional 145,280 square feet of
production space on two levels
- Total annual cannabis production capacity is anticipated to
increase to 16,768 kilograms
- Estimated capital costs of approximately $24,000,000, which will be funded from current
cashflow
Phase 3 – 2020-2022 expansion plans
- Systematic roll out of 15 modular warehouse buildings covering
480,000 square feet of production space on two levels
- Total production capacity is anticipated to increase by 1,500
grow pods during this period
- Total annual cannabis production capacity is anticipated to
increase to 60,000 kilograms of dried cannabis
- Construction of a 30,000 square foot in-house cannabis
extraction facility
- Anticipated capital costs of approximately $115,000,000. Delta 9 is currently reviewing its
strategic options for funding these expansion costs
The Winnipeg production
facility uses proprietary grow pod technology to produce premium
cannabis products. Delta 9 was the first company in Canada to develop and deploy stackable,
self-contained grow pod technology. The major benefit of these
self-contained units is that there is low risk of crop failure.
Each grow pod is constructed from a repurposed 320 square foot
steel shipping container and can produce approximately 32.5
kilograms of cannabis annually. Management estimates that each grow
pod can generate $320,000 in annual
revenue from the sale of cannabis produced by each grow pod.
"Delta 9 has over 70 strains of cannabis that require a
production infrastructure that can grow a wide range of cannabis at
scale simultaneously," said CEO, John
Arbuthnot. "Our goal is to continue to successfully execute
our organic expansion strategy to meet consumer demand, grow the
Company and benefit our shareholders."
The Company has selected Bird Construction Company Limited
("Bird") to oversee the design and construction of the Phase 3
expansion. Bird is a premier Canadian construction management firm
responsible for a number of large scale pre-engineered industrial
facilities in related industries, as well as other state of the art
cannabis facilities.
Retail Network update
Delta 9, through its partially-owned subsidiary, Delta 9
Lifestyle Cannabis Clinic Inc., opened its first retail cannabis
store in Winnipeg, Manitoba on
October 17, 2018
"We have now seen the benefits of our vertical integration
strategy into cannabis retail. Our control of the supply chain has
enabled us to meet overwhelming demand at our retail store," said
John Arbuthnot. "Not only have we
been able to meet demand at our retail store on a daily basis, we
have also honored our commitments for our existing supply
agreements and we will begin to make shipments outside of
Manitoba in the coming weeks."
The Company is currently building three more retail outlets in
Winnipeg, Thompson and Brandon, Manitoba, and has partnered with a
Manitoba First Nation to open a fifth store. Additionally, the
Company has prequalified for the Manitoba government's request for proposals to
build additional stores in smaller, rural communities.
About Delta 9 Cannabis Inc.
Delta 9 Cannabis is a vertically integrated cannabis company
focused on bringing the highest quality cannabis products to
market. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc.,
is a licensed producer of medical marijuana pursuant to the ACMPR
and operates an 80,000 square foot production facility
in Winnipeg, Manitoba,
Canada. Delta 9 owns and operates a chain of retail stores
under the Delta 9 Cannabis Store brand. Delta 9's shares trade on
the TSX Venture Exchange under the symbol "NINE" and on the OTC
under the symbol VRNDF. For more information, please visit
delta9.ca.
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.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the Company's future business plans and other matters.
Forward-looking statements consist of statements that are not
purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. Forward
looking statements in this news release include statements relating
to: (i) Delta 9's expansion plans for its Winnipeg production facilities and for its
network of retail stores; (ii) Delta 9's capital raising plans;
(iii) Delta 9's production of cannabis; and (iv) costs for Delta
9's expansion plans. Such statements are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements, including: (i) Delta 9's ability to raise sufficient
capital for its expansion plans; and (ii) Delta 9 obtaining all
regulatory approvals, as well as all risk factors set forth in the
annual information form of Delta 9 dated May 31,
2018 which has been filed on SEDAR. No assurance can be given
that any of the events anticipated by the forward-looking
statements will occur or, if they do occur, what benefits the
Company will obtain from them. Readers are urged to consider these
factors carefully in evaluating the forward-looking statements
contained in this news release and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in
their entirety by these cautionary statements. These
forward-looking statements are made as of the date hereof and the
Company disclaims any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
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SOURCE Delta 9 Cannabis Inc.