The Green Organic Dutchman Holdings Ltd. (CVE:TGOD) (OTCMKTS:TGODF) reported strong growth in second quarter revenue after a busy period for the cannabis company as it began commercial production and expanded its product line.
For the three and six months ended June 30, 2019, TGOD achieved revenues of $2.9 million, a 20% increase over the prior quarter derived primarily from Europe.
In Canada, the company launched its pilot "Grower's Circle", which included sales to a small number of medical patients to test the market and the company's distribution capabilities.
The company launched two new products in the second quarter and expects to start a similar pilot in the Ontario recreational market during the third quarter of 2019.
TGOD noted that it is nearing completion of construction at its Hamilton site and Phase 1 at its Valleyfield site, with investments amounting to $53.1 million in the second quarter, bringing total additional investment in the year to date to $100.9 million.
The group reported a net loss of $16.6 million for the second quarter.
The company - which recently submitted an application to list on the Nasdaq stock market - said its management continued to maintain a disciplined approach to operational costs as it prepares for commercialization of its products in Canada and internationally.
Supply agreements, distribution deals
In the second quarter, TGOD announced provincial board supply agreements with Alberta Cannabis and BC Cannabis Stores, expanding its footprint in Western Canada.
It also achieved its organic certification for the Valleyfield facility from Pro-Cert, an internationally recognized organic certification organization.
In addition, the firm signed a distribution agreement with Mediakos UG haftunsbeschraenkt to be the exclusive distributor of CannibiGold, HemPoland's premium hemp CBD brand, for the German pharmacy market. In addition, the Company launched its Global Strategic Hemp Division.
It also entered into a multi-year agreement with Neptune Wellness Solutions Inc. for extraction, formulation and packaging services. As part of the agreement, the company will have exclusivity on extraction, formulation and packaging of certified organic products within and for the Canadian market.
Brian Athaide, CEO of TGOD commented: "Q2 was pivotal for the Company as we began commercial production in the second phase of our Hamilton site and expanded our product line for the Grower's Circle.
"The product quality feedback from the Grower's Circle has been overwhelmingly positive, confirming that patients appreciate having access to premium certified organic cannabis, an underserved segment of the market.”
“With double digit quarterly growth in Europe and construction nearing completion in Canada, the team continues to deliver on our ambitious business plan with executional excellence. We now have our first purchase order from the OCS in hand and look forward to shipping our first recreational sales this week," Athaide concluded.