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CALGARY, Alberta, Aug. 26, 2021 (GLOBE NEWSWIRE) — 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.
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
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.
Source: Sugarbud Craft Growers Corp.