Canadian producer Avant Brands Inc. (TSX: AVNT) (OTCQX: AVTBF) painted a rosy outlook for 2023 in its latest corporate update to investors.
The company expects the 185,000 square-foot production facility in Kelowna, British Columbia, that the company successfully won in a bid last month, to increase the company’s production capabilities by approximately 60%.
That “has the potential to make Avant one of the largest indoor producers of high-quality cannabis in Canada,” the company said in the announcement.
While the facility remains fully operational, Avant expects to make certain modifications to production processes to align cultivation methodologies.
The Vernon, BC flagship production facility
Avant also expects “meaningful cash flows over the course of the 2023 fiscal year” from its acquisition of the remaining 50% equity stake in 3PL Ventures Inc., which it agreed to last month. The deal will provide its wholly owned subsidiary, GreenTec Holdings Ltd., with full ownership of the 3PL Facility.
With the buyout of 3PL, Avant will eliminate the $12 million shareholder loan owed to the noncontrolling shareholder, F-20 Developments Corp. F-20 had first priority to receive the majority of 3PL’s operating free cash flow in order to repay this loan.
Upon closing of the acquisitions, Avant’s strategic objectives and outlook for the 2023 year include:
- Increasing production through the Flowr facility and the 3PL Facility.
- Implementing modifications to the Flowr facility.
- Fulfilling all provincial government purchase orders and export demand.
- Exploring new global markets for exporting product, leveraging the company’s reputation in existing markets, such as Israel and Australia.
- Launching new cultivars.
- Reduce the company’s overall cost of production.
- Continuing to explore contract growing or acquisition opportunities to the extent that the acquisition of Flowr Okanagan does not completely fulfill unmet customer demand.
Avant had approximately $7 million in cash as of Nov. 3o, 2022, with no interest-bearing debt on the balance sheet.
As of the Wednesday news release, the company has approximately $6.9 million in cash to continue to fund this expected growth.