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Delta 9 Cannabis Inc. was one of the Benzinga Global Small-Cap Conference sponsors on December 8-9, 2020. The information contained in this article in no way represents investment advice or opinion on the part of Benzinga or its writers and is intended for informational purposes only.
Few industries have had a better 12 months than cannabis.
Not only did many dispensaries get to stay open during COVID lockdowns, but the industry got a huge boost from election night as five states passed new legalization initiatives.
It’s no surprise then that cannabis stocks have been trending upward, and many expect 2021 to be a pivotal year for the industry. Companies like Emerald Health Therapeutics (OTCQX: EMHTF), Curaleaf Holdings Inc. (OTCQX: CURLF), The Supreme Cannabis Company (OTCQX: SPRWF), and 4Front Ventures Corp (OTCQX: FFNTF), among others, are on consumers’ radar.
Delta 9 Cannabis Inc. (OTCQX: VRNDF)(TSX: DN), a Canadian-based vertically integrated cannabis company, also benefited from these developments. The company did not experience any interruption in any of its three business divisions — cultivation and wholesale, retail stores, and B2B consulting and grow pods — and is proceeding with expansion plans.
This is what you need to know about the company.
Delta-9 in The Cannabis Space
Through its in-house cultivation, processing, and dispensary capabilities, Delta 9 brings premium quality cannabis products to wholesale and retail channels. The company is a market leader, holding a 35% market share in Manitoba with 10 retail stores in Western Canada and planning for a total of 20 by the end of 2021.
Additionally, Delta 9 operates a production facility capable of producing 8,325 kg of cannabis per year with licenses to sell to 72% of Canada’s population and has supply agreements with top industry manufacturers Auxly Cannabis Group (TSX.V:XLY) and Decibel Cannabis Company (TSX.V:DB).
Delta 9 Growing Platforms – Grow Pods
Delta 9 was one of the first LPs licensed in Canada. In addition to cultivation, wholesale and retail stores, Delta 9’s Grow Pod division strives for its sales of cannabis genetics, grow pod platforms, and consulting activities.
Delta 9 Grow pods are premium cannabis growing platforms with hardware and software solutions for the indoor agriculture marketplace. Their ultimate goal is to allow more manageable growth of premium cannabis products in a more efficient, productive manner, all at the lowest cost. In fact, Delta 9’s production cost per gram is estimated at $0.67.
Grow pods are 40-foot cube shipping containers retrofitted to be able to cultivate cannabis hydroponically and provide a high level of control over the crop. These pods are modular, scalable, stackable and designed to mitigate the risk of significant crop loss.
This business division allows the company to expand into the US cannabis market as the industry begins to develop there. The Grow Pod division provides the company with an additional diversified and high margin revenue stream, as well as valuable partnership agreements with licensed cannabis companies through supply agreements.
Delta 9 Grow Pod facility – 2-minute video
Steady Revenue Streams in 2020 Are Leading the way To a Positive 2021
The company’s Q4 2020 guidance results are proof that Delta 9 exceeded expectations. These are a few highlights:
The Company anticipates net revenues for the three-month period ending December 31, 2020 to be between $13.7 million and $14.2 million.
This compares with: $10.6 million for the same period in 2019, an increase of between 29% and 34%. $13.1 million sequentially from the third quarter of 2020, an increase of between 5% and 8%.
The Company anticipates revenues for the year ending December 31, 2020 to be between $51.8 million and $52.3 million, compared to $31.8 million for the same period in the prior year.
The Company anticipates reporting direct cannabis production cost per gram of $0.67 and total cost per gram of $0.80 for the fourth quarter of 2020, compared with $0.74 and $0.86 respectively for the third quarter of 2020.
The Company anticipates reporting total grams of cannabis produced of 2,128,288 for the fourth quarter of 2020, compared with 1,908,875 grams of cannabis for the third quarter of 2020.
The Company anticipates reporting total retail transactions processed of 202,347 for the fourth quarter of 2020, compared with 184,750 for the third quarter of 2020.
Recently the company released guidance regarding its Q4 2020 results, anticipating record revenue results. John Arbuthnot, CEO of Delta 9 said, “Delta 9 is working to separate itself from its peers by posting strong financial and operating results and continuing to grow its revenue streams from its three core business units.”
For more information, please visit Invest.delta9.ca.
Image courtesy of Delta 9
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