Delta 9 (DN) Secures British Columbia Supply Deal

Delta 9 Cannabis Inc. has secured an agreement to supply the British Columbia Liquor Distribution Branch with cannabis for the province’s recreational market.

It marks the fourth province that Delta 9 supplies, following similar deals covering Alberta, Saskatchewan, and Manitoba. It will begin shipping a range of adult-use products to B.C. in Q4 2019, and it is in talks with other provinces, territories, and private retail outlets in a bid to tie up additional supply agreements over the rest of the year.

“As we ramp up our overall production capacity in 2019 and 2020, we will continue to seek additional distribution contracts for our cannabis products in Eastern markets,” said chief executive John Arbuthnot, who set up Winnipeg-based Delta 9 along with his father, Bill, in 2012.

The firm is a vertically integrated cannabis producer with various sources of revenue. It cultivates cannabis and wholesales products to provincial distributors and licensed producers like Auxly and Canopy Growth Corp. It also supplies grow pods – modular, stackable, retrofitted shipping containers – and packaged genetics to fellow producers, while offering consultancy services to smaller businesses.

Delta 9 is also building up an estate of its own cannabis retail stores. It has two outlets in Winnipeg, one in Brandon and one in Thompson, taking its total to four in its home province of Manitoba.

Last month it agreed to buy two cannabis stores in Alberta from Modern Leaf Group in a deal worth $1.3 million. That will take its retail estate to six, and it is actively looking to increase this number as quickly as possible, according to Arbuthnot.

On Sep. 3, 2019, it achieved an uplisting to the TSX. Since then its share price has decreased from $0.98 to $0.63.

In Q1 2019 it saw revenue increase to $7.6 million, with a gross profit of $2 million. Operating expenses came to $14.2 million and its overall net loss was $8.5 million. Earlier this year it completed a bought deal financing with a syndicate of underwriters for 12,000 convertible debenture units at a price of $1,000 for gross proceeds of $12 million.

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Martin Green
Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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