Tweed Marijuana Inc. Releases Year End Financial Results and Provides Operational Update

SMITHS FALLS, ON, June 29, 2015 /CNW/ - Tweed Marijuana Inc. ("TMI" or "the Company") (TSXV: TWD), parent company of Licensed Producers Tweed Inc. and Tweed Farms Inc., is today releasing audited financial statements for the 15-month period ended March 31st, 2015 (FY15).  The Company's audited financial statements and Management's Discussion and Analysis document are available on SEDAR.

As previously communicated, TMI received approval from the Canada Revenue Agency (CRA) to revise its year-end to March 31st in its inaugural operating year to align the year-end of TMI with its subsidiaries, Tweed Inc. and Tweed Farms Inc., resulting in a 15-month fiscal year.  As a consequence, the fiscal period ended March 31, 2015 included a 5th quarter.  The new fiscal year, fiscal year 2016, commenced April 1st, 2015 and will end on March 31st, 2016.

Sales for the three and fifteen month periods ended March 31st were $1,225,689 and $2,371,351 respectively. The average price per gram sold was $7.25 and $7.17 for the three and fifteen-month periods ended March 31st. In addition, 52% of sales for the 15-month period occurred in the 5th quarter of the year.

Sales and volume grew steadily over the 15-month period, with quarter-over-quarter growth including 91% growth in the fifth quarter over the fourth quarter as the Company continued to advance customer acquisition and retention strategies. Constant, diverse supply of cannabis requires a large growing platform to satisfy the diversity of clientele in the market and as such TMI invested in a large platform throughout FY15 to bring supply and demand into equilibrium. The Company ended FY15 with 34,000 sq. ft. of energy efficient greenhouse growing space and 12 of an eventual 30 climate-controlled indoor growing rooms at its state-of-the-art facility at 1 Hershey Drive in Smiths Falls, ON.

Gross margin for the three and fifteen month periods ended March 31st were 197% and 119% respectively, due to the gain on the change in the fair value of biological assets (seeds and cannabis plants) more than offsetting inventory expensed and production costs, in accordance with International Financial Reporting Standards (IFRS). The Company ended Fiscal 2015 with a healthy inventory of pre-salable product in various stages of production, including unplanted genetics.  Further explanation of the Company's accounting for biological assets and inventory is available in the notes to the audited consolidated financial statements and Management's Discussion & Analysis (MD&A) on SEDAR. 

The Company's Net Loss for the Fiscal 2015 was $9,346,461 or a loss of $0.29 per share on both a basic and diluted basis.  The loss reflects the initial year of launching commercial operations in a highly regulated industry and establishing the largest cannabis-growing platform in Canada. The Company considers these necessary investments for an industry leader who wishes to attract and retain a large percentage of the market.

TMI's balance sheet at the end of March 31, 2015 was in a strong position to advance business priorities and opportunities with cash and cash equivalents of $21,445,821 and working capital of $24,850,548.

Selected Annual & Quarterly Information:


FY 2015

Q5

Q4

Q3

Q2

Q1

Grams Sold

324,471

166,657

87,138

44,470

26,205

-

Revenue

2,371,351

1,225,589

641,309

316,117

188,236

-

Gross Margin

2,826,204

2,411,855

230,595

74,475

109,279

-

Gross Margin %

119%

197%

36%

24%

58%

-

Operating Expenses

11,031,929

2,890,447

2,885,221

2,493,089

1,281,724

1,491,418

 

Subsequent Events:

On June 24th, 2015 the Company announced an all-stock acquisition of Bedrocan Cannabis Corp. (Bedrocan Canada) (TSX.V:BED). The transaction, contingent on Bedrocan Canada shareholder approval and requisite regulatory approvals, is expected to close at the end of August 2015. Bedrocan Canada will operate as a distinct Licensed Producer and brand and continue to pursue research & development opportunities that will benefit all TMI operating companies. Existing subsidiaries Tweed Inc. and Tweed Farms Inc. will also continue to operate under their present structure and distinct market positioning.

Building permits were issued in April 2015 to commence infrastructure enhancements at Tweed Farms' 20-acre property in Southwestern Ontario. The current phase of construction will add 316,000 sq. ft. of cost-effective growing space and a separate 24,000 sq. ft. packaging facility with a storage vault.

Analyst Call:

An analyst call is scheduled for 8:30 am ET, Tuesday, June 30th, 2015. Bruce Linton, Chairman and CEO of Tweed Marijuana Inc. and Tim Saunders, CFO of Tweed Marijuana Inc. will provide a financial and operational update covering FY15 and subsequent events.

Dial in: 888-231-8191
Conference ID: 76354407

 

SOURCE Tweed Marijuana Inc.

For further information: Jordan Sinclair, Communications Manager, Jordan@tweed.com, 613-704-2185 ex 309

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