CALGARY, Jan. 13, 2020 /PRNewswire/ - Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) announced today that following the closing of the merger of Westleaf and We Grow B.C. Ltd. ("We Grow"), Scott Hurd, President and Co-Founder, has resigned effective January 24, 2019.
"On behalf of Westleaf, we thank Scott for his vision, leadership and efforts that have positioned Westleaf favourably with a high quality asset base that is ripe for growth in 2020" said Cody Church, Chairman of the Board of Westleaf. "Scott co-founded Westleaf and led the organization since August 2017. We are grateful for his strategic vision that has left the company in a strong financial position with sustainable competitive positioning. Scott was a driving force behind the recently closed merger with We Grow on December 20, 2019. We wish Scott continued success in his future endeavours."
"As a founder of Westleaf, it is with a heavy heart that I announce my resignation today," states Scott Hurd. "It has been an honour and a privilege to lead Westleaf through a period of immense growth in a new and dynamic industry. Our recently completed transformative merger with We Grow has positioned Westleaf to be one of the leading ultra-premium cannabis producers in Canada with best in class realized retail pricing, strong brand awareness and significant scalability and growth potential. With the merger now closed and a new leadership team in place, I have made the difficult decision to step back from the company. I have great confidence in the new management team and board to lead Westleaf through its next stage of growth. I wish Cody, Ben and the rest of the Westleaf team and board continued success in 2020 and beyond."
Scott will work to formally transition his responsibilities over the coming weeks and will be available to support the organization as needed as a strategic advisor. Ben Sze, the former CEO of We Grow and current CEO of Westleaf, will succeed Scott as the President of Westleaf.
With We Grow's commitment to quality, it has bucked the industry trend of price compression, with the Q3 2019 financial results of We Grow demonstrating a gross realized price per gram of $11.65 (net realized price per gram of $10.06). Notably, in Q4 2019, the Company released additional flower strains into the recreational market and received an incremental $0.50 price per gram for four premium product SKUs. The Company will continue to focus on maintaining We Grow's position as a leader in the premium cannabis category with its Qwest and Qwest Reserve branded products.
Cost Reduction Initiatives
The Company continues to undertake cost reduction initiatives as it maintains focus on profitability and solidifying its position as one of the leading premium cannabis companies in Canada. As the integration of We Grow continues, Westleaf has focused on unlocking the combined synergies of the merger including the elimination of 9 positions (approximately 30% of corporate staff), resulting in projected annualized savings of approximately $1.3 million. The Company is finalizing its 2020 budget with a view to ensuring adequate adjustments are made to its cost structure to allow the Company to execute on its strategy and deploy capital towards optimizing its asset base. Effective immediately, executive leaders Shon Williams, Chief Development Officer, and Ben Kaanta, Chief Operating Officer, will be departing the Company and have transitioned their responsibilities to the current Westleaf executive team.
About Westleaf Inc.
Westleaf is a fully integrated Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as premium cannabis cultivation. Westleaf's operating cultivation facility is located in Creston, British Columbia in the heart of the Kootenays. It consists of 26,000 square feet retrofitted for phase 1 cultivation, including over 14,000 square feet of growing rooms. The Company is also building an 80,000 square foot purpose built indoor cultivation facility located in Battleford, Saskatchewan. Westleaf's cannabis production includes its brand Qwest, which is considered a preeminent luxury cannabis brand. Westleaf's extraction and processing facility, The Plant, is designed to produce high quality and consistent cannabis derivatives and consumables, both for Westleaf's in-house brands as well as white label products. Westleaf's retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things anticipated pricing, future capital requirements; Mr. Hurds ongoing involvement in the Company; the Company's business strategy, plans, cost cutting strategy, 2020 budget and ability to execute on the foregoing; . Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: risks relating to the ability to obtain or maintain licences to retail cannabis products; review of the Company's production facilities by Health Canada and receipt or maintenance of licences from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under the Company's credit facilities; timing and completion of construction and expansion of the Company's production facilities and retail locations; and the delay or failure to receive board, regulatory or other approvals, including any approvals of the TSXV, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
Non-GAAP Financial Measures
This press release contains the terms "gross realized price per gram" and "net realized price per gram". These indicators are not recognized measures under International Financial Reporting Standards ("IFRS"), and do not have a standardized meaning prescribed by IFRS. Accordingly, the Company's use of these terms may not be comparable to similarly defined measures presented by other companies. Gross realized price per gram and net realized price per gram are used by management to better understand the cannabis price per gram realized throughout a period. The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Gross realized price per gram is calculated as wholesale sales divided by the aggregate number of grams shipped during the period. Net realized price per gram is calculated as wholesales sales less excise taxes divided by the aggregate number of grams shipped during the period.
SOURCE Westleaf Inc.