TORONTO, April 25, 2019 /CNW/ - Flower One Holdings Inc. ("Flower One" or the "Company") (CSE:FONE) (OTCQB:FLOOF) is pleased to provide a corporate update as the Company continues to execute on its growth strategy in the Nevada cannabis market.
The Company has made significant operational progress on many fronts including:
A. Conversion of 400,000 Square Feet of Greenhouse Cultivation Capacity
In May of last year, the Company began a 12-month process of converting the largest commercial greenhouse in Nevada for large-scale hydroponic cannabis cultivation. The conversion is now approximately 95% complete, and is expected to be fully completed on schedule.
The Company has now hit an important milestone as it has initiated the onboarding of plants into its greenhouse. To date, the Company has achieved the following cultivation milestones:
- Two climate-controlled, spectrum adjustable cutting cells are in full operational mode and have rooted more than 100,000 cannabis cuttings (small plants).
- In the greenhouse, the Company has constructed three expansive, multi-density ebb and flood zones, which are now fully populated with plants.
- The greenhouse has been designed to have eight large "flower" zones. Once fully canopied, the greenhouse is expected to operate on a perpetual cycle of harvesting one zone per week (representing, on average, 10,000 plants per harvest). To date, we are 50% canopied, with four of the eight zones planted, amounting to 200,000 square feet of plants.
We anticipate that the Company's inaugural Zone One harvest will commence in June, 2019. Once fully canopied, the Company should be capable of producing over 140,000 lbs (or 62,500 kg) of dry flower annually, and will house in the eight flower zones over 80,000 plants per crop cycle.
B. Construction of 55,000 Square Foot Post-Harvest, Extraction and Packaging Facility
The construction of the Company's production facility is progressing.
The Company has now completed the buildout of the initial 15,000 square feet of this facility, including a fully automated wetting line, pruning line and two high-tech cutting cell rooms.
The exterior construction of the additional 40,000 square foot, two-story structure was completed in March 2019. The Company has now commenced the internal work to support the installation of the post-harvest, extraction and packaging line technology.
The Company plans to accelerate operations in the coming months to support the inaugural Zone One harvest in the Company's flagship greenhouse cultivation facility.
C. Building a Strategic Portfolio of Brand Partners: Eight Brands and Counting
The Company's business model is focused on leveraging the scale of its cultivation and production capabilities to become the leading brand-fulfillment partner in Nevada. For established cannabis brands looking to build national prominence and gain Nevada market share, having a retail shelf presence in the unique and growing Las Vegas and state-wide market is paramount.
To this end, the Company is committed to delivering turnkey solutions and superior quality to support all of our Brand Partners. The Company can provide seed-to-retail-ready product that is custom packaged and delivered to retail with a commitment to consistent, reliable, high-volume delivery to meet our Brand Partners' requirements.
The Company is in the process of assembling a very strong roster of Brand Partners, having announced eight such Brand Partners already in 2019.
Flower One's Growing Brand Partners
Rapid Dose Therapeutics: RDT has developed a proprietary, fast-dissolve cannabis delivery technology. This smoke-free technology represents a unique delivery platform that is both discrete and easy to use which makes it very compelling for the tourism-driven Nevada cannabis and CBD market.
Flyte Concentrates: As a distillate brand, Flyte Concentrates is best known for its two product lines: FlytePen and JetPack. FlytePen is a slim distillate vaporizer system with a cartridge containing 0.8ml of premium cannabis oil. Using a proprietary process and formulation, the FlytePen can rapidly vaporize the thickest and most purified cannabis oils.
In addition, Flyte JetPacks are convenient single-dose 10ml liquid THC or CBD shots, about 2mm thick and about the size of a credit card. The contents of the package can be added to any hot or cold beverage for a discreet experience.
Old Pal: Known for being one of the fastest growing cannabis brands in California, the Old Pal suite of products is primarily pure, dried, packaged, shareable flower. The products are available in three varieties: Indica, Sativa, and Hybrid. Already the lowest cost provider of legal cannabis in California, the partnership with Flower One will reinforce the value-oriented positioning of the Old Pal brand. Old Pal's half ounce, pre-ground rolling kit is an all-in-one convenient cannabis solution for consumers on-the-go and includes branded rolling papers that uniquely pay homage to cannabis culture circa 1960s and 1970s.
