Maricann Group Inc. Provides Operational Update
TORONTO, ONTARIO–(Marketwired – Sept. 5, 2017) – Maricann Group Inc. (CSE: MARI) (“Maricann” or the “Company”) a low cost, greenhouse producer of medical cannabis with market leading technological differentiation, is providing this operational update. On March 8th, a windstorm with gale forces up to 115 kph hit the peninsula on the shores of Lake Erie near the Company’s Langton, Ontario site. An unusual event, the storm resulted in sand and foreign materials from nearby fields being blown into two of the Company’s five main flowering greenhouses.
In Canada, under Access to Cannabis for Medical Purposes Regulations (ACMPR), all aspects of cultivation must be controlled and no outside matter is permitted to enter the greenhouse unless introduced intentionally and through an approved process. Since the occurrence of the storm, the Company has spent significant time trying to determine the full consequences and impact of the storm. The Company was not immediately aware whether any contaminants had impacted the flowering areas of the greenhouses and it was not until the first harvests were completed from both affected greenhouses that the Company became aware of the remnant presence of trace sand in the trim. The Company also spent several weeks consulting experts in the field to determine whether the flower could still be used for oil production, as that process could potentially eliminate any trace amounts of contamination. The opinions received were mixed and the Company’s Quality Assurance team ultimately determined that it could not definitively state that there was no contamination in the lots that were planted following March 8, notwithstanding that the lots showed no visible contamination when harvested.
With the environment no longer sealed and thus compromised following the storm, Maricann made the decision to destroy all of the plants in the two affected greenhouses which reduced its available inventory,. During the time that inventories were low, the Company purchased limited bulk product from a reputable licensed producer, who, like Maricann, has never had a recall of product. The Company also worked with its patients’ physicians to split prescriptions to other trusted licensed producers until it was again able to supply its own product. Maricann’s shelves are now fully stocked with a wide variety of strains, and our oil inventory is fully available. Since the storm, the affected greenhouses have been steam cleaned, pressurized and inspected by Maricann’s Quality Assurance (QA) team. The Company has worked tirelessly to seal the HVAC system and install additional perimeter safeguards to ensure the greenhouses are not penetrated in the future. Maricann has commenced regular production, achieving exceptional yields of dry flower up to 79 grams per plant, per cycle.
The Company is properly insured to cover the losses in inventory. This natural weather event nevertheless had an effect on its short-term revenue stream. Late last year, Maricann tracked up to C$600,000 revenue per month. As a result of a natural weather event, revenues for the three and six month period ended June 30, 2017 were $661,602 and $1,804,769 as compared to $906,246 and $1,864,019 during the same period in 2016 and the Company has revised the forecast of revenue for 2017 from C$6.7 million to C$4.3 million. The total loss to be borne by the Company as a result of the incident is not yet determined; as it will be reduced by the not yet determined amount of the insurance recovery.
Patient safety is our ultimate concern. We could have attempted to salvage the plants, however, there is no way to ensure that spot contamination didn’t occur. Our commitment to the creation of long term shareholder value surpasses short term profits.
Ben Ward, CEO of Maricann
As we build for a greater future, we’re willing to take the necessary steps to ensure long term shareholder value creation, never putting our shareholders at risk, explaining the near-term ups and downs in share price – tracking to our ultimate goal.
The Company’s financial statements and related management discussion and analysis for the period are available under the Company’s profile on SEDAR at www.sedar.com. All amounts are expressed in Canadian dollars.
About Maricann Group Inc.
Maricann is a vertically integrated producer and distributor of marijuana for medical purposes. The company was founded in 2013 and is based in Toronto with a facility in Langton, Ontario, where it operates a medicinal cannabis cultivation, extraction and distribution business under federal licence from the Government of Canada. Maricann, which has federal licences to cultivate, process and distribute cannabis, services a patient base with more than 8,000 total registered patients since inception. Maricann is currently undertaking an expansion of its cultivation and support facilities in Canada in a fully funded 217,000 sq. ft. (20,159 sq. m) build out, to support existing and future patient growth.
Original press release: http://www.marketwired.com/press-release/maricann-group-inc-provides-operational-update-cse-mari-2232419.htm
