CALGARY, Feb. 18, 2020 /CNW/ - Westleaf Inc. (the
"Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) is
pleased to provide the following corporate and operations update
with respect to its ongoing cost reduction initiatives, financial
position, corporate rebranding, and operations.
"The Qwest brand was built on our commitment to quality
cannabis. Despite the headwinds the industry currently faces,
consumer demand for quality cannabis products is strong and we are
optimistic about the future of the industry" said Ben Sze, President and CEO of Westleaf.
"We will continue to be fiscally disciplined and
uncompromising in our quest to forge a meaningful relationship
with consumers. The synergies of pairing We Grow BC
with Westleaf are already being realized and I am excited about
2020 as we bring The Plant and Thunderchild facilities online."
Corporate Update
Corporate Rebrand
The combination of Westleaf and We Grow BC Ltd. resulted in an
opportunity to create a market leading integrated producer of
ultra-premium cannabis. In recognition of this new chapter in
our history, on March 1st,
2020, Westleaf is expected to close a series of internal
transactions to effect a corporate rebrand and commencing
March 2nd, 2020 will carry
on business under the name Decibel Cannabis Company Inc.,
and expects to commence trading under the symbol "DB" on the
TSX-V thereafter. The Company will announce its OTCQB trading
symbol on or before March
2nd, 2020 or as soon as such symbol has been made
available to the Company. The Company will also make available its
new corporate website and related corporate materials on
March 2nd, 2020.
New Strain Launches
Qwest and Qwest Reserve brands continue to deliver on the
promise to introduce unique strains to the market with the
introduction of eleven new strains through January 31, 2020, including stand-outs Wedding
Cake, Gelato 33, and MAC 1 among others. The new cultivars are
offered in flower and pre-roll form and registered across
Alberta, British Columbia, Ontario and Saskatchewan. The new strains have maintained
or increased wholesale pricing levels in comparison to previous
Qwest and Qwest Reserve cultivars which is reflective of the demand
for the cannabis product produced at the Qwest Estate and the
sustained consumer demand for rare cultivars of high-quality
flower.
Launch of New Product Brand
In the coming weeks, The Company is expected to launch
"Blendcraft by Qwest" as a complement to the existing Qwest
and Qwest Reserve brands. With an offering of high-quality
blended pre-rolls, the Company expects the launch of "Blendcraft
by Qwest" to reinforce its strong premium portfolio and more
fully monetize the commercial value of its harvests.
Operational Update
Cultivation Operations Update
The Company is pleased to announce that modifications have been
made to the construction of the Thunderchild facility to align with
existing design and SOPs from We Grow's Creston cultivation facility. These
modifications will allow the Thunderchild facility to match the
craft, ultra-premium product being produced from the We Grow
facility in Creston, BC.
Construction is expected to be completed April 2020.
Extraction Operations Update
The Plant continues its commissioning and qualification
activities on its extraction, filtration and distillation processes
to optimize its technical and regulatory efficiencies, as it awaits
its sales license amendment.
Retail Operations Update
Following the launch of Cannabis 2.0 products, the Company's
four Prairie Records stores achieved record revenue in the month of
January, with combined sales of approximately $930 thousand for the month, reflecting month
over month sales growth of approximately 8%. Additionally, the
operating Prairie Records stores have achieved positive EBITDA from
its retail operations inclusive of retail-related corporate
overhead.
Construction began in late January on the Company's University of Alberta and Palace Theatre cannabis
retail locations and both locations are expected to open
May 2020. Furthermore, The Company
has completed demolition on its Banff location and is currently evaluating
designs for the potential flagship retail location.
Synergies Capture
As a part of opportunity created by the integration of Westleaf
and We Grow BC Ltd. ("We Grow"), the Company has executed
several cost-reduction measures to improve profitability and
cashflow. These initiatives include the elimination of 11 positions
at Westleaf resulting in projected annualized savings of
approximately $1.4 million exclusive
of one-time severance costs. Additionally, the Company has
rationalized its retail portfolio significantly, from twenty-two
(22) non-active retail locations to eleven (11) to reduce related
carrying costs and lease obligations. With the execution of
this phase of our integration programs, the Company is applying a
disciplined and growth orientated approach to profitability.
Liquidity Position
As of January 31, 2020, the
Company had access to $12.3 million
of capital, comprised of $8.3 million
of cash and the ability to draw up to $4.0
million of undrawn, low cost, non-dilutive capital under its
non-revolving credit facilities with ATB Financial. The Company's
capital projects are fully funded with existing capital on
hand.
About Westleaf Inc.
Westleaf Inc is uncompromising in the process and craftsmanship
needed to deliver the highest quality cannabis products and retail
experiences. Westleaf has three production houses operating or
under development along with its wholly owned retail business,
Prairie Records. The Qwest Estate in Creston, BC is licensed and operating 26,000
square feet of cultivation space producing the widely championed,
rare cultivar-focused brands Qwest and Qwest Reserve. These
products sell in five provinces across Canada. Thunderchild Cultivation, an 80,000
square foot indoor cultivation facility in Battleford, SK is scheduled to be completed
and licensed in 2020. The Plant, Westleaf's extraction facility,
has 15,000 square feet of Health Canada licensed extraction and
product development space. This production house will fuel the
growth of our brands Qwest, Qwest Reserve, and Blendcraft by Qwest,
into new and innovative product formats like vapes, concentrates,
edibles and beyond.
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 the timing and introduction of the Plant and
Thunderchild facilities' online platform, the timing and expected
completion of a series of internal transactions effecting the
Company's corporate rebranding, including the Company continuing
under the name "Decibel Cannabis Company Inc.", trading under the
Company's new OTCQB trading symbol, and the availability of the
Company's new corporate website and related materials, the
development of new products, the timing and quality of the
Company's launch of "Blendcraft by Qwest", the Company's receipt of
a sales license amendment, the Company opening new retail locations
by the University of Alberta and Palace
Theatre, the timing and the construction of the Thunderchild
Cultivation facility and corresponding license application, the
ability of the Thunderchild Cultivation facility to produce certain
products, and the Company's ability to execute on the foregoing.
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
licences to retail cannabis products; review of the Company's
production facilities by Health Canada and receipt or maintenance
of licences from Health Canada in respect thereof; future
legislative and regulatory developments involving cannabis;
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; general business, economic,
competitive, political and social uncertainties; the satisfaction
of conditions precedent under the Company's credit facilities;
timing and completion of construction and expansion of the
Company's production facilities and retail locations; and the delay
or failure to receive board, regulatory or other approvals,
including any approvals of the TSXV, 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, the Company assumes no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change, except as required by
law.
Non-GAAP Financial Measures
This press release contains the term "
EBITDA". This indicator is not a recognized
measure under International Financial Reporting Standards
("IFRS") and does not have a standardized meaning prescribed
by IFRS. Accordingly, the Company's use of this term may not be
comparable to similarly defined measures presented by other
companies. The Company believes that EBITDA is a useful indicator
of operating performance and is specifically used by management to
assess the financial and operational performance of the Company.
The Company believes that this measure, in addition to conventional
measures prepared in accordance with IFRS, provide investors with
an improved ability to evaluate the underlying performance of the
Company. EBITDA is defined as net earnings before any deductions
for net finance costs, stock-based compensation, taxes,
depreciation, and amortization.
Accordingly, these Non-GAAP Financial Measures are intended
to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
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SOURCE Westleaf Inc.
