Zenabis Global (TSX:ZENA) posted net revenue of $11.6-million from its cannabis and propogation segment for the first quarter of 2019, up from $3.4-million in the fourth quarter of 2018, which included only its cannabis operations.
Since the creation of Zenabis via a reverse takeover in January 2019, the company more than doubled its licensed production capacity to 13,400 kg as at May 30, 2019. The company also delivered 31% outperformance relative to cultivation design capacity in April, with cultivation output of 809 kg, 63% greater than an earlier forecast of 495 kg.
In a statement, Andrew Grieve, CEO, said Zenabis has undertaken a range of corporate development initiatives in the past several months, including securing key supply and distribution arrangements and additional licenses and approvals; expanding its product offerings across Canada; developing relationships in Europe; and obtaining financing to support our rapid growth.”
Mr. Grieve said Zenabis demonstrated a clear ability to expand production and cultivation output during the first quarter of 2019. “Our April 2019 output exceeded our design capacity by more than 31%, and our overall cultivation output was 63% greater than forecast,” he added.
For three harvests thus far in May, the company has exceeded design capacity by 28%. “With an additional harvest being accelerated from June into May, we anticipate further strong total cultivation performance in May relative to forecast,” he said. “This outperformance demonstrates the capabilities of our experienced cultivation team, and the quality of our facilities across Canada.”
Mr. Grieve said the company’s results “demonstrate progress towards our goal of becoming one of the largest licensed producers of medical and adult-use recreational cannabis in Canada.”
Mr. Grieve said Zenabis currently anticipates second quarter revenue from the plant propagation business to be in a range of $16-million to $18-million, and net revenue from the cannabis business to be in the range of $10-million to $12-million. Net cannabis revenue is subject to the timing of shipments and does not yet include any meaningful impact from the production of oil products.
