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Still canna are tanking! Any clues as to why?
StillCanna has raised over C$30m in equity financing, including a C$24m raise in April 2019. In its most recent financials, the three months ended 31 January 2020, it recorded its first quarterly revenues C$0.23m (from Nexus) and an operating loss of C$2.06m. It reported cash and equivalents of C$6.72m, $1.23m in inventories and is debt free apart from C$0.20m of leases. This therefore gives it little more than 9 months of cash runway at that cash burn rate. As such, its financial statement included a statement that there is material uncertainty that casts significant doubt about the Company’s ability to continue as a going concern.
That said, with the Nexus facility now operational and PES expected to start production in the coming months, and with significant capacity in cultivation and extraction, the company looks like it could trade its way to self-sufficiency within the next six months and with its current cash position. This potentially could then provide headroom in funding to support the combinedgroup with Sativa, especially if cost synergies can be achieved through the combination of the two businesses.
A back of the envelope calculation suggests that the 1500 Ha cultivated by StillCanna in 2019 would theoretically hold over 7 tonnes of CBD (using a conservative CBD yield in flower of c3.5%) which could be extracted in six months. With a wholesale value of over €5/g for traceable compliant EU CBD distillate and isolate, this supply could deliver revenues over €35m this year. Additional revenues could be made by StillCanna by toll processing third-party crop using spare capacity in its Nexus facility as well as from the Premium Extraction Services JV with DragonFly who also has considerable hemp flower in stock to process once fully operational
StillCanna has large cultivation and extraction assets and is on the cusp of significant revenue growth: It is one of Europe’s largest CBD companies with 1500 hectares of hemp cultivated in Poland in 2019 with this expected to grow to 3000Ha in 2020. It has two large extraction facilities based on a proprietary closed loop ethanol-based design with combined capacity to produce up to 29 tonnes of CBD isolate pa. Its wholly owned extraction in Poland has recently started production with the group recording its first revenues in the quarter to January 2020, and its JV facility with DragonFly in Romania recently received its final operating permit and awaiting the lifting of the COVID-19 lockdown before resuming commissioning.
It complements Sativa’s leading position in UK distribution and branding and puts the group in a strong position with regards to Novel Food compliance: both companies share a culture of compliance and the resulting vertically integrated entity will be able to provide full traceability of testing and compliance from seed to sale. Both were already engaged in the process of achieving UK and European FSA Novel food compliance prior to the UK March 2021 deadline. We believe success in the UK by Sativa’s Goodbody brands is likely to help generate demand in other jurisdictions, as well as for wholesale and white label CBD supply.
Attractive deal structure for both sets of shareholders: Based on the current share prices, the resulting group will be 65% owned by Sativa shareholders with Sativa not just bringing branding and distribution in the most important EU CBD market, but also a cannabinoid testing laboratory, as well as medicinal and veterinary cannabinoid asset development. For Sativa, StillCanna brings compliant EU cannabinoid supply at scale, as well as balance sheet strength which, combined with potentially significant third-party CBD sales this year, should see the group well through COVID-19 but potentially also be able to trade to self-sufficiency without further equity funding.
Thanks WM for clarifying things ;-)
StillCanna Begins Hemp Initiative in Poland
Vancouver, British Columbia--(Newsfile Corp. - April 30, 2019) - StillCanna Inc. (CSE: STIL) ("STIL" or the "Company") is pleased to announce it has begun its agricultural initiatives in Poland to farm over 1,500 hectares of its propriety high CBD content hemp varietal.
StillCanna has ordered and anticipates delivery in July of special harvesters and conveyors with proprietary dryers to make the harvest easy and efficient. The high-tech equipment is capable of speeds up to 15km per hour with a special four and a half meter wide cutting device. It's estimated that the Company's 2019 harvest will produce over 16 million grams of pure CBD. As our proprietary strain of hemp has a gestation period of 45 days, the Company is considering planting two crops on a number of its properties to increase its CBD production capabilities for 2020.
The Company anticipates breaking ground in May for its new CBD refinement facility in Poland, which is expected to cost approximately $6 million to complete its development. The facility is designed to have the capacity to initially produce up to 40 million grams of CBD annually with the ability to further build out the facility to increase production as necessary.
"Spring is an exciting time for global agriculture and StillCanna," explained Jason Dussault, Chief Executive Officer of StillCanna. "The expansion of our EU footprint into Poland is yet another milestone in the implementation of our business initiatives. With over 20 years experience in hemp cultivation, we look forward to meeting the ever increasing demand for quality CBD from our fields and facilities."
The Company also announces that it has engaged Native Ads Inc. to provide and manage a comprehensive digital media marketing campaign for the Company.
The Company has entered into an eight week programmatic digital advertising campaign for an approximate cost of one hundred thousand dollars for digital advertising, paid distribution, media buying and content creation. Neither Native Ads nor any of its directors and officers own any securities of the Company.
PRESS RELEASE ACCESSWIRE
Mar. 2, 2020, 04:45 AM
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VANCOUVER, BC / ACCESSWIRE / March 2, 2020 / Stillcanna Inc. (OTC:SCNNF) (CSE:STIL) (FRANKFURT:A2PEWA) ("STIL" or the "Company") Stillcanna has obtained all approvals required to begin commercial operations at its ORIGIN extraction facility in Romania and the Company is pleased to announce the appointment of Mr. Paul van Issum as President of European Operations, effective immediately.
ORIGIN, a joint venture between Stillcanna and Dragonfly Biosciences Ltd. of the UK has received formal endorsement from the Romanian Environmental Protection Agency and Emergency Services Unit. The facility has also received its final operational permit from the town hall of Bailesti Romania. As the operational phase is implemented over the next quarter the Company is expected to begin hiring additional staff and commencing production trials.
Previously, Mr. van Issum was working directly with Mr. Dussault and the Stillcanna management team for more than a year, most recently as a consultant spearheading ORIGIN‘s permit and approval process with various regional and national authorities in Romania. Prior to this, he enjoyed an extensive career as a senior equity capital markets banker. Mr. van Issum is now responsible for the day-to-day operations for all of Stillcanna's European operations.
"With the approvals for our Romanian-based ORIGIN facility in hand, this is the right time to introduce Paul van Issum as our President of European Operations," commented Jason Dussault, CEO Stillcanna. "Paul's efforts in navigating the legal and regulatory frameworks in Romania are a major reason we received the necessary approvals to establish the first fully licensed purpose-built CBD extraction facility in Romania. We have full confidence in Paul's ability to push Stillcanna towards profitability and long-term success moving forward."
"Stillcanna's operations in Poland and Romania leave the Company uniquely positioned in this developing European CBD market," said Mr. van Issum. "I look forward to working with the Stillcanna team to transform this great opportunity into a profitable reality."