The Company's large-scale cannabis extraction facility, The Plant, can now begin processing and product formulation in time to meet expected demand of Cannabis 2.0
CALGARY, Oct. 15, 2019 /PRNewswire/ - Westleaf Inc. (the "Company" or "Westleaf") (TSX-V:WL) (OTCQB:WSLFF) is pleased to announce its large scale cannabis extraction, processing and product formulation facility, The Plant by Westleaf Labs, received a standard processing licence from Health Canada (the "Standard Processing Licence") and is ready to start operations immediately. The Standard Processing Licence will allow Westleaf to process bulk cannabis to create and sell derivative products through a variety of commercial arrangements.
"This is a major catalyst for Westleaf to generate material revenue through the sale of derivative cannabis products and by offering contract manufacturing services," said Scott Hurd, President and CEO of Westleaf. "The issuance of the Standard Processing Licence is timely as Westleaf prepares to launch its cannabis 2.0 products upon legalization which is expected on October 17, 2019".
Cannabis 2.0 is the legalization of the next wave of recreational and medicinal cannabis products currently set to begin in Canada on October 17th, 2019. It will allow cannabis manufacturers and retailers to provide consumers with a wide range of new cannabis products including high quality and safe vape cartridges, edibles, concentrates and other oil products.
The 15,000 square foot Phase I of the facility has been built to European Union good manufacturing practice (GMP) specifications and is designed to process up to approximately 65,000 kgs of dried cannabis per annum into anticipated high quality edibles, concentrates, vape and oil products, including Westleaf's first in-house product, a line of vape pens under the brand General Admission, as well as products under the Company's other house brands, Backstage, and wellness brand, Loon. The Plant has an additional 45,000 square feet of space to expand extraction capacity as well as add additional product lines based on consumer preferences once the additional products are licensed post October 17, 2019.
With the pending legalization of cannabis derivative products, Westleaf anticipates strong industry wide demand for efficient extraction, processing and formulation capacity. The scalability of The Plant ensures Westleaf is well positioned to capitalize on the expected demand growth for contract manufacturing, tolling arrangements, white labeling, and in-house product formulation. In July 2019, Westleaf signed its first extraction contract with Delta 9 for white label derivative cannabis products worth at minimum approximately $4 million per annum with an option to increase up to $16 million per annum.
"The Delta 9 contract is the first of what we hope to be a number of similar arrangements between licensed producers, product developers and others who are preparing for the coming legalization of derivative cannabis products such as vapes, edibles, topicals and beverages, or what is called Cannabis 2.0," noted Hurd. "We are preparing Westleaf to be in a strong position to capitalize on the expected spike in consumer demand for these products later this year and into 2020 and beyond."
In addition, Westleaf has now satisfied ATB's condition precedent (receipt of Health Canada standard processing licence) to draw the previously announced $3.7 million of additional capital in the form of a $2.7 million term loan and a $1.0 million line of credit for working capital purposes.
Westleaf Operational Updates:
- Prairie Records – Named the top retailer in Canada by the Grow UP Conference and Expo, Prairie Records is generating revenue through three stores in the Saskatoon region and one in Calgary, with up to 20 more locations under development including downtown Calgary and Edmonton and a flagship store in the tourist centre of Banff, Alberta;
- Thunderchild Cultivation – Phase I (80,000 square feet) of the large-scale cultivation facility in Battleford, Saskatchewan is fully funded and on track for completion and submission of its Health Canada evidence package for a cannabis standard cultivation licence by the end of 2019.
About Westleaf Inc.
Westleaf is a Canadian cannabis company focused on cannabis brands, extraction and production of derivatives, wholly owned retail, as well as cannabis cultivation. The Company's Health Canada licensed extraction and processing facility, The Plant, is expected to produce high quality and consistent cannabis derivatives and consumables, both for Westleaf's in-house brands as well as white label products. Westleaf's retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada. The Company's Thunderchild cultivation facility is scheduled for completion at the end of this year.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, (i) retail cannabis stores that Westleaf plans to open; (ii) the construction of Westleaf's production facilities and the timing for completion of same; (iii) commencement of production at Westleaf's production facilities; (iv) commencement of operations at the Plant, its capacity to manufacture and extract cannabis derivative products and corresponding scalability, its ability to provide a competitive advantage by being adaptive to consumer needs and material revenue that may be derived from its operations; (v) products and brands to be produced from Westleaf's production facilities and the products and services that Westleaf plans to offer; (iv) timing of provincial and federal regulatory approvals; (vii) timing of legalization of certain derivative products and the anticipated benefits and impact on Westleaf; (viii) changes in cannabis consumption habits among Canadians; (ix) anticipated revenue from contractual arrangements with Delta 9; * draw down on credit facilities with ATB; and (xi) the processing and production capabilities of Westleaf's extracting and cultivation facilities. 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: risks relating to the ability to obtain or maintain licenses to retail cannabis products; review of Westleaf's production facilities by Health Canada and receipt of licenses from Health Canada in respect thereof; future legislative and regulatory developments involving cannabis, including the passing of regulations regarding derivative cannabis products; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the labour market generally and the ability to access, hire and retain employees; the ability of Westleaf's production facilities to operate and perform at peak production; general business, economic, competitive, political and social uncertainties; the satisfaction of conditions precedent under Westleaf's credit facilities; timing and completion of construction of Westleaf's production facilities and retail locations; and the delay or failure to receive board, ATB Financial or regulatory approvals, including any approvals of the TSX Venture Exchange, as applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Westleaf assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
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SOURCE Westleaf Inc.