MJardin Group, Inc. (OTCQX: MJARF) reported results for its fourth quarter and fiscal year ending December 31, 2019, with revenue falling to $26.7 million versus $27.5 million in 2018. In addition to the drop in revenue, MJardin delivered a 2019 net loss of $267.5 million versus $81.4 million in 2018. This loss included a $207 million impairment related to goodwill, intangibles, PP&E and a principal promissory note in 2019 and $21 million in 2018
“When I stepped into the role of CEO, MJardin was in a state of transition. Since I have endeavored to place this business on a strong footing to succeed going forward, by narrowing the focus of operations and doubling-down on our core competencies, namely, the cultivation of high-quality and high THC cannabis,” said Pat Witcher, CEO of MJardin Group, Inc. “With construction completed at the majority of the Canadian facilities and right-sized operations, we are well-positioned to focus on a strong entry to the Canadian recreational market in the second half of 2020 and turn the corner as a business.”
The company scaled back most of its U.S. commitments as it terminated the Cannabella acquisition and sold GreenMart of Nevada. The company said that it still sees the United States as a desirable growth market and will continue to pursue strategic joint ventures, acquisitions, or consulting arrangements in select States on a case-by-case basis. The company has $146 million in total debt and the sale of the GreenMart business, also called Cheyenne, will contribute $30 million towards that debt. Harvest Health & Recreation purchased the business from MJardin.
“For the past six months, I have been focused on addressing and ultimately improving the Company’s internal processes and financial reporting. Now that the Company has unwound historically unprofitable commitments, I will continue to focus on increasing transparency to our investors while working with Pat to continue stabilizing our operations and positioning MJardin for growth as we push forward towards delivering on the promise and value of our current asset base,” said Edward Jonasson, CFO of MJardin Group Inc.
MJardin said it will focus on its high THC high yielding flower to position the company well for entry into the recreational market in Canada during the second half of 2020. Construction has been completed on the Brampton Ontario (WILL) facility and 10 of the 12 flower rooms have now been licensed by Health Canada. The company said it expects to receive licenses for the remaining two flower rooms imminently. This expansion is expected to result in run-rate production of 3,000 KG per year at the WILL facility during the third quarter of 2020.
Phase 1 of the Cultivation Facility in Lower Sackville, Nova Scotia facility (AMI) operated through a three-way joint-venture between the Nova Scotia Mi’kmaq First Nations (51%), MJardin (39%) and the Halef Group (10%) is fully operational with a run rate production of 3,500 KG per year. During 2019, construction was completed on the Phase 2 expansion, bringing on an additional 2,800 KG per year of capacity with licensing and run-rate production expected by the fourth quarter of 2020.