The Green Organic Dutchman Archives - Green Market Report

Debra BorchardtOctober 19, 2022
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4min69520

The Green Organic Dutchman (OTC: TGODF) shares popped on the news that it bought privately owned Canadian-based BZAM Holdings (BZAM) in an all-stock deal. BZAM shareholders will end up holding roughly 49.5% of the combined company. The deal is expected to close on Nov. 8, 2022.  Shares jumped by 30% to sell at roughly six and half cents.

The combined company is estimated to be the sixth-largest Canadian cannabis company based on June to August 2022 retail sales. Together, the combined company forecasts net revenue of at least $100 million for the calendar year 2023 and adjusted EBITDA positive by mid-2023.

TGOD and BZAM generated $30.2 million and $32.2 million, respectively, of net revenue in calendar 2021, and $31.6 million and $32.7 million, respectively, of net revenue from January to September 2022. The combined company generated $85.7 million pro forma unaudited net revenue for the 12 months leading to September 2022. BZAM and TGOD said in a statement that they have experienced one of the fastest growth rates in the Canadian cannabis market.

BZAM’s current Chief Executive Officer Matt Milich, and Chief Commercial Officer Jordan Winnett, will lead the company, along with TGOD’s current CEO and Interim Chief Financial Officer, Sean Bovingdon, who will take the role of CFO. The board of directors will consist of seven members including five members from TGOD’s existing board of directors, and two members nominated by BZAM.

“This is an exciting day for both companies, for our employees, and for our consumers. We are bringing together two rapidly growing companies that share a passion for cultivation, innovation, and brand development,” said Bovingdon. “Our highly complementary businesses in terms of production footprints, products and distribution networks create a Combined Entity with a leading branded product portfolio along with significant synergies across our operations.”

BZAM Cannabis is a multi-licensed Canadian cannabis producer focused on branded consumer goods, cultivation, processing, and people. The BZAM Cannabis family includes core recreational cannabis brands BZAM, -ness and TABLE TOP, and partner brands Dunn Cannabis, FRESH, SuperFlower, and Snackbar. The company operates facilities in the Lower Mainland, West Kootenay, and Vancouver Island in British Columbia. Its sister companies operate facilities in Edmonton, Alberta, as well as a retail BZAM store in Winnipeg, Manitoba and Regina, Saskatchewan.

The merged companies will have local production presence in the largest provinces, and over 400 listed SKUs across Canada. The combined company’s facilities are right-sized to demand without the need for material capital expenditure. The facilities offer complete, scalable capabilities for the Combined Entity’s broad range of cannabis products.

“We are looking forward to bringing together TGOD’s organic flower and hash with our crowd pleasing vapes and the exceptional flower of our craft partners, including Dunn Cannabis and FRESH,” added Milich. “Together, we expect to expand on what we have each accomplished so far, as we build a strong, EBITDA-positive cannabis company.”


Debra BorchardtApril 6, 2022
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5min1080

Long after the markets closed on the east coast, The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (OTC: TGODF) delivered its financial results for the fourth quarter ending December 31, 2021, and for the full-year 2021. The Green Organic Dutchman reported revenues rose 46% to $11 million in the quarter over last year’s $3.4 million for the same time period. It was a sequential increase of 27%.

The Adjusted EBITDA loss was $3.31 million for the quarter, representing a 40% improvement compared to the third quarter, and was $22.60 million for the Fiscal Year being a 35% improvement of $11.93 million over 2020. The loss from operations for TGOD in the quarter was $5.67 million, an improvement of $3.48 million over the third quarter. Losses from operations were $28.74 million for the Fiscal Year 2021, compared to $40.96 million for the same period in the prior year primarily due to the improvement in revenues and reduction of G&A expenses.

Full-Year Results

For the full year of 2021, TGOD reported revenue rose 146% to $39 million versus 2020’s $15.7 million. The net loss for the year was $43.5 million.

“We closed 2021 with strong momentum as we saw significant growth quarter-over-quarter, reflecting continued execution of our strategic plan as we remain focused on quality, consistency and transparency. We are seeing the early benefit of our enhanced sales strategy which has accelerated sell-through. Our two-prong approach of onboarding key retail chains while having boots on the ground with our dedicated sales force is starting to bear fruit,” said Sean Bovingdon, CEO of TGOD. “We are on track to hit our positive Adjusted EBITDA target in Q2 2022, with continued monthly sales progression from the strong month of December,” added Bovingdon.

