The Green Organic Dutchman Holdings Ltd (TSE:TGOD) (OTCMKTS:TGODF) announced Tuesday that it generated $11.16 million in revenue in 2019 and expects “continued sales momentum” in 2020.
In reporting its financial results for the fourth quarter and fiscal year ended December 31, the cannabis company said sales in Europe increased across all product lines, including HemPoland's newly launched line of CBD topicals.
Also, TGOD said quarterly sales in Canada increased marginally due to limited production from the Ancaster facility. It initiated production in its hybrid greenhouse in November 2019, with an eight-week flowering cycle.
Overall, the company posted quarterly revenue of $3.25 million, consisting of hemp-derived product sales in Europe of $2.56 million ($9.88 million for the year) and sales from cannabis products in Canada of $0.69 million ($1.28 million for the year).
But TGOD registered a net loss of $144.75 million in the quarter, ($195.75 million for the year) including non-cash impairment charges of $127.74 million ($127.74 million for the year) related to certain cash-generating assets being built or used in Canada, and the company's investment in Epican Medicinals.
These impairment charges are primarily due to market conditions, which have caused the company to revise its near-term and long-term growth forecasts in the reduced operating facility footprint, and the strategic decision to forgo the expansion of its proposed cultivation activities for export in Jamaica in order to focus on its Canadian operations.
“As market conditions improve, and should the company decide to bring additional cultivation zones online which would increase the expected recoverable amount of future cashflows, the non-cash impairment charges may be reconsidered and be reversed as permitted by its accounting framework,” TGOD said in a statement.
TGOD also highlighted key updates that happened after the quarter.
- Streamlined its leadership structure. As part of these changes, former president, Csaba Reider, and its former vice president of sales, Mike Gibbons, departed the organization. Their responsibilities have been consolidated under existing roles.
- Secured a research licence from Health Canada. Valid for five years, this licence allows the company to reduce the cost and accelerate the pace at which it develops new products by eliminating reliance on third parties.
- Received the prestigious Leadership in Organic Farming Award from the Canada Organic Trade Association. Organic Leadership Awards are given to industry leaders who have displayed exceptional leadership through their involvement in advancing Canada's organic sector.
- Started selling Infusers, a tasteless and odourless dissolvable powder that provides the freedom to infuse any food or beverage with cannabis.
"While 2019 was a challenging year for the entire sector, we have made significant progress on the operational front and adjusted our construction and operating plan to preserve shareholder capital and in light of changing market conditions," said CEO Brian Athaide.
"Despite taking impairment charges this quarter, as we continue to evaluate financing options, we note that the value of our assets still far exceeds our liabilities. With our first 2.0 product, TGOD Infusers, now available, our teas and vapes launching next month, as well as additional launches planned later this year, we anticipate continued sales momentum for the rest of 2020," continued Athaide.
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