Dear GTEC Supporters,
We wanted to thank all of you for a remarkable and transformational year. 2019 has been a pivotal year in our growth strategy, which has seen GTEC evolve from a pre-revenue cannabis construction and development company to a revenue generating company, producing some of the highest quality products available in the sector, which has resulted in favourable gross margins and selling prices.
We have stayed true to our original vision of producing premium products that are superior to what is primarily available in the current market, and while many companies claim “premium” quality, this is something that we have demonstrated our ability to execute on. There has been constant media coverage regarding an over-supply of Cannabis in Canada, yet our products to date are delivering results that contradict the current state of the market. Our products are in high demand and selling out promptly within the recreational sales channels. We believe that this will ultimately separate us from the rest throughout 2020.
In 2020 the Company anticipates another pivotal year as all facilities reach full production capacity, and our products continue to penetrate the legal cannabis market across Canada. Below are some of the key highlights and accomplishments from this year, which we believe will set the stage for a successful 2020 year.
- Completed construction of Tumbleweed Farms (Chase, B.C.) and Grey Bruce Farms (Tiverton, Ontario).
- Made substantial progress on the GreenTec Bio-Pharmaceuticals and 3PL facilities, with both expecting to complete construction this upcoming year.
- Alberta Craft Cannabis received Standard Processing and Medical Sales Licences from Health Canada. These licences are in addition to the Standard Cultivation Licence Alberta Craft has held since September 2017.
- Grey Bruce Farms received its Standard Cultivation Licence.
- Tumbleweed Farms received its Standard Cultivation, Standard Processing and Medical Sales Licences.
- BLK MKT TM and TENZO TM brands were launched in B.C. and Saskatchewan and have been receiving highly positive feedback from cannabis retailers and consumers.
- Increased operational and infrastructure efficiencies at Alberta Craft, while commencing production at Grey Bruce and Tumbleweed. These three licenced and operational facilities are now migrating to full capacity and are expected to have an annualized production run rate of approximately 4,000 kg of cannabis flower (excluding additional GTEC cultivation facilities that may come on stream).
- GTEC’s GreenTec TM medical brand has been available across Canada via GTEC’s licensed partners since late 2018.
- GTEC is currently selling BLK MKT TM and TENZO TM branded retail products in B.C. and Saskatchewan, with plans to expand its national distribution into additional provinces in 2020.
- GTEC is pleased that its products are generating strong initial demand while achieving premium price points and robust gross margins. This supports the Company’s core thesis that cannabis aficionados appreciate superior quality products, and are willing to pay a premium for them. The Company has received several re-orders from the provinces and anticipates this continuing in 2020.
- Zenalytic Laboratories, GTEC’s analytical testing subsidiary, is generating revenue from both internal (GTEC cultivation facilities) and external (non-GTEC) clients.
- GTEC completed $12.6 Million in equity financing in 2019, which is sufficient to continue operations in 2020.
- Completed a re-payment of $800,000 to its senior secured $5 million note holder, reducing the outstanding principal balance to $4.2 million.
- The Company strengthened its senior leadership team by adding the former CEO of Shoppers Drug Mart and former chairman of Aldo, Jurgen Schreiber, to its Board of Directors.
- Transitioned its CFO and finance team to be more operations focused.
- Committed to restructure its corporate overhead and implement disciplined cost controlling measures in order to significantly reduce the cash burn. As a result, these initiatives have strengthened the organization’s financial position, which will result in the company being cash flow positive from operations in the coming fiscal quarters.
- Divested non-core and non-operational assets to bolster our balance sheet and to focus on the production of premium quality cannabis.
- Added in-house legal counsel to further assist with regulatory, finance and corporate matters.
2019 was the year we demonstrated our ability to develop purpose-built facilities and get them licenced, to produce top tier quality products, and achieve the sales and Provincial listings to realize our efforts. It was also a year in which difficult and humbling decisions were made; such as divesting of retail assets in order to focus on cultivation, terminating mergers and acquisitions that we felt were not in the Company’s best interests at the time, and transitioning certain members of our management team, in order to develop a team that would be more in line with our current operational mandates.
In the 2020 year, our mandate will be to focus on increasing revenue generation, by distributing products through sales channels that provide for the highest gross margins (i.e.: Provincial recreational sales channels versus B2B wholesale). We believe that this will result in the Company being cash flow positive from operations in the coming fiscal quarters, and for the organization to be profitable sometime in the 2020 year. Our journey into cannabis legalization has only just begun, and there are many more accomplishments and developments that we expect to deliver to all of you in the coming year, as we continue to operate in a fiscally disciplined manner, realize economies of scale, and remain laser-focused on achieving profitability.
Thank you all for your support and patience as we executed in 2019 and your continued support in the upcoming new year. We wish our shareholders, staff, affiliates and peers all the best in 2020.
Founder, Chairman and Chief Executive Officer
GTEC Holdings Ltd
GTEC Holdings Ltd. is a specialized cannabis company which produces and distributes highly sought-after ultra-premium cannabis products in Canada. The Company has four licensed and operational assets and is currently distributing cannabis through medical and recreational sales channels.
GTEC’s exclusive cultivar collection includes rare and unique cultivars, which are not currently available from other Licenced Producers. GTEC’s premium and ultra-premium product portfolio includes; BLK MKT, TM Tenzo TM, GreenTec TM, Cognōscente TM and Treehugger TM.
The Company wholly owns operations in BC, Alberta and Ontario, and is licensed by Health Canada for the following: sales into recreational supply chains, direct sales to medical patients, extraction, and analytical testing.
GTEC is a publicly traded corporation, listed on the TSX Venture Exchange (GTEC), OTCQB Venture Market (GGTTF) and Frankfurt Stock Exchange (1BUP). The Company’s headquarters is based out of Kelowna, British Columbia. To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co
For additional information, please contact:
GTEC Holdings Ltd.
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties, delay or failure to receive board, shareholder or regulatory approvals, where applicable, and the state of the capital markets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. For instance, there can be no assurance that: the Company’s products will separate the Company from its competitors; the Company will reach full production capacity or its products will successfully penetrate the cannabis market across Canada; the Company will complete construction of GreenTec Bio-Pharmaceuticals and 3PL facilities in 2020; the Company will achieve full production capacity or successfully achieve an annualized production run rate of approximately 4,000 kg of flower; the Company will expand its distribution into additional provinces in 2020; provinces will continue to re-order the Company’s flower in 2020; the $12.6 Million equity financing closed in 2019 will be sufficient for the Company to continue operations in 2020; the Company will fulfil all debt obligations; there will be no further equity dilution; purchase order deliveries will occur as expected or that current gross margins or retail pricing are sustainable; the Company will successfully increase its revenue generation; the Company will become cash flow positive or profitable; and the Company will successfully realize economies of scale. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.