Sales from Company's Nevada Operations Tracking Strong with a Compound Weekly Growth Rate of 15%; Positive Cash Flow Forecasted During the First Half of 2020
LAS VEGAS, Nov. 4, 2019 /PRNewswire/ - Flower One Holdings Inc. ("Flower One" or the "Company") (CSE: FONE) (OTCQX: FLOOF) – Nevada's largest cultivator, producer, and full-service brand fulfillment partner, announced today that sales from its current operations are tracking strong with a compound weekly growth rate of 15% since the first official sale out its flagship greenhouse facility on August 5, 2019. The Company is projecting to reach positive cash flow during the first half of 2020.
Flower One's continued success with the rapid execution of its Nevada operations is allowing the Company to pursue measured expansion into California where it has commenced negotiations to purchase a 50-acre site, with an option to purchase up to an additional 150 acres adjacent to the initial site. The target property is located in an approved cannabis cultivation and production zone. More importantly, the site is at the advanced pre-development stage, with the majority of permitting work complete and all required utilities available and installed on site. In addition, Flower One believes the site includes some of the most favorable tiered tax structures in the State of California for any cannabis cultivation and production facility. These tax agreements provide the Company with a major strategic lever to combine these tax-efficient economics with its proven operational cost-efficiencies to be a leading low-cost, large scale operator in the California cannabis market. For strategic and proprietary reasons, the Company is not able to disclose details about the exact location of the property.
Subject to Flower One concluding such negotiations successfully, the advanced state of readiness of this site may allow Flower One to have a meaningful presence in the California cannabis market two years earlier than originally expected. The Company has prepared plans that would allow construction of Phase I, which would include a production facility, to begin by Q1 2020. The early commissioning of such a production facility would see the Company generate revenue in California well in advance of its first harvest, through the purchase of existing, locally-sourced biomass.
"Our Nevada operations, at 455,000 square-feet today, represents one of the most advanced high-tech cannabis cultivation and production facilities anywhere in the world," said Ken Villazor, President and CEO of Flower One. "This, along with the Company's clear sightline to positive cash flow, positions Flower One very well in its pursuit to become an industry leader in the U.S. cannabis sector. Strategically, we can now place some measured attention to our plans to expand into California. This property acquisition will put Flower One in a position to execute in California at scale and at an industry leading pace, which is exactly what we have done in Nevada. California is the largest cannabis economy in the world, with 39 million residents, 250 million visitors annually with 2019 cannabis revenues exceeding $3 billion dollars and expecting to rise to $7.2 billion dollars by 20241. It is a natural extension of our business based on our team's extensive experience building and operating large-scale CPG fulfillment in the State of California".
"Flower One has existing relationships with top California brands such as Kiva, Cookies and Old Pal. In fact, nine of our current 14 brand partners have their roots in California, and they represent the leading brands in cannabis today. This strong connectivity to major California cannabis brands, coupled with this strategic property acquisition, perfectly aligns with our business development and growth strategy for the U.S cannabis market. We are excited and looking forward to supporting cannabis brands and consumers with consistent, safe, high-quality cannabis at scale in California, arguably the most important cannabis market in the world".
The Flower One team includes best-in-class greenhouse, cultivation, production facility designers, builders, engineers and operators, including the General Contractor, the Dennis Group, who is under an exclusive partnership with Flower One. The California design is based on the Company's successful and proven 455,000 square-foot cannabis cultivation production facility in Nevada, the largest of its kind in the state. The Flower One team delivered this facility, from construction to first harvest in less than 14 months. Today, this facility is one of the most technology-driven cannabis operations in North America with yields exceeding original estimates by 85% and at an industry-leading cash cost of US $0.45/gram.
Flower One's planned California facility under the current Conditional Use Permit amendment would allow for the initial facility to be up to 700,000 square-feet, of which 500,000 square feet would be available for cultivation. Based the Company's existing facility design in Nevada, such a California facility would produce approximately 400,000 pounds (182,000 kilograms) of high-quality flower and trim annually.
1Arcview Market Research, Echelon Partners
About Flower One Holdings Inc.
Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. By combining more than 20 years of greenhouse operational excellence with best-in-class cannabis operators, Flower One offers consistent, reliable, and scalable fulfillment to a growing number of industry-leading cannabis brands. Flower One's flagship 400,000 square-foot greenhouse and 55,000 square-foot production facility is used for large scale cannabis cultivation, processing, and manufacturing. Flower One also owns and operates a second production facility in Las Vegas, with 25,000 square-feet of indoor cultivation and a commercial kitchen that will produce several of the nation's top-performing edible and beverage brands. Flower One produces a wide range of products ranging from wholesale flower, full-spectrum oils, and distillates to finished consumer packaged goods including flower, pre-rolls, concentrates, edibles, beverages, and topicals for the top-performing brands in cannabis.
The Company's common shares are traded on the Canadian Securities Exchange under the Company's symbol "FONE" and in the United States on the OTCQX Best Market under the symbol "FLOOF". For more information, visit: https://flowerone.com
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 actual 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.
Forward-looking statements may include, without limitation, statements relating to the Company's expected growth rate; forecast of positive cash flows; Company's ability to become an industry leader in the U.S. or to acquire any property, obtain any permits to operate, or commence operations in California; benefits relating to any tax structures related to any potential acquisition in California; market projections related to the cannabis industry in California; the Company's ability to leverage its brand partners' presence in California; the expected yields in Nevada and the cash cost per gram; production estimates from the California facility; and Flower One's ability to produce several of the nation's top-performing edible and beverage brands and to continue to produce a wide range of products ranging from wholesale flower, full-spectrum oils, and distillates to finished consumer packaged goods.
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 latest final base shelf prospectus dated October 22, 2019 (the "Prospectus") filed on its issuer profile on SEDAR at www.sedar.com.
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 Prospectus. All forward-looking statements in this press release are made as of the date of this press release. 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 Prospectus.
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. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Flower One Holdings disclaims and does not undertake any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.