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$TGODF Displays Scale as it Reports Q2 2018 Results

  • Scaling up to become the largest organic cannabis brand in the world
  • Grow facilities in Canada, Denmark and Jamaica to produce 195,000 kg of cannabis annually
  • Announced $25.8 million acquisition of HemPoland adds gateway to huge European market
  • Ecommerce giant Shopify to build online sales platform

With the release of its Q2 2018 results, a sterling performance by The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) is on display (http://nnw.fm/YOj9O). The string of achievements announced in the report shows that the company, a producer of organic, pesticide-free medical cannabis, is well on its way to realizing management’s vision of becoming the largest organic cannabis brand in the world. By the end of 2019, TGOD expects to have all of its production facilities up and running. Together, they will have the capacity to churn out 195,000 kilograms of cannabis annually.

Presently, the company is on track to achieve its ambitious goals, with four cultivation units under its aegis. The largest is the facility under construction at Valleyfield, Quebec. Work at the 72.4-acre property began soon after initial construction permits were granted in December 2017. The planned 820,000 square feet high-technology hybrid facility will have an output capacity of 142,000 kg of high-quality organic cannabis. Since it is eligible for Hydro Quebec’s economic development rate, which will lower its power cost, this facility will put TGOD in a good position to be a low cost producer. The plant is expected to be ready in the first half of 2019.

TGOD’s European operations won’t be quite as big as the Valleyfield complex, but, with a planned annual output capacity of 25,000 kg, the endeavor, focused on oil extraction, won’t be anything to sneeze at. Consisting of two facilities situated in 1.3 million sq. ft. of state-of-the-art automated greenhouses, the enterprise, currently the subject of a Letter of Intent (LOI), will be a 50/50 joint venture with Knud Jepsen, based in Hinnerup, Denmark. The expected completion date is in the second half of 2019.

However, in a recently announced acquisition that dramatically accelerates its strategic entry into Europe’s lucrative organic cannabis market, TGOD entered into a definitive agreement to acquire HemPoland, a European manufacturer and marketer of premium organic CBD oils (http://nnw.fm/5PKCg). The $25.8 million deal, which includes an immediate accretive cash and share transaction in addition to an infusion of funding for research and development, gives the cannabis-focused research and development company an enviable foothold in Europe’s multibillion dollar cannabis market, as noted by Brian Athaide, CEO of TGOD. In a news release, he stated “Gaining market share with CBD products now, in the EU, with over 700 locations, allows TGOD to establish immediate brand awareness across all verticals including infused beverages. This is an accretive acquisition and gateway to Europe’s 750 million people accelerating our plan of becoming the world’s largest organic cannabis brand.”

TGOD has already established a footprint in Jamaica. The company signed a binding agreement to acquire 49.18 percent of Epican Medicinals, a vertically integrated Jamaican cannabis company with cultivation, extraction, manufacturing and retail licenses. Epican is something of a pioneer. It was the first to be granted a cultivation license in Jamaica. Its grow facility currently has a capacity of 1,300 kg, which will be expanded to 14,000 kg by the end of 2018. Epican plans to launch a total of five dispensaries in Jamaica. The first had a successful opening in Kingston, Jamaica, on Saturday, July 14 (http://nnw.fm/g1eQP). This partnership with Epican provides TGOD with a low-cost platform to export premium Jamaican-grown cannabis to select international jurisdictions.

At its Hamilton facility, the target output capacity is also 14,000 kg. Construction is proceeding in phases. Phase 1, meant to be used as a test before scaling up, is an indoor facility covering 7,000 sq. ft., and producing 1,000 kg of cannabis. Phase 2 will add 20,000 sq. ft. in an indoor facility with a production capacity of 2,000 kg; it will focus on specialty grows and formulations. Phase 3 is a planned hybrid facility that will cover 123,000 sq. ft. and have an annual output capacity of 11,000 kg. At completion, scheduled for the first half of 2019, the Hamilton complex will extend over 150,000 sq. ft. and produce 14,000 kg of high quality organic cannabis annually.

All four facilities – Denmark, Hamilton, Jamaica and Valleyfield – are fully funded, and, on their completion, total TGOD facilities will cover 1,607,245 sq. ft. and produce 195,000 kg per annum.

To complement its brick-and-mortar operations, TGOD has engaged Shopify Inc. (NYSE: SHOP) (TSX: SHOP) to build an innovative ecommerce platform to promote and deliver medical and adult-use organic cannabis worldwide (http://nnw.fm/9RamL). Presently, Shopify is the leading cloud-based multichannel ecommerce platform. The company was involved in the partnership between TGOD and Epican in Jamaica, where it supplied the retail point-of-sale system for Epican’s retail outlets. Shopify is also developing the pre-registration system for medical patients throughout Jamaica.

For more information, visit the company’s website at www.TGOD.ca

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Wednesday, September 5th, 2018 Uncategorized
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