Delta 9 Cannabis Inc (TSX:DN) said it has completed the installation and implementation of its new fully automated preroll manufacturing equipment at the company's Winnipeg, Manitoba, facilities, significantly increasing the company's capacity to manufacture prerolled cannabis products.
The company also announced that the preroll automation project has been financed in partnership with the Canadian Agricultural Partnership AG Action Manitoba program, through a contribution agreement for $175,000, or 25% of the overall project cost.
"The expansion in preroll manufacturing capacity marks a significant milestone for Delta 9. In 2022 we produced and sold over one million cannabis prerolls, generating over $2.3 million in revenue," said John Arbuthnot, chief executive officer of Delta 9 in a statement.
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"We anticipate that the new automated preroll equipment will allow Delta 9 to produce up to four million prerolls per year with significantly lower manufacturing costs and improved contribution margins from the sale of preroll products. We want to thank the government of Manitoba for their partnership in this investment through the AG Action Manitoba program,” he added.
The company said it plans to add multiple strain-specific and innovative cannabis preroll products to its portfolio in 2023 and views the preroll segment as a key growth driver for the company's wholesale cannabis business.
The Canadian Agricultural Partnership is a bilateral agreement between the government of Canada and the government of Manitoba which oversees the AG Action Manitoba program. The program finances investments in the Manitoba agriculture sector with a directive to enhance the diversification, competitiveness, and sustainability of the agriculture, agri-food and agri-product sector by accelerating the pace of innovation in the province of Manitoba.
Delta 9 is a vertically integrated cannabis company focused on bringing the highest-quality cannabis products to market. The company sells cannabis products through its wholesale and retail sales channels, and sells its cannabis grow pods to other businesses.
Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc, is a licensed producer of medical and recreational cannabis, and operates an 80,000-square-foot production facility in Winnipeg. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand.
Contact the author at jon.hopkins@proactiveinvestors.com