1933 Industries Inc (CSE:TGIF) (OTCMKST:TGIFF) posted fiscal year 2019 results after the close on Thursday that saw revenue jump 44% year-on-year to $18.1 million, driven by strong contributions from its cannabis subsidiaries.
The Vancouver-based company said its 100% owned subsidiary, Infused Manufacturing — a Las Vegas-based manufacturer of hemp and cannabidiol-based medicinal and skincare products — contributed $9.9 million in annual revenue.
Similarly, its 91%-owned Alternative Medicine Association LC (AMA) — a licensed medical and adult-use cannabis cultivation and production facility in Las Vegas that creates its own line of products and manufactures other company’s brands — contributed $8.1 million in total revenue. AMA’s products include concentrates such as Cake Batter, Crumble and Sugar; a vape pen sold with distillate oil; and several flower strains.
Meanwhile, for the fourth quarter, the company said “steady growth across its subsidiaries” netted $5.2 million in revenue, the largest quarterly haul for the company.
The company's net loss for the year stood at $19.1 million of which $5 million was chalked-up to a one-time non-cash impairment write-down of a non-performing subsidiary, and $3.4 million in biomass purchases.
For the fiscal year 2019 ended in July, the company said it had working capital of $22.5 million, compared to $11 million on July 31, 2018.
The company had a strong balance sheet with a cash position of $17.6 million, compared to $5.1 million a year earlier.
Focused on long-term viability
In a statement accompanying 1933’s latest numbers, CEO Chris Rebentisch said: “We are razor-focused on continuing to ensure the long-term viability of the company. We have implemented cost-cutting measures aimed at reducing our current operating expenses, improving efficiencies and strengthening our product offerings.”
“Exceeding expectations, we increased revenues by 44% from our previous year while awaiting our new cultivation facility to become operational. We oversaw a 130% growth in revenues for our CBD brand portfolio, as well as a 245% increase of cash to execute on our growth plan,” he added.
The first harvest from the company’s recently completed 67,750-square-foot cultivation facility in Las Vegas is expected in December, the company said in a statement, with subsequent harvests expected every two weeks.
It pointed out that the facility positions 1933 as the largest wholesale supplier of premium craft flower to licensed dispensaries and secures a reliable supply of materials for its AMA product line. The plant is expected to produce 700 pounds of cannabis flower, with all flower rooms up and running by January 2020.
“By the end of this fiscal year, we had completed the construction of one of Nevada's largest indoor cultivation facilities for premium craft cannabis and had begun to transfer our cannabis plants to the new facility,” noted Rebentisch.
The 1933 Industries boss said the company continued to make progress on its infrastructure projects in Nevada, while targeting promising markets in Arizona and Colorado.
“Our proprietary Canna Hemp brands are emerging as significant players in the industry and continue to grow across the nation,” said Rebentisch.
“We have also attracted some of the best brands in the industry as licensing partners as we continue to increase market share in Nevada as one of the largest wholesalers of cannabis products to legal dispensaries,” he added.
Strong revenue outlook
“We forecast strong revenue growth in 2020 as we expand our proprietary portfolio of AMA branded THC flower and concentrates, continue innovating our unique, differentiated, quality-based CBD Canna Hemp portfolio and as our recently added licensing partnerships bear fruit,” Rebentisch noted.
With more than 42 million visitors each year, Las Vegas is poised to become one of the world’s largest adult-use cannabis markets and 1933 is well-positioned in the silver state.
“We anticipate significant margin improvements as we complete the build-out of new cultivation and production facilities in Nevada and become less reliant on wholesale biomass suppliers,” said Rebentisch.
“With our focused vision on delivering the highest quality consumer branded goods, we have a disciplined growth path to scale up operations in 2020 and beyond," he added.
1933 Industries owns licensed medical and adult-use cannabis cultivation and production assets, proprietary hemp-based, CBD-infused branded products, CBD extraction services and a specialized cannabis advisory firm.
Contact Uttara Choudhury at [email protected]
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