The Flowr Corporation (CVE:FLWR) (OTCMKTS:FLWPF), the cannabis cultivator, said it is on the brink of seeing a step-change in its results as the group posted solid fourth-quarter and full-year numbers for 2019.
The three months to December 31, 2019 saw the firm report its highest quarterly production to date, at 661kg of dried cannabis, which led to revenue of C$1.6 million. The group said it also sold through all of its BC Pink Kush packaged in the fourth quarter and around 30% of the quarter's output and 69% of sales were attributed to this product.
"Our flagship purpose-built indoor facility in Canada is finally fully operational and licensed. We are producing only high quality and high THC strains out of it, which we know consumers demand and are willing to pay a premium for," Flowr's CEO Vinay Tolia noted in the results statement.
"Sales trends and demand for our BC Pink Kush strain remain robust and promising. Our foundational thesis that growing high-quality cannabis at scale is difficult and only a few companies are both focused and able to do so is playing out in our view."
"In Europe, we recently joined a shortlist of companies with EU-GMP certification which will open the medicinal cannabis opportunity for us there soon. We now have certain GMP certifications in Australia as well as Europe. Our conviction in our strategic direction is further validated by management leading yet another round of financing in a very challenging capital markets environment. 2020 will be a big year for Flowr," he added.
Post the year-end, the company firmed up its finances, closing a non-brokered C$20 million secured convertible debenture unit placing on April 27, 2020, led by Flowr’s chairman and CEO who committed over C$10 million.
In March this year, the firm said it had restructured 25% of its global workforce, saving in excess of C$6 million in annual expenses. The same month, its European subsidiary Holigen received its EU-GMP certification at its facility in Sintra Portugal, putting Flowr on that shortlist of cannabis companies with this license in Europe.
The firm said it will be focused initially on driving dried flower sales out of Holigen.
In addition, In January this year, the group appointed Irina Hossu as its finance chief to help lead the next stage of global growth.
The net loss for the fourth quarter of 2019 was C$26.9 million versus C$6million in the same period a year earlier. Revenue was C$1.6 million, down from C$3.2 million in the same period of 2019.
For the year as a whole, the net loss was C$36.9 million versus a loss of C$17.9 million for 2018.
Flowr said it expects to see a substantial increase in production and sales in the latter half of 2020 and onward given the full operation of the Kelowna 1 facility and production of primarily high-THC strains, including BC Pink Kush, BC Tahoe OG and BC Louis XII.
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