Cronos Group Provides Operational Update and Q3 Financial Results
Cronos Group Provides Operational Update and Q3 Financial Results
TORONTO, ON –November 29, 2016
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH UNITED STATES NEWSWIRE
PharmaCan Capital Corp., doing business as Cronos Group (TSXV:MJN) (“Cronos” or the “Company”) is pleased to provide the first operational update related to its portfolio of licensed producers (“LPs”) and ACMPR applicants since installing new executive management and consolidating our ownership in The Peace Naturals Project Inc. (“Peace Naturals”) on September 6, 2016. Cronos also announced its third quarter financial results and accompanying management discussion and analysis for the period ended September 30, 2016; copies of which are available on the Company’s website (www.thecronosgroup.com) and have been filed and are available on SEDAR (www.sedar.com).
“While the trailing quarterly results reflect just the first 24 days of our consolidated ownership of Peace Naturals, the new Cronos team has been working tirelessly towards optimizing our operating companies, streamlining our financial investments, re-branding our corporate profile and establishing international distribution channels. We are already realizing encouraging results from these initiatives both domestically and internationally,” says Mike Gorenstein, Chief Executive Officer of Cronos.
At Peace Naturals, select highlights from ongoing operational changes implemented by new management include:
- Renewed ACMPR production and sales license for 2,500 kg/year.
- Completed first co-branded export of medicinal cannabis to German based Pedanios GmbH.
- Completed installation of commercial-scale power infrastructure, providing sufficient power for the full 38,000 sq. ft. existing production and lab infrastructure, as well as required power for up to three additional expansion facilities (was previously significantly limited).
- Ongoing optimization of production methodologies and facility layout, which to-date, has resulted in a significant increase in flowering space and production yields.
- Peace Naturals’ estimated pro-forma production capacity within existing infrastructure has increased to ~4,200 kg/yr.
- Review and optimization of retail pricing strategies, resulting in a ~37% increase in the average sales price per gram.
- Establishment of new patient enrollment programs, which include hosting community-based support groups and direct physician outreach initiatives.
- New patient enrollment now averages ~10 per day (was previously stagnant).
- Launched proprietary genetics R&D program (Cronos’ portfolio includes over 100 unique strains).
- Commenced engineering and design of onsite Good Manufacturing Practice (“GMP”)-grade lab for product formulation, derivatives and extracts processing, and analytical testing.
- Commenced engineering and design of incremental production expansion on 90+ acre property.
At In the Zone Produce (“ITZ”), select highlights and updates include:
- Acquisition of adjacent 17 acres, resulting in total ITZ operating footprint of ~31 acres.
- Successfully harvested and tested multiple production batches at the newly renovated facility.
- Completion of Health Canada inspection for the purposes of obtaining a sales license (inspection completed September 29; results pending).
- Ongoing engineering and design work for onsite ITZ expansion facilities.
“We are very pleased with the success of our ongoing improvements to our domestic cannabis portfolio. Cronos is also excited about the establishment of our international distribution channels. We will continue to rapidly expand our production capacity and strengthen our brands both domestically and in additional international jurisdictions. This is just the beginning.” says Gorenstein.
As previously mentioned, the Company recently completed its first co-branded export of medicinal cannabis to German-based Pedanios GmbH (“Pedanios”) and is in preparation for an upcoming second shipment. Further, the Company continues to advance negotiations relating to joint ventures and supply agreements in more jurisdictions and will provide details upon successful entry into definitive agreements with these counterparties.
About Cronos Group:
Cronos Group, is a geographically diversified and vertically integrated cannabis company that operates two wholly-owned Licensed Producers (“LPs”) regulated within Health Canada’s Access to Cannabis for Medical Purposes Regulations (the “ACMPR”) and holds a portfolio of minority investments in other Licensed Producers and ACMPR applicants. The company’s flagship LPs, Peace Naturals Project Inc. (Ontario), and In The Zone Produce Ltd. (British Columbia) are collectively situated on over 125 acres of agricultural land and are currently licensed to produce 2,600 kg of cannabis on an annual basis. The Company also holds minority equity positions in Licensed Producers Whistler Medical Marijuana, Hydropothecary, and Abcann Medicinals. With interest in five Licensed Producers and two LP applicants, Cronos Group is focused on building an iconic brand portfolio, providing patients with compassionate and personalized care, and creating value for our shareholders.
This news release may contain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities legislation. All information contained herein that is not clearly historical in nature may constitute forward-looking information. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements. This news release contains information obtained by the Company from third parties and believes such information to be accurate but has not independently verified such information.
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.
For more information, please visit www.thecronosgroup.com.
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