Going Concern

The company’s auditors did note that the net loss from operations was $42 million for the year and the accumulated deficit was $487 million. The filing stated, “The Company used cash in operating activities of $18 million (year ended December 31, 2020 – $35 million) resulting primarily from the loss from operations $28 million (year ended December 31, 2020 – $40 million) offset by items not affecting cash such as depreciation, amortization and share-based compensation. The company has insufficient cash on hand to fund its planned operations. The company’s ability to continue as a going concern is dependent upon its ability to generate sufficient revenues and positive cash flows from its operating activities and/or obtain sufficient funding to meet its obligations.”

As of December 31, 2021, the company said it had positive working capital of $25.72 million (December 31, 2020 – $22.0 million negative working capital) primarily due to the repayment of its senior secured first-lien credit facility, modifying its debt under its secured revolving facility to amend the maturity date to June 2023, and reducing accounts payable with the funds received from the Revolver Loan, ATM equity financings and warrant exercises in 2021. The total consolidated cash position was $4.31 million including $0.22 million of restricted cash (December 31, 2020 – $11.83 million of which $0.62 million was restricted cash).


StaffNovember 26, 2021
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4min42080

After the market closed the day before the Thanksgiving holiday, The Green Organic Dutchman  (CSE: TGOD) (US-OTC: TGODF)delivered its unaudited interim financial results for the third quarter ending September 30, 2021, with revenue rising 160% to C$8.6 million from last year’s C$3.3 million. Revenue only increased by 1% sequentially from the second quarter. TGOD also reported a net loss of C$13.9 million for the quarter versus C$75 million for the same period during the prior year. This also represents an improvement of C$18 million of losses from continuing operations since the second quarter where the company recorded a loss from continuing operations of C$32 million.

“We continue to execute on our plan and this management team is working hard to bring the company to profitability with many strategic initiatives”, commented Sean Bovingdon, CEO and interim CFO of TGOD. “TGOD continued at its prior quarter pace as stores worked through inventory loaded in Q2 and new retail distribution points continue to be established. Most notably, the Company launched its Sativa products in Ontario in October 2021 to add one of its top-selling products to the country’s largest retail distribution network, and strategically partnering with Acosta’s direct sales force provides the Company with the opportunity to double our existing distribution footprint quicker than before. Along with the continued support of our lender, selling HemPoland is expected to provide the short-term liquidity to bridge the company to positive operating cash flow in early 2022,” added Bovingdon.

TGOD said it expects to close the sale of HemPoland within the coming months, bringing in expected net proceeds of C$8.3 million (the expected gross proceeds are C$14.54 million, before repaying an approximate C$5.54 million loan between the parent company and the subsidiary and expected transaction costs). Once that happens, TGOD said it plans to repay $4 million of the term portion of the Revolver Loan. The company also said that the remaining proceeds of the sale would provide significant cash and working capital to fund the continued growth and operations of the Canadian business.

Following the close of the quarter, TGOD acquired Galaxie for approximately $21 million. The company said that Galaxie is focused on product innovation, branding, and manufacturing 2.0 products. Galaxie creates and produces a range of products including premium cannabis edibles, infused pre-rolls, flavored and full melt vapes, oils, and solventless products. It also provides manufacturing and product development services to partners across Canada.

“Integrating Galaxie and TGOD will allow for significant efficiencies in the supply chain along with additional sales licence penetration in markets that are complementary to TGOD. Looking to 2022, we expect that key product launches for both TGOD and Galaxie will be key catalysts to grow revenues. Each strategic initiative successfully achieved allows the Company to differentiate itself and we are eager to grow our market share,” said Angus Footman, Chairman of the TGOD Board of Directors.


Kaitlin DomangueJuly 15, 2021
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4min1180

It’s time for your Daily Hit of cannabis financial news for July 15th, 2021. 

On the Site 

Harvest Health Leaves Oregon, Expands Florida Footprint 

Harvest Health & Recreation Inc.  (OTCQX: HRVSF) is done with Utah and expanding its Florida footprint. Harvest said it had completed the divestiture of its cultivation and processing operations in Utah for what it described as an immaterial amount of cash. 

