TORONTO, ON--(Marketwired - May 01, 2017) - Cronos Group Inc. (formerly PharmaCan Capital Corp.) (TSX VENTURE: MJN) ("Cronos" or the "Company") is pleased to report the financial results and accompanying management discussion and analysis for the year ending December 31, 2016; copies are available on the Company's website (www.thecronosgroup.com) and have been filed with SEDAR (www.sedar.com).
During the year ended December 31, 2016, Cronos shifted the corporate strategy to an owner operator model focused on optimizing and ramping up production at wholly-owned subsidiaries Peace Naturals Project Inc. ("Peace Naturals" or "Peace") and In the Zone Produce Ltd. ("ITZ"). Concurrently, the Company concentrated on establishing incremental domestic and international distribution networks. As a result, Cronos is presently in the best operational and strategic position since the Company's inception, and new management is pleased to provide the following updates:
- Corporate Developments
- Repositioned Company from investment holding company to an operational company, rebranding to Cronos Group in October 2016
- Attracted top-tier senior management with blue chip experience
- Raised in excess of $38 million while carefully managing dilution
- Recognized as the top performing company on TSX Venture Exchange in Diversified Industries
- Peace Naturals
- Closed an accretive acquisition of Peace Naturals in September 2016
- Renovation of Building 1, including:
- GMP grade production area
- Expansion of extraction capacity with newly acquired supercritical CO2 equipment
- Buildout and operational upgrades in Building 2 and 3, including:
- Advanced infrastructure improvements: (i) commercial scale Phase 3 power infrastructure, (ii) HPS and LED light platforms, (iii) custom CO2 piping and 14-ton CO2 tank, (iv) automated Dosatron watering system
- Lighting R&D to significantly improve yields
- Capacity of existing buildings forecasted to reach 5,000 kg per year
- More than doubled acreage to 31 contiguous acres in the Okanagan Valley, BC
- Sales license achieved February 2017
- Joint venture, Indigenous Roots, formed with First Nations
- International Strategy
- Secured distribution across 500+ pharmacies throughout Germany
The original Peace Naturals facility ("Building 1") is now back online after a redesign and renovation complete with a Good Manufacturing Practices ("GMP") grade production area and a state-of-the-art extraction laboratory. The two remaining production facilities on the Peace Naturals campus ("Building 2" and "Building 3") have also undergone significant upgrades and design improvements over the past six months. Buildings 2 and 3 are purpose built, indoor production facilities equipped with the latest technology in advanced HPS and LED lighting systems, a 14-ton CO2 tank, and automated Dosatron watering/nutrient systems.
The upgraded production infrastructure and improved cultivation methods at Peace have already resulted in significant yield increases. As a result, the production capacity for existing facilities is expected to increase to approximately 5,000 kilos per year.
Additionally, the Company has significantly upgraded its extraction infrastructure, acquiring a customized CO2 extraction system capable of efficiently producing upwards of 6,000 liters of finished cannabis oil annually. The Company expects material increases to both extract production and sales in the coming quarters.
As part of the global strategy, new management has focused on developing and solidifying the Company's international distribution channels. Peace Naturals is now distributing cannabis through 500 pharmacies in Germany.
ITZ, Cronos' other wholly-owned licensed producer, secured its sales license from Health Canada on February 2017. The asset's location in the Okanagan Valley in British Columbia makes ITZ uniquely positioned to take advantage of the forthcoming recreational legalization in Canada.
Finally, Cronos also entered a joint venture with First Nations in 2016 to create Indigenous Roots Inc. ("Indigenous Roots"). This partnership includes the construction of an initial production facility on the ITZ's licensed property in British Columbia as well as plans for a national distribution platform.
"The Cronos team remains focused on optimizing our existing manufacturing footprint, expanding our production capacity, and establishing an international distribution network in the process of building world-class brands. We remained disciplined in our approach and are confident that the best is yet to come," says Mike Gorenstein, Chief Executive Officer.
About The Cronos Group
Cronos Group, is a geographically diversified and vertically integrated cannabis company that operates two wholly-owned Licensed Producers ("LPs") regulated within Health Canada's Access to Cannabis for Medical Purposes Regulations (the "ACMPR") and holds a portfolio of minority investments in other Licensed Producers. The Company's flagship LPs, Peace Naturals Project Inc. (Ontario), and In The Zone Produce Ltd. (British Columbia) are collectively situated on over 125 acres of agricultural land and are currently licensed to produce 2,600 kg of cannabis on an annual basis. The Company also holds minority equity positions in Whistler Medical Marijuana and other Licensed Producers. Cronos Group is focused on building an international iconic brand portfolio, providing patients with compassionate and personalized care, and creating value for our shareholders.
This news release may contain "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian securities legislation. All information contained herein that is not clearly historical in nature may constitute forward-looking information. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements. This news release contains information obtained by the Company from third parties and believes such information to be accurate but has not independently verified such information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information, please visit www.thecronosgroup.com.