Palms: Another California based cannabis brand, Palms is about providing a thoughtful experience with the casual and recreational consumer in mind. Their products lines such as 'Social' and 'Chill', ensures that consumers are able to find a product that speaks to their experience level and knowledge base. Palms' 'Social' sativa pre-roll features a sour tangie strain with a distinct citrus scent and flavor. The 'Chill' indica hybrid pre-roll induces a relaxing experience, featuring a taffie strain with subtle citrus flavors blended with hints of caramel.
HUXTON: Arizona-based HUXTON, is known for their knowledge in cannabis science and terpene chemistry. They focus on using premium strains and uniquely formulate each of HUXTON's blended product categories, HIFI, RISE and ZEN, which Flower One will be launching in Nevada. Each VIBE product series is labeled by "how it will make you feel," allowing consumers to easily pick their desired experience. Great market positioning for consumers visiting Las Vegas who are often looking to experiment and sample new brands. Flower One will be making HUXTON's experience-based products available in Nevada in pre rolls, flower tins, and vape pens.
CannAmerica Brands: From one of the United States' true cannabis pioneers has emerged Colorado-based CannAmerica Brands and its signature Fruit Juice Gummies and Super Soft Gummies products. With their partnership with Flower One will come new and improved formulas which will be categorized according to three flavour profiles: sweet (strawberry banana, peach, orange sherbet), sour (blue raspberry, cherry, bomb pop) and a sweet and sour combination. In addition, new, sleek packaging will also be part of the brand partnership with Flower One in order to drive brand consistency in Nevada and across all of CannAmerica Brands' markets.
Grenco Science: California-based Grenco Science are pioneers in the cannabis hardware space, responsible for engineering the advanced technology behind the internationally-available and ever popular G Pen line of cannabis vaporizers. The ability to innovate is key in the cannabis hardware space and Flower One sees the launch G Pen's new Gio vaporizer as revolutionizing the cannabis experience to align with a modern lifestyle. The Gio is a draw-activated concentrate vaporizer that is intuitive, portable, and accessible, and features a cutting-edge cartridge system with an optimized heating temperature and integrated airpath for maximum vaporization, and consistent, smooth, and flavorful pulls.
The Medicine Cabinet: An ultra-premium house of brands, The Medicine Cabinet aims to offer the most discerning consumers a variety of high end, boutique-style recreational products and brands, including: Don Pablo's signature line of hand rolled Premium Classics and Premium Exotics, Bomb Girl's sleek selection of pre-rolled Baby J's, and Slims, and for the connoisseur, Coffeeshop Classics, a premium packaged flower brand.
Management believes that having a mix of brands and product offerings that cover a diverse consumer spectrum is very important to the Company, as it will allow Flower One to respond to consumer expectations and desired experiences across the full pricing and product category matrix.
Management expects that the Company's portfolio of Brand Partners will continue to grow and give the Company an expanding and diversified mix of product, stock keeping units (SKUs) and delivery platforms, including packaged flower, pre-rolls, oils, distillates, concentrates, gel caps, vaporizers, edibles and topical to deliver greater choice and brand diversity – something that both consumers and Nevada cannabis retailers expect as the market continues to grow and mature.
D. Transforming the Company's 25,000 Square Foot Indoor Cultivation & Production Facility
The Company continues to maximize the full suite of human talent, resources and assets at its 25,000 square foot indoor cultivation and production facility (originally acquired from NLV Organics Inc.). The Company's cultivation team has executed on the project of growing and transferring the initial plant material from the Company's indoor facility to the greenhouse.
With the completion of the transfer of plant material to the greenhouse, the Company's intended use of the indoor facility will now focus on:
- Testing and trialing new cannabis strains prior to scaling their cultivation at our greenhouse.
- Preservation and vaulting of our ever-expanding genetic bank, which currently comprises a library of over 100 unique cannabis strains.
- Craft cultivation of select strains to support our Brand Partners and any strategic, limited run SKUs.
- Select processing and production of Brand Partner SKUs.
The Company's goal is to create a high-performing research centre, aimed not only at accelerating the diversification of cannabis strains for Nevada's growing recreational market, but to better support the successful expansion and product lines of our Brand Partners.
E. Retail Channel Filling: The Benefits of Scale
With the Company's cultivation, production and Brand Partner efforts advancing on schedule, the Company is increasingly turning its attention to working closely with Nevada's expanding retailers.
To this end, in March the Company launched Old Pal in the Nevada market and the Company is now working toward launching SKUs for all of our Brand Partners in Nevada, including Flyte Concentrates and CannAmercia Brands, whose launch is currently expected to occur in this second quarter.
