The Green Organic Dutchman Gains Health Canada Approval for Hamilton Site

The Green Organic Dutchman [stock_market_widget type="inline" template="generic" color="default" assets="TGOD.TO" markup="(TSX: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] has secured Health Canada approval to begin cultivating cannabis at its innovative hybrid greenhouse in Hamilton, Ontario.

The 123,000 sq. ft. facility is the result of years of research and development, and it features cutting-edge climate control and water recapture systems. It will yield 17,500 kg of organic cannabis on an annualized basis, while the company is seeking GMP certification to allow for global exports.

“We are thrilled to start using this purpose-built hybrid greenhouse as we ramp up our production of premium organic cannabis, an underserved segment of the market,” said chief executive Brian Athaide.

The facility is said to have a better environmental footprint and create significantly less waste than the average cultivation site, while producing clean, safe, and non-irradiated cannabis.

TGOD delivered its Q2 financials last month and some investors were disappointed by the results, although they can take comfort from the firm’s strong operational execution. Greenhouse construction is progressing well, cultivation of premium, organic cannabis is ramping up and it is edging towards its target of achieving positive cash flow generation by Q1 2020.

The company posted Q2 revenue of $2.9 million, a 20% increase on Q1, but net loss widened to $16.4 million, up from $9 million during the same period in 2018. That sent its share price plummeting by 15.5%, but it has been steadily increasing since then.

Phase one of its Valleyfield site is almost complete, and Health Canada’s decision regarding the Hamilton greenhouse has given it a significant boost. It is projecting sales of 2.500 kg in Q4 2019, and then 6,000 kg in Q1 2020.

It could break even if it made a $3 profit per gram on 6,000kg of sales, based on its current costs. That would be an 11% premium to the market average, but TGOD is focused on premium, organic cannabis and it should be able to justify a higher price bracket.

TGOD has also submitted an application to list its common shares on the NASDAQ.

 

The Green Organic Dutchman is a market awareness client of Capital 10X.

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TGOD was a market awareness client of Capital 10X.

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 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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