Sproutly Delivers Full Year Results

Sproutly [stock_market_widget type="inline" template="generic" color="default" assets="SPR.CN" markup="(CSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] is gearing up to become a market leader in the Canadian cannabis beverage industry when the market opens up later this year.

Health Canada recently confirmed that it will begin accepting submissions for edibles and other concentrates on Oct. 17, 2019, and the first products can hit shelves 60 days later. Deloitte estimates that edibles will be worth $1.6 billion per year in Canada and beverages will be worth another $569 million.

Sproutly was set up as a cannabis-infused beverage specialist, but it also produces edibles and flower. It has just released its financial results for the year to Feb. 28, 2019, and operational highlights show it putting the pieces in place for a bid to capture a strong share of this new market.

The firm recorded a comprehensive net loss of $12.6 million for the year, due to expenses such as marketing, expanding its operations, and listing fees. Yet it believes it has the right foundation in place to succeed once the market opens up.

Chief executive Keith Dolo called 2018-19 “a defining year” for Sproutly. It closed a $20.7m bought deal financing to fund expansion plans, and it completed an acquisition of Infusion Biosciences Canada and SSM Partners.

This has allowed it to ramp-up production of beverages, edibles, and topicals derived from Sproutly’s technology.

As of Feb. 28, 2019, it had cash of $9.6 million, up from $700,000 the previous year.

“We are now moving into the next phase of operations as we prepare to launch our Caliber premium branded flower, as well as beverages and edibles in line with the proposed regulations recently announced by Health Canada,” said Dolo.

We added that the company is “well positioned” to become a leader in the cannabis-infused product category.

Since Feb. 28, 2019, Sproutly has received a license from Health Canada for wholly-owned subsidiary Toronto Herbal Remedies Inc., formed a joint venture with Moosehead Breweries Ltd. affiliate OCC Holdings, and completed its first sale of bulk cannabis flower in Canada. The sale was made to an unnamed licensed producer.

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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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