The company said that a local operator bought the cultivation and processing operations located in Ogden, Utah. Following the sale, Harvest no longer has operations in Utah.

The Valens Company Sees Q2 Revenue Increase 

After the markets closed on Wednesday, The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) delivered its second-quarter financial results ending May 31, 2021. Valens reported that its revenue increased 16.1% to $20.5 million versus $17.6 million in the second quarter of 2020. The net loss was $8.6 million in the quarter versus $3.5 million for the same time period in 2020. 

Timbaland, Nas Invest In Cannabis Company Pure Beauty

California-based boutique cannabis brand Pure Beauty reported it has successfully raised $5 million in convertible note fundraising from a consortium of investors led by Gron Ventures, Subversive Capital, Ceres Group Holdings, and notable celebrities including Timbaland, Nas, and director Tom Kuntz, among others.

SAFE Banking Is NOT About Rich People Getting Rich

Despite some chatter, SAFE Banking is not about rich people getting rich. The SAFE Banking Act would address the lack of safety in the cannabis space, as well as provide a pathway for cannabis businesses to establish banking relationships. 

Psychedelic Fund Palo Santo Launches With $35 Million

U.S.-based psychedelic investment fund Palo Santo, has launched with an initial $35 million in capital raised and an active portfolio of 20 companies. The diversified venture fund said in a statement that it is focused on tackling the growing global mental health crisis by investing in innovative psychedelic-based and adjacent therapies that are poised to shape the future of psychiatry and fields beyond.

 

In Other News

Green Organic Dutchman Announces Q2 Revenue 

The Green Organic Dutchman (TSX: TGOD) (US: TGODF) announced their preliminary unaudited revenue for the second quarter. The company achieved $11.7 million in preliminary unaudited revenue, representing a quarter-over-quarter revenue increase of 30% and a year-over-year 143% increase. 

 

Neptune Reports Q4 Results 

Canadian cannabinoid extraction company, Neptune,  announced fourth quarter results this afternoon. (TSX: NEPT) The company reported $6.8 million in revenue, representing a 127% increase from the third quarter. 

Neptune reported a fourth quarter gross profit loss of $24.8 million, compared to the profit loss of $1.1 million during the same period in 2020. 

Reported fourth quarter gross profit loss of $24.8 million compared to a reported gross profit loss of $1.1 million in the comparable period in fiscal 2020 and reported fiscal year 2021 gross profit loss of $36.2 million compared to a gross profit loss of $1.8 million for the fiscal year 2020.


Debra BorchardtMay 13, 2021
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4min860

After the close on Wednesday, The Green Organic Dutchman Holdings Ltd.  (TSX: TGOD) (US: TGODF) reported its unaudited interim financial results for the first quarter ending March 31, 2021. TGOD said its revenue increased 194% year over year to $8.98 million. However revenues decreased 18% sequentially to $10.92 million. The stock was falling by almost 5% to lately sell at 27 cents. 

The company blamed the decline on store restrictions and stay-at-home orders related to COVID-19, combined with some provincial listing mandates being revised at the start of the year. TGOD said it expects growth to rebound for the remainder of 2021 with restrictions anticipated to be lifted as vaccination rates increase and retail stores reopen.

TGOD went on to say that the decrease appears to be within the range of what has been observed and reported by many peer companies to date in 2021. The company still delivered a net income of $12.46 million for the quarter versus a loss of $73.44 million for the same period during the prior year, comprised primarily of the reversal of impairment, and a loss from operations of $5.89 million. On a per-share basis, TGOD recorded a net income of $0.02 compared to a loss of $(0.23) for Q1-2020 and $(0.05) for Q4-2020.

“This quarter’s improving financials demonstrate how we are strengthening TGOD’s foundations by executing our turnaround plan. From monetizing under-utilized assets to streamlining our organizational structure and strengthening our balance sheet, our new leadership team is making great strides towards completing the transformation of TGOD into a profitable and agile organic cannabis producer that stands to benefit from accelerated growth in Canada and abroad with opportunities in GermanyMexicoAustralia, and the United States,” commented Sean Bovingdon, TGOD’s CEO and Interim CFO. “The achievement of net income reflects the positive outlook for our cashflows in relation to our right-sized operations. We look forward to the potential lifting of COVID restrictions as vaccinations increase, which will allow for better access for consumers to our organically grown quality products, that are now consistently achieving THC levels greater than 20%.”

