- Delta 9 Bio-Tech Inc subsidiary licensed producer of medical and recreational cannabis with 80,000 square foot production facility in Winnipeg
- Operates seven cannabis retail stores under the ‘Delta 9 Cannabis Store’ brand in two provinces
- Business to Business’ segment, selling its own proprietary ‘Grow Pods’
- Helping in fight against coronavirus by launching Decontamination Pods
What Delta 9 Cannabis does:
Delta 9 Cannabis Inc. (TSE:DN) (OTCQX:VRNDF) is a vertically-integrated cannabis company focused on bringing the highest quality cannabis products to market.
The company - one of Canada’s original cannabis companies – sells products through its wholesale and retail sales channels and markets 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, Manitoba, Canada, which was first licensed in March 2014. The company sells its recreational cannabis products in markets across Canada.
The group also currently operates cannabis retail stores under the ‘Delta 9 Cannabis Store’ brand in two provinces, with plans to open additional outlet retail stores in jurisdictions which allow for privatized cannabis retail over the next 24 months.
Delta 9 also has a ‘Business to Business’ segment, selling its proprietary Grow Pods, Cannabis genetics, and providing consulting and licensing services to other cannabis businesses.
Grow Pods are modular, scalable, and stackable production units which are based on retrofitted 40-foot shipping containers.
The company has also adapted its technology to help in the fight against coronavirus (COVID-19), launching Decontamination Pods - D-Pods - a retrofitted shipping container specially equipped with UV lights and heaters that will kill the virus on things like personal protective equipment.
The D-Pods are being manufactured at the same facility in Manitoba where the Grow-Pods are developed. The company has inaugurated a subsidiary, Blue Horseshoe Manufacturing Inc that will be responsible for producing up to 20 D-Pods per month, depending on demand. Priced around $250,000, the group said in December that they were already gaining interest from customers in both the public and private sector.
How is it doing:
Delta 9 Cannabis CEO John Arbuthnot noted that 2021 is shaping up to be “a promising year” and, so far, the company is off to good start.
In June, Delta 9 said it anticipates generating revenue of between C$15.5 million and $17.3 million for its second quarter of 2021, up from $13.0 million during the same period last year and an increase from the $13.2 million it recorded in 1Q this year.
The company also expects revenue for the six-month period ending June 30, 2021, to be between $28.8 million and $30.5 million, compared with $24.8 million for the same period a year earlier.
During the previous quarter (1Q), Delta 9 recorded 11% year-over-year revenue growth despite coronavirus (COVID-19) lockdowns and overall weakness in the Canadian cannabis market.
Earlier in June, Delta 9 announced that its strategic partner Oceanic Relief Inc has been granted five new cannabis retail store licenses in the province of Newfoundland and Labrador from The Newfoundland and Labrador Liquor Corporation (NLC).
Oceanic has a Strategic Cooperation Agreement (SCA) with Delta 9 that provides a variety of services relating to cannabis production, the development of standard operating procedures and sanitation programs, and marketing services to develop the Oceanic brand and other services supporting the acquisition of its Health Canada license.
Delta 9 also owns a 5% stake in Oceanic’s production facility operations, existing retail store, and retail store expansion plans, as well as a 20-year supply agreement with Oceanic and the Government of Newfoundland and Labrador.
Meanwhile in April, the company announced the grand opening of its twelfth Delta 9 Cannabis retail store, located in the City of Winnipeg. It is also the company’s ninth cannabis retail outlet in the Province of Manitoba.
Delta 9 currently has two stores in Alberta and one in Saskatchewan and plans to have up to 20 Delta 9 Cannabis retail stores operating by the end of 2021.
Inflection points:
- Further Delta 9 Cannabis Stores opening
- Expansion of Grow Pod third-party facilities
- D-Pod progress for coronavirus
What the boss says:
Commenting on the company’s preliminary second quarter 2021 financial results, Delta 9 Cannabis CEO John Arbuthnot said in a statement: “We anticipate our Q2, 2021 performance will demonstrate a record revenue quarter for Delta 9, with the company’s three business segments contributing to the success of the quarter.”
Arbuthnot added: “We anticipate continued growth in all three of our business segments units through the back half of 2021.”
Contact Sean at sean@proactiveinvestors.com
