TORONTO–(BUSINESS WIRE)–Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) (“Heritage” or the “Company”), is pleased to provide an update on recent activities including sales, new products, and the Company’s expansion into the United States.
Recent Sales Activities and Market Performance
- For the 12 months beginning January 25, 2021, Heritage subsidiary Premium 5 produced $19.6 million in revenue and exceeded milestone expectations set at the time of the acquisition. This represents 113% growth from Heritage’s fiscal 2020 of $9.2 million in revenue
- Record sequential sales growth of approximately 30% over sales in the fourth quarter, based on shipped orders
- Became the only third party listed brands on Canopy Growth’s medical platform Spectrum Therapeutics, Canada’s second largest medical platform
- Received purchase orders to be listed on another large medical platform with products expected to launch as early as March
- #2 in Canadian Sales of Concentrates (up from #4 in Q4) and #5 in Canadian Sales of Oils (up from #6 in Q4)1
- #2 vape brand in British Columbia
- In Ontario, 19 stock keeping units (“SKUs”) were available in Q1 through the OCS and an additional nine will be added this spring for a total of 28 available products
- As of November 2021 in Ontario, in the concentrates excluding hash category Heritage has 17% market share and is the #1 selling concentrate company in the category
- Added 45 net new SKU listings across the country accelerating sales growth in all key product categories
“We are continuing to see a strong positive response to our suite of products across the country, accompanied by growing sales figures – topping our prior quarter by approximately 30% in Q1 which is our second quarter delivering over 20% sequential growth,” commented David Schwede, CEO of Heritage. “We previously signalled continued growth in sales and new product development, and we are delivering quarter after quarter as our platform outpaces other key market players.”
Along with new product launches and strong provincial re-orders, Heritage continues to see advancements in both market penetration and new listings across the provinces. Recently Heritage products became available for purchase on one of the largest online medical sales platforms in Canada – Canopy’s Spectrum Therapeutics, and received purchase orders to launch on another large online platform as early as March. These additions are setting the stage for further growth in 2022.
In Ontario, Heritage gained new listings across multiple categories, giving Heritage a total of 19 SKUs in Canada’s largest market, with nine additional SKUs coming to the OCS in the spring – a strong signal on the sell-through the province is seeing with Heritage brands.
As a result of the successful completion of the milestone set out in the Premium 5 acquisition agreement, Heritage has issued 107,142,858 common shares.
Flower and Pre Rolls
In 2021, Heritage launched ten pre rolls and six flower SKUs in multiple provinces with encouraging provincial orders, resulting in the category making up 19% of our portfolio sales within a short time-frame. Heritage will be further diversifying our portfolio by adding 12 new SKUs to the flower product line-up during the summer, including infused products from the Pura Vida and RAD lines, which have had a strong and increasing following.
Based on US data, pre-roll products make up 11% of sales in California, and the sale of infused pre rolls make half, or 5.5%, of the pre roll category2. In Canada, pre rolls make up 16% of current market sales, and based on this data a potential 8% market for infused pre rolls. With these infused product launches and successful sell through of our products to date, Heritage is well positioned for strong growth in this area and plan to be a leader in the category, contributing to further growth in revenue.
US Expansion Update
With the financial backing of Merida Capital, Heritage has made significant progress on the licensed manufacturing facility build-out in support of the relationship with 3Fifteen Primo Cannabis in the state of Missouri. With the project now fully-funded, the Heritage team has progressed with equipment orders, and is establishing the biomass supply chain for the facility. Production is expected to begin in the spring of 2022, with revenue from the sale of branded products to medical cannabis consumers in Missouri following shortly after.
Based on strategic imperatives and due diligence activities, Heritage management has decided to no longer pursue the acquisition of Capna Intellectual/dba Bloom Brands, and instead will focus efforts on current U.S. activities that better align with short and long term goals.
About Heritage Cannabis Holdings Corp.
Heritage Cannabis is a leading cannabis company offering innovative products to both the medical and recreational legal cannabis markets in Canada and the U.S., operating under two licensed manufacturing facilities in Canada. The company has an extensive portfolio of high-quality cannabis products under the brands Purefarma, Pura Vida, RAD, Premium 5, feelgood., the CB4 suite of medical products in Canada and ArthroCBD in the U.S.
ON BEHALF OF THE BOARD OF DIRECTORS OF HERITAGE CANNABIS HOLDINGS CORP.
The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but is not limited to, assumptions related to cash flow and capital resources, and expectations related to the supply and manufacturing agreements, the intended expansion of the Company, and partnerships and Joint Venture Partnerships.
By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.
An investment in securities of the Company is speculative and subject to several risks including, without limitation, the risks discussed under the heading “Risks and Uncertainties” in the Company’s annual management discussion and analysis for the year ended October 31, 2020 and dated February 26, 2021. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.
1 National Headset Data
2 California Headset Data