SugarBud Completes the Construction of Its State-Of-The-Art Vertical Cultivation Facility and Provides Update on Its Retail Strategy
TSX-Venture Exchange: SUGR, SUGR.WT
CALGARY, Alberta, Jan. 28, 2019 (GLOBE NEWSWIRE) — SugarBud Craft Growers Corp. (“SugarBud” or the “Company”) is pleased to provide an update regarding the completion of its 29,800 square foot (“Phase 1”) vertical cannabis cultivation facility at Stavely, Alberta (the “Facility”) and its retail strategy.
Status of the Facility
SugarBud has completed the construction of the Facility’s exterior and inner walls, including the installation of key electrical, plumbing and mechanical equipment (the “Base Building”), and occupancy of the Facility is expected in February, 2019.
The Base Building was completed at a cost of approximately $7.8 million, representing $0.5 million more than the budgeted amount. The additional expenditures were primarily attributable to design changes to allow for future expansion capability, including Phase 2 of the Facility. See Figures 1, 2, 3 and 4 for pictures of the Facility.
The Company anticipates that it will receive a cultivation license from Health Canada by the end of Q1, 2019. Upon the receipt of a cultivation license, SugarBud will commence cultivation in its first two partially equipped grow rooms. The Company will then begin to equip the remaining six flowering rooms, capital permitting, until the entire Facility is in full production. SugarBud plans to have Phase 1 in full production by the end of 2019.
Phase 1 of the Facility is comprised of 29,800 total square feet of floorplate, including eight ~2,150 square foot cannabis flowering rooms totaling ~17,500 square feet of floorplate. The ceilings of the flowering rooms are 28’ tall, allowing for up to four layers of flowering canopy in each grow room.
SugarBud estimates that under a full development scenario with four layers of flowering canopy, Phase 1 of the Facility will have up to 37,000 square feet of flowering canopy. At a metric of 50 grams per square foot of flowering canopy per crop, and five crops per year, this equates to up to an estimated 9,500,000 grams of dried cannabis flower production per year.
SugarBud’s vertical grow method with four layers of flowering canopy is anticipated to result in a 211% flowering canopy to flowering floor plate ratio. This high utilization of square footage maximizes revenue per square foot of floor plate and minimizes capital costs per square foot of flowering canopy. For reference, if SugarBud were to utilize a single layer of flowering canopy, it’s flowering canopy to flowering floor plate ratio would reduce to 53%.
Phase 2 of the Facility is estimated to be comprised of 12 additional flowering rooms totaling approximately 26,000 square feet of floorplate, up to 55,500 square feet of flowering canopy, and up to an estimated 14,000,000 grams of dried flower production per year (at the same 50 grams per square foot of flowering canopy per crop, and five crops per year). See below for a summary of these figures.
|Phase (#)||Layers of Flowering Canopy (#)||Flowering Canopy (Square Feet)||Estimated Annual Dried Cannabis Flower Production (Grams)|
Health Canada Attestation Video
SugarBud has engaged a professional film crew to shoot an attestation video for Health Canada (the “Video”) on February 7 and 8, 2019. The Video is one of the final steps to be taken prior to the receipt of the Company’s cultivation license from Health Canada. The Video will outline the readiness of the Facility for the cultivation of cannabis and the integrity of the Facility’s security protocols.
See below for a summary of the estimated timeline for the completion of Phase 1:
- Base Building: Completed.
- Health Canada Attestation Video: February 7 and 8, 2019.
- Building Occupancy: February 28, 2019.
- Flowering Rooms 1 and 2 (Partial): March 15, 2019.
- Cultivation License: Expected Q1, 2019.
- Flowering Rooms 3 – 8: December 31, 2019.
This timeline is subject to change and is based on current internal estimates.
Power and Water
The Company believes that it can access all of the required power for Phase 1 and Phase 2 of the Facility under favorable commercial terms. The Facility is currently operating on generated power with redundancy. SugarBud is performing a comprehensive power study regarding its long-term power needs for Phase 2, which are anticipated to be satisfied with natural gas co-generation, power provided by the grid, or a combination thereof. The objectives of the Company are to employ the most cost effective and reliable power strategy available.
SugarBud has water supply from the town of Stavely in quantities satisfactory for Phase 1 and Phase 2. All water used in growing operations will be processed through an industrial scale reverse osmosis system prior to being used, ensuring that there are no contaminants.
SugarBud’s initial retail strategy of identifying and high-grading potential retail locations is intact and the company is monitoring the AGLC moratorium implemented in December 2018.
SugarBud has identified numerous potential retail locations and intends to enter into non-binding leases conditional upon the ability to achieve applicable licensing for the distribution of cannabis. SugarBud is also evaluating potential joint ventures and acquisitions with respect to existing and potential locations.
SugarBud is a Calgary based emerging cannabis company engaged in the development, acquisition, production and distribution of cannabis in Canada.
For further information regarding this news release, please contact:
President & Chief Executive Officer
SugarBud Craft Growers Corp.
Phone: (403) 875-5665
Chief Financial Officer
SugarBud Craft Growers Corp.
Phone: (403) 796-3640
|Investor Relations Contact
Gary Perkins, President
Tekkfund Capital Corp.
Tel: (416) 882-0020
Address: Suite 620, 634 – 6th Avenue S.W., Calgary, Alberta T2P 0S4
Forward Looking and Cautionary Statements
This news release may include forward-looking statements including opinions, assumptions, estimates, the Company’s assessment of future plans and operations, and, more particularly, statements concerning: the Facility; the completion of the Base Building and the cost thereof; the completion of Phase 1; equipping the flowering rooms of the Facility; development plans for Phase 2; the receipt of a cannabis cultivation license from Health Canada and the timing thereof; future cannabis production in the Facility and the timing thereof; the quality and yield of cannabis to be grown in the Facility, including pursuant to vertical growing technology; and sources of power for the Facility. 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 the Company which include, but are not limited to, the timely receipt of all required regulatory and third-party approvals. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company 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: regulatory and third party approvals, including receipt of cultivation and sales licenses from Health Canada, not being obtained in the manner or timing anticipated; the ability to implement corporate strategies; the state of domestic capital markets; the ability to obtain financing; changes in general market conditions; industry conditions and events; the size of the medical marijuana market and the recreational marijuana market; government regulations, including future legislative and regulatory developments involving medical and recreational marijuana; construction delays; competition from other industry participants; and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Please refer to the Company’s annual information form (“AIF”) for the year ended December 31, 2017 and management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2018 for additional risk factors relating to the Company. The AIF and MD&A can be accessed under the Company’s profile on www.sedar.com.
Except as required by applicable laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.
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.