GTEC Provides Updates on Production and Sales
Kelowna, BC, Feb. 12, 2020 (GLOBE NEWSWIRE) — GTEC Holdings Ltd. (TSX-V:GTEC) (OTCQB:GGTTF) (FRA:1BUP) (“GTEC” or the “Company”), a multi-licence producer of premium indoor cultivated cannabis, is pleased to present the following updates on production and sales:Produced 434 kilograms (“KG”) of cannabisSold 280 KG of cannabis, with estimated weighted average selling prices of:256 KG of business-to-business (“B2B”) sales at $5.25 per gram for flower and $2.50 per gram for secondary products (trim and popcorn)24 KG of recreational cannabis sales at $9.25 per gramAn estimated cash cost between $2.15 – $2.20 per gram. The increased cash cost was due to labour and packaging relating to recreational salesThe final week of Q4 saw an initial recreational product launch of 24 KG, primarily produced at Grey Bruce FarmsThe Company will report its fiscal 2019 audited results on Tuesday March 17, 2020In Q4, the Company commenced a transition from selling its cannabis produced from commercial cultivars on a B2B wholesale basis, to selling cannabis produced from its unique cultivars in a consumer packaged good (“CPG”) format via Provincial supply chains. As a result of logistical factors, certain shipments into Provincial sales channels, which were originally anticipated to ship in Q4 2019 occurred early in Q1 2020.Three licensed cultivation facilities, totaling approximately 39,000 square feet, are now operating at full capacity, with Q2 harvests expected to drive increased revenue growth in Q2 and Q3,2020On an ongoing basis, the Company has been selling all cannabis that has been produced; which demonstrates significant demand for GTEC products. The Company also has not experienced any material issues with production, product recalls, quality control, crop loss, or stale dated productsBLK MKT products receiving positive reviews on Lift & CoThe majority of the Company’s harvests are testing above 20% THC, with several harvests testing in the 26-29% range, resulting in certain GTEC products achieving some of the highest THC content in the sectorDue to demand levels for BLK MKT branded products, the BCLDB has implemented an order limit on wholesale purchases by retail storesBLK MKT products rank amongst the highest pricing tiers (on per gram basis) in all retail channelsThe Company is increasing average selling prices and gross margins by transitioning from bulk B2B cannabis sales to CPG cannabis sales (via Provincial sales channels)Completed the successful transition from commercial cultivars to unique premium cultivars, with the final harvests of the commercial cultivars scheduled for February 2020, which allows the Company to enter Q2 solely producing unique premium cultivars, which is projected to increase the Company’s average selling price and gross marginsLaunched single gram SKUs for BLK MKT cultivars in B.C. and Saskatchewan, with an increased selling price per gram than its 3.5 gram SKUsLaunched Tenzo (Purple Punch 2.0) in B.C. and SaskatchewanCommenced the extraction of secondary products (trim and popcorn) into distillate oil, which has been sold to its wholesale partnersCommenced small-scale test harvests of new cultivars which are highly sought-after in other mature markets, to determine viability for commercial CPG productionRecently approved as a Licensed Supplier in the Province of Manitoba“While the overall sector is facing rising inventory, declining selling prices and disappointing consumer reviews, GTEC’s focused business model of high-quality product, expanding distribution channels, and high selling prices are positioning the Company well,” said Norton Singhavon, Founder and CEO of GTEC. “We’re confident that our singular focus on cultivating, selling and marketing premium cannabis products will give us the leading edge in the industry.”Construction at the 3PL joint venture is currently on schedule to complete during the fiscal 2020 year. The JV has the necessary financial resources to complete its build out, pursue licencing and to fund the operating capital. In aggregate, the JV facility is expected to have the capacity to be able to produce up to 6,000 KG of indoor flower annuallyExecuted a term sheet to divest its last remaining retail asset (located in Vancouver, BC). The transaction remains subject to closing; which is anticipated no later than March 31, 2020Hired a Director of Security & Regulatory Affairs, who will play a key-role in maintaining regulatory compliance as the Company’s increases its production footprintAs part of the Company’s mandate to focus on the cultivation of premium indoor flower, it has listed its Spectre Labs warehouse for sale at $1.2 million. The Company has been presented offers and is currently in negotiations with multiple prospective buyers, with the expectation of a completed sale in Q2 2020
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