Not for Distribution to U.S. Newswire Servicers or For Dissemination in the United States
All figures in USD and per BDS Analytics unless stated otherwise
Halo Labs Inc. ("Halo" or the "Company") (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce that retail sales of the Company’s Hush™ branded products have been continuing to grow in the state of California and Oregon.
According to the most recent BDS Analytics data, statewide legal cannabis sales in May 2020 reached $290 million across state licensed retailers and delivery services, increasing by fifteen percent from the trailing month and growing fifteen percent compared to May 2019. Concentrate sales were $87.8 million, down 2.6% from May 2019 but up 12% from the prior month. Hush™ vape cartridges sales constitute a majority of Halo product sales in California and have been growing despite the downward category trend from the prior year. The Company’s unaudited wholesale sales in June 2020 were approximately $700,000 up from $416,000 in May 2020.
The Company anticipates Hush™ branded products will continue to grow as the California menu expands and the recently amplified sales force onboards new dispensary customers. Halo’s Hush™ branded products are now in 80 of approximately 600 dispensaries statewide. Halo is on track to launch one, ten, and twenty piece gummy varieties with multiple flavors and infused pre-rolls as well as achieve a $1,000,000 monthly sales run rate by the end of Q3 2020.
Kiran Sidhu, CEO and Co-Founder of Halo stated, "June sales demonstrate that we have continued to execute on our vision to deliver quality, affordable cartridges to California consumers. " He continued, "We are gearing up a California launch of our rebranded Hush gummies with new packaging, new flavors, and a new all natural vegan recipe. In addition, our sales reps continue to meet aggressive sales targets with room to grow. We believe each rep may double their average store base to 20 dispensaries, implying both a balanced market penetration rate- less than 30%- and a clear path to a $1M monthly run rate wholesale business. Our Q3 2020 sales target is within striking distance and the North Hollywood dispensary has not even opened yet."
This year despite COVID-19, Oregon dispensary sales have experienced consistent, double-digit year-over-year growth and in May 2020 experienced an all-time single month high. Cannabis sales in medical and adult-use dispensaries reached $103 million up 15% from the trailing month and 87% year over year. Year-to-date sales in Oregon reached $414 million, growing by 51 percent compared to the same period in 2019 and growing at a higher rate than California.
According to BDS Analytics, retail sales of Hush™ branded concentrates in May 2020 likewise grew-163% year over year- compared to May 2019. In addition, retail sales of Hush™ branded edibles increased, growing at 375% year over year when compared to May 2019. The Hush™ brand ranks #3 in Oregon concentrate category market share and #7 in Oregon edible category market share. The Company believes the BDS Analytics figures may understate market share by not including Halo’s Exhale™ and Mojave™ branded sales of concentrates as well as the Company’s white label sales of concentrates, edibles, pre-rolls and flower. The Company’s unaudited wholesale sales were relatively constant in May and June approximately $1.40M in May and $1.34M in June.
Andreas Met, COO and Co-Founder commented, "We have led further discussions with white label partners to add gummy and sizzurp capacity. We are closer to launching new gummy SKUs in Oregon. We believe these edible program developments could lead us to $1.7M in monthly run rate sales. Other sources of organic growth include expanding pre-rolls to include infused pre-rolls, growing our clone wholesale business, and adding more dispensaries. We are currently selling in 300 Oregon dispensaries, up 36% from January 2020, and the sales force continues to add new customers. Halo is thriving amidst the challenging COVID-19 climate."
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows and extracts and processes quality cannabis flower, oils, and concentrates and has sold over 5 million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products and now via verticalization in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, the Company entered into binding agreements to acquire a dispensary in Los Angeles, 3 KushBar branded dispensaries, 5 development permits in Alberta Canada, and Canmart Limited which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada while having an international presence in Lesotho within a planned 200-hectare cultivation zone via Bophelo Bioscience & Wellness (Pty) Ltd. as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but are not limited to, statements about the sale and distribution of Halo’s products in California.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: unexpected costs or delays in the completion of the Company's proposed dispensaries and other operation; negative results experienced by the Company as a result of general economic conditions or the ongoing COVID-19 pandemic; delays in the ability of the Company to obtain certain regulatory approvals; unforeseen delays or costs in the completion of the Company's construction projects; adverse changes to demand for cannabis products; ongoing projects by competitors that may impact the relative size of the Company’s growing operation; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; increasing costs of compliance with extensive government regulation; changes in general economic, business and political conditions, including changes in the financial markets; risks related to licensing, including the ability to obtain the requisite licenses or renew existing licenses for the Company's proposed operations; dependence upon third party service providers, skilled labor and other key inputs; and the other risks disclosed in the Company's annual information form dated April 16, 2020 and available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
This press release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for the first four months of 2020 and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading "Cautionary Note Regarding Forward-Looking Information and Statements" above and assumptions with respect to market conditions, pricing, and demand. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading " Cautionary Note Regarding Forward-Looking Information and Statements"" above, it should not be relied on as necessarily indicative of future results.