The Company's large-scale cannabis extraction
facility, The Plant, can now begin processing and product
formulation in time to meet expected demand of Cannabis 2.0
CALGARY, Oct. 15, 2019 /CNW/ - Westleaf Inc. (the
"Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) is
pleased to announce its large scale cannabis extraction, processing
and product formulation facility, The Plant by Westleaf
Labs, received a standard processing licence from Health Canada
(the "Standard Processing Licence") and is ready to start
operations immediately. The Standard Processing Licence will allow
Westleaf to process bulk cannabis to create and sell derivative
products through a variety of commercial arrangements.
"This is a major catalyst for Westleaf to generate material
revenue through the sale of derivative cannabis products and by
offering contract manufacturing services," said Scott Hurd, President and CEO of Westleaf. "The
issuance of the Standard Processing Licence is timely as Westleaf
prepares to launch its cannabis 2.0 products upon legalization
which is expected on October 17,
2019".
Cannabis 2.0 is the legalization of the next wave of
recreational and medicinal cannabis products currently set to begin
in Canada on October 17th, 2019. It will allow
cannabis manufacturers and retailers to provide consumers with a
wide range of new cannabis products including high quality and safe
vape cartridges, edibles, concentrates and other oil products.
The 15,000 square foot Phase I of the facility has been built to
European Union good manufacturing practice (GMP) specifications and
is designed to process up to approximately 65,000 kgs of dried
cannabis per annum into anticipated high quality edibles,
concentrates, vape and oil products, including Westleaf's first
in-house product, a line of vape pens under the brand General
Admission, as well as products under the Company's other house
brands, Backstage, and wellness brand, Loon. The Plant has an
additional 45,000 square feet of space to expand extraction
capacity as well as add additional product lines based on consumer
preferences once the additional products are licensed post
October 17, 2019.
With the pending legalization of cannabis derivative products,
Westleaf anticipates strong industry wide demand for efficient
extraction, processing and formulation capacity. The scalability of
The Plant ensures Westleaf is well positioned to capitalize on the
expected demand growth for contract manufacturing, tolling
arrangements, white labeling, and in-house product formulation. In
July 2019, Westleaf signed its first
extraction contract with Delta 9 for white label derivative
cannabis products worth at minimum approximately $4 million per annum with an option to increase
up to $16 million per annum.
"The Delta 9 contract is the first of what we hope to be a
number of similar arrangements between licensed producers, product
developers and others who are preparing for the coming legalization
of derivative cannabis products such as vapes, edibles, topicals
and beverages, or what is called Cannabis 2.0," noted Hurd. "We are
preparing Westleaf to be in a strong position to capitalize on the
expected spike in consumer demand for these products later this
year and into 2020 and beyond."
In addition, Westleaf has now satisfied ATB's condition
precedent (receipt of Health Canada standard processing licence) to
draw the previously announced $3.7
million of additional capital in the form of a $2.7 million term loan and a $1.0 million line of credit for working capital
purposes.
Westleaf Operational Updates:
- Prairie Records – Named the top retailer
in Canada by the Grow UP
Conference and Expo, Prairie Records is generating revenue
through three stores in the Saskatoon region and one in Calgary, with up to 20 more locations under
development including downtown Calgary and Edmonton and a flagship store in the tourist
centre of Banff, Alberta;
- Thunderchild Cultivation – Phase I (80,000
square feet) of the large-scale cultivation facility in
Battleford, Saskatchewan is fully
funded and on track for completion and submission of its Health
Canada evidence package for a cannabis standard cultivation licence
by the end of 2019.
About Westleaf Inc.
Westleaf is a Canadian cannabis company focused on cannabis
brands, extraction and production of derivatives, wholly owned
retail, as well as cannabis cultivation. The Company's Health
Canada licensed extraction and processing facility, The
Plant, is expected to produce high quality and consistent
cannabis derivatives and consumables, both for Westleaf's in-house
brands as well as white label products. Westleaf's retail concept,
Prairie Records, leverages the instinctual tie between
recreational cannabis and music with stores operating or in
development across Western Canada.
The Company's Thunderchild cultivation facility is scheduled
for completion at the end of this year.
Neither 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
Cautionary Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that involves discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always
using phrases such as "expects", or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements. In this news release, forward-looking statements relate
to, among other things, (i) retail cannabis stores that Westleaf
plans to open; (ii) the construction of Westleaf's production
facilities and the timing for completion of same; (iii)
commencement of production at Westleaf's production facilities;
(iv) commencement of operations at the Plant, its capacity to
manufacture and extract cannabis derivative products and
corresponding scalability, its ability to provide a competitive
advantage by being adaptive to consumer needs and material revenue
that may be derived from its operations; (v) products and brands to
be produced from Westleaf's production facilities and the products
and services that Westleaf plans to offer; (iv) timing of
provincial and federal regulatory approvals; (vii) timing of
legalization of certain derivative products and the anticipated
benefits and impact on Westleaf; (viii) changes in cannabis
consumption habits among Canadians; (ix) anticipated revenue from
contractual arrangements with Delta 9; * draw down on credit
facilities with ATB; and (xi) the processing and production
capabilities of Westleaf's extracting and cultivation facilities.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are
not limited to: risks relating to the ability to obtain or maintain
licenses to retail cannabis products; review of Westleaf's
production facilities by Health Canada and receipt of licenses from
Health Canada in respect thereof; future legislative and regulatory
developments involving cannabis, including the passing of
regulations regarding derivative cannabis products; inability to
access sufficient capital from internal and external sources,
and/or inability to access sufficient capital on favourable terms;
the labour market generally and the ability to access, hire and
retain employees; the ability of Westleaf's production facilities
to operate and perform at peak production; general business,
economic, competitive, political and social uncertainties; the
satisfaction of conditions precedent under Westleaf's credit
facilities; timing and completion of construction of Westleaf's
production facilities and retail locations; and the delay or
failure to receive board, ATB Financial or regulatory approvals,
including any approvals of the TSX Venture Exchange, as applicable.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on the forward-looking
statements and information contained in this news release. Except
as required by law, Westleaf assume no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change, except as required by
law.
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SOURCE Westleaf Inc.