To support the Company's retail channel filling efforts, the Company plans to lease and open two new facilities:
- A 4,000 square foot Sales Office to house the Company's Nevada sales and marketing team, which is also expected to include a call center and showroom to display the range of product SKUs the Company will be producing for its Brand Partners.
- A 30,000 square foot Pre-Packaging and Inventory Management Facility that would be responsible for managing the logistics and supply chain management of the Company's Brand Partners product packaging, hardware and ancillary labelling materials.
We are also pleased to announce the hiring of long-time Nevadan Debbie Bingham as the Director of Sales and Marketing for Flower One's Nevada operations. Debbie brings a depth of experience in business development, sales, marketing, business unit planning and channel and partner development to the Flower One team. Previously, Debbie was an integral part of growing Vegas.com into a US$300M company through her knowledge of executing a range of B2B and B2C business strategies.
F. Company Financings and Exchange Traded Funds (ETFs)
In February, the Company completed a US$30M lease equipment facility, with US$20M being drawn down to date. This provides the Company with additional financial flexibility to be responsive in managing the Company's growth plan in Nevada and beyond.
In March, the Company completed its first prospectus offering as a public company for a total raise of CAN$57.5M (including full exercise of over-allotment option). We have used and plan to use these funds for the ongoing construction and development of our flagship greenhouse and production facility, working capital and general corporate purposes.
These successful financings were followed more recently by three Exchange Traded Funds (ETFs) taking positions in the Company. These ETFs are the Horizons U.S. Marijuana ETF, the Horizons Emerging Marijuana Growers Index ETF, and the Evolve U.S. Marijuana ETF.
This has been a period of positive operational performance for the Company. The Board, Advisory Team and Management wish to acknowledge and express our sincere thanks to the entire Flower One team for the passion and tireless commitment to deliver results for the Company. We have a best-in-class team and are extremely proud of all that they have accomplished to date.
On behalf of our Board, Advisory Team, and Management, we also wish to express our ongoing gratitude to you for being a valued shareholder and for sharing our vision of Flower One.
President and CEO
Flower One Holdings Inc.
Cautionary Note Regarding Forward Looking Information
Statements in this press release that are not statements of historical or current fact constitute "forward looking information" within the meaning of Canadian securities laws and "forward looking statements" within the meaning of United States securities laws (collectively, "forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates," "potential," "should," "may," "will," "plans," "continue" or other similar expressions to be uncertain and forward looking. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Forward-looking statements may include, without limitation, statements relating to the successful execution of the Company's strategy, including its plan to become the leading brand fulfillment partner in Nevada, the Company's ability to complete the conversion of the greenhouse on schedule, the expected operation and perpetual cycle harvesting zone of the Company's greenhouse, the timing of Flower One's inaugural Zone One harvest, the production and housing capacity of the Company once fully canopied, potential accelerated operations of the 55,000 Square Foot Post-Harvest, Extraction and Packaging Facility, the Company's ability to incorporation new brand partners and develop new products, the continued growth, maturity and retail sales of the cannabis sector in Las Vegas and, more broadly, in Nevada, and the United States, the Company's ability to consistently meet its Brand Partners requirements, the effect of the Company on its Brand Partners' brands, the focus of the Company's indoor facility, the Company's ability to create a high-performing research centre, the Company's ability to achieve scale cultivation, the Company's ability to launch SKUs for all of its Brand Partners, the Company's ability to open new sales and marketing and pre-packaging and inventory management facilities, the Company's ability to raise further capital and the confidence the capital markets will express in supporting Flower One's overall business plan, future profitability, , dividends, volume and pace of anticipated catalysts for the Company, new opportunities, future growth and production, potential return on equity, date of completion of the processing facility, future retail presence and potential benefits of retail strategy, and potential capabilities of the cultivation and processing facility in Nevada.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplaces in the United States through its subsidiary Cana Nevada Corp. Local state laws where Cana Nevada Corp. operates permit such activities; however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in the Company's short form prospectus dated March 22, 2019 filed on its issuer profile on SEDAR at www.sedar.com.
Although Flower One has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under United States federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the "Forward-Looking Statements" section contained in the Company's most recent management's discussion and analysis ("MD&A"), which are available on SEDAR at www.sedar.com. All forward-looking statements in this press release are made as of the date of this press release. The Company does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company's public securities filings with the Canadian securities commissions, including the Company's most recent MD&A.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE Flower One Holdings Inc.
For further information: Investor Relations & Media: NATIONAL Capital Markets, 416.848.9835, [email protected]; Flower One Holdings Inc.,Ken Villazor, President and CEO, 416.913.9642, [email protected]