CALGARY, Alberta, Aug. 27, 2020 — Sugarbud Craft Growers Corp. (TSXV: SUGR, SUGR.WT, SUGR.WS, SUGR.DB) (“Sugarbud” or the “Company“) is pleased to announce that, as part of the previously announced contract manufacturing agreement (the “Agreement“), it has formally started the final development and qualification of its additive-free, full-spectrum vape cartridges with Heritage Cannabis Holdings Corp. (CSE: CANN) (“Heritage“).
Under the terms of the Agreement, Heritage will continue to provide Sugarbud with extraction, formulation and production services for the development of its pre-filled vape cartridges utilizing proprietary, additive-free formulations.
“Our high quality, additive-free, full-spectrum vape products contain dried cannabis as the sole ingredient and are a natural and logical extension of our inhaled product strategy. Sugarbud vape products will leverage and embody the quality, consistency, flavour profiles and aromas found in our exceptional craft cannabis flower,” stated Mr. Kondrosky, CEO of Sugarbud.
New cannabis derivative products and formats such as vape cartridges and pens are a rapidly growing segment of the Canadian adult-use recreational market and Sugarbud expects that its high-quality, additive-free vape products will become a significant catalyst for future growth.
“We are confident that our partnership with Heritage will equip Sugarbud to deliver high quality products to consumers with the safety, integrity and exceptional outcomes they demand,” concluded Mr. Kondrosky.
“We are very pleased to be working with Sugarbud on the production of full-spectrum vape cartridge products to support its cannabis 2.0 strategy,” commented Clint Sharples, CEO of Heritage. “As Sugarbud’s manufacturing partner, Heritage will produce high-demand, full-spectrum cannabis oil products using no harmful additives, flavours or carrier oils, and will maintain consistency in the strain profile between Sugarbud’s craft cannabis and the final products.”
The Company expects to apply to Health Canada for an amendment to its sales license to permit the direct sale of cannabis extracts in early Q4 of 2020.
Filing of Q2 2020 Financials
Sugarbud is also pleased to announce the filing of its Q2 2020 unaudited condensed consolidated interim financial statements (“Financial Statements”) for the three months ended June 30, 2020 and related management’s discussion and analysis (“MD&A”). Sugarbud’s Financial Statements and related MD&A are available on SEDAR at www.sedar.com and on Sugarbud’s website at www.sugarbud.ca.
“The successful closing of the non-dilutive First Calgary facility and the fully-subscribed Convertible Debenture offering not only significantly improved Sugarbud’s working capital position, but is a clear vote of confidence in the Company’s management and its focused strategy on producing premium select-batch cannabis products,” stated Chris Moulson, CFO of Sugarbud.
“Together with our established lease financing relationship, these financings put Sugarbud on track to deliver on its stated operational and commercial scale-up plans,” concluded Mr. Moulson.
Sugarbud is an Alberta-based, consumer-driven craft cannabis company; focused on the cultivation and production of superior, select-batch, craft cannabis products. Our vision and mission are to become a trusted and well-respected consumer brand – renowned for providing exceptional high-quality craft cannabis products to legal markets by delighting the most discerning of cannabis consumers.
Heritage Cannabis Holdings Corp. is a vertically integrated cannabis company that owns two Health Canada approved licenced producers, Voyage Cannabis Corp. and CannaCure Corp., both of which also have industrial hemp licenses. Additionally, Voyage recently received its sales license from Health Canada, and Heritage will be launching its own products in the BC, AB, and MB markets in summer 2020, with other provinces to follow. Working under its licenses, Heritage has two additional subsidiaries, Purefarma Solutions, that provides extraction services, and a Medical Services Division which is focused on cannabis based medical solutions. Heritage as the parent company, provides the synergies and resources for its subsidiaries to advance its medical and adult use products and services both domestically and internationally.
Forward Looking and Cautionary Statements
This news release contains forward-looking statements. More particularly, and without limitation, this news release contains statements concerning: Sugarbud’s assessment of future plans, operations and cannabis cultivation, including sales, marketing and distribution opportunities; the Company’s ability to remain operating in accordance with developing public health efforts to contain COVID-19; product quality; partnerships, including with Heritage; the development, production and sale of cannabis derivative products, including vape cartridges; applying for an amendment to its sales license to permit direct sale of cannabis extracts; future growth; and the ability to build shareholder value. When used in this document, the words “will,” “anticipate,” “believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by Sugarbud. Forward-looking statements are subject to a wide range of risks and uncertainties, and although Sugarbud believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to: currently contemplated expansion and development plans may cease or otherwise change; production of cannabis may be lower than expected, Sugarbud may not obtain the required approvals from Health Canada, including with respect to an amended sales license; demand for Sugarbud’s products may be lower than anticipated; results of production and sale activities; results of scientific research; changes in prices and costs of inputs; demand for labour; demand for products; failure of counter-parties to perform contractual obligations; failure to maintain consumer brand recognition and loyalty of customers; reliance on relationships with wholesalers and retailers for distribution of products and failure to maintain strategic business relationships; intense competition, including from illicit sources; uncertainty and continued evolution of markets; product liability litigation; reliance on information technology; infringement on intellectual property; failure to benefit from partnerships; sensitivity of end-customers to increased sales taxes and economic conditions; failure to comply with certain regulations; departure of key management personnel or inability to attract and retain talent; actions and initiatives of federal and provincial governments and changes to government actions, initiatives and policies and the execution and impact thereof; the ability to implement corporate strategies; the state of domestic capital markets; the ability to obtain financing; changes in general market conditions; industry conditions and events; the size of the medical marijuana market and the recreational marijuana market; government regulations, including future legislative and regulatory developments involving medical and recreational marijuana; construction delays; risks inherent in the agricultural business, such as insects, plant diseases and similar agricultural risks which can have a significant impact on the size and quality of the harvest of cannabis crops; competition from other industry participants; and other factors more fully described from time to time in the reports and filings made by Sugarbud with securities regulatory authorities. In addition, the Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company. While the precise impact of the COVID-19 virus on the Company remain unknown, rapid spread of the COVID-19 virus may have a material adverse effect on global economic activity, and can result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company. Please refer to Sugarbud’s most recent annual information form and management’s discussion and analysis for additional risk factors relating to Sugarbud, which can be accessed under Sugarbud’s profile on www.sedar.com. Except as required by applicable laws, Sugarbud does not undertake any obligation to publicly update or revise any forward-looking statements.
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