While the company seems to be turning a corner as revenues have mostly risen over last year, the company is still restructuring as it sells assets. On April 29, TGOD provided an update on the potential sale of its Valleyfield Quebec Facility, stating that it had received multiple viable bids. Management said it is currently working through the details of the bids and anticipate  closing by the end of June 2021. The company also recorded a net non-cash reversal of previous impairment of $21.81 million triggered by its Quebec Facility being classified as assets held for sale.

TGOD has also said it may sell or spin-off for an Initial Public Offering of HemPoland, its wholly owned subsidiary, for which it has retained Canaccord Genuity as an advisor, and the potential for mergers and acquisitions in the Canadian cannabis LP sector.


Debra BorchardtMarch 10, 2021
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6min750

The Green Organic Dutchman Holdings Ltd.  (OTC: TGODF) reports its results after the market close on Tuesday for the fourth quarter and fiscal year ended December 31, 2020. In the fourth-quarter, TGOD said its revenues increased 236% to $10.92 million versus $3.25 million in Q4-2019. This was also a 91% increase over the third-quarter revenue of $5.71 million. The Green Organic Dutchman fourth-quarter net loss improved to $23.68 million versus $144.75 million for the same period in 2019. The company attributed it to a loss from operations and a write-down of $8.65 million in goodwill related to HemPoland.

Annual revenue for fiscal 2020 was $24.51 million versus $11.16 million for 2019. The net loss for the year was $183 million. The company said that the loss was due to a non-cash impairment charge of $120 million on the Canadian cash-generating unit. “The non-cash impairment charges recognized during the period are primarily attributable to the changes in the timing of accessing market demand, as a result of various factors including regulatory changes, production and supply chain impediments, COVID-19 impacts on retail store openings, and, sales price compression across the industry, resulting in a slower revenue ramp-up and growth than originally forecasted by management.”

Lowered Sales Forecast Outlined

In February, TGOD also lowered its estimates for revenues in 2021. The revised Canadian cash flow forecast, from November 1, 2020 to October 31, 2021, assumed that it would achieve $40 million in net sales over the 12-month period versus the $61.5 million previously forecast in the Base Shelf Prospectus. The reasons for the decline were listed below:

  • The company’s forecast assumes between 5% and20% of price compression into 2021 across its various product lines.
  • Pandemic restrictions reduced order levels for the first quarter of 2021. The company believes these measures will hamper the rate of revenue growth in Canada that was expected in the first half of 2021 and impact the timing of market penetration for its new sativa strains and some cannabis 2.0 products.
  • the sales volume forecast consists primarily of product mix premium flower, mainstream Highly Dutch flower, and 2.0 products expected to be sold and includes hash sales, which mix has shifted towards proportionately more mainstream Highly Dutch products that have a lower margin.
  • The company’s latest forecast further reflects the shift in its medical business from sales to patients directly to medical wholesaling, such as the company’s distribution agreement with Medical Cannabis by Shoppers Drug Mart. Medical wholesale generates narrower gross margins compared to direct patient sales.

Permanent CEO Named

The company appointed Sean Bovingdon as Chief Executive Officer (CEO), and member of the board, effective immediately. Mr. Bovingdon had previously been appointed as Interim CEO in November 2020 while continuing to serve as CFO. He will continue as interim CFO while the company undertakes a search for a permanent Chief Financial Officer.

“Sean has been very effective in leading the company through these extremely challenging past few months. He stepped into the interim-CEO position and has demonstrated outstanding leadership,” stated Jeff Scott, Chairman of the board. “Sean has the strategic vision and experience to effectively guide TGOD through its next phase of growth. On behalf of the board of directors, I am very pleased to appoint Sean as CEO of the company.”
Quebec Facility Disaster
The company also said it was seeking to monetize the underutilized assets at its Quebec Facility and had retained the services of a commercial real estate advisor to identify potential buyers for the site, focused on the state-of-the-art hybrid main greenhouse. The transaction could result in a complete or partial sale of the site. The company said it remains committed to maintaining a significant portion of its operations, including all 2.0 product manufacturing, in Quebec, either at a portion of the Quebec Facility or at an alternative Quebec site. The company spent millions building the Valleyfield Quebec facility only to be faced with unloading it as it downsizes.

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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