TORONTO--(BUSINESS WIRE)--Halo Labs Inc. ("Halo" or the "Company") (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce that retail sales of the Company’s Hush™ branded products have been have been growing in the state of California. In addition progress has been made on other initiatives in California.
Wholesale Dispensary Sales
Cannabis sales have stalled in California during the COVID-19 pandemic. According to BDS Analytics, in April 2020, cannabis sales for state licensed retailers and delivery services reached $252 million, declining by nine percent from the trailing month and growing four percent compared to April 2019. Concentrate sales were $78.1 million, down 9.9% from April 2019. Marijuana Business Daily postulates that while not affected by tourism, the nascent legal California market is dealing with high prices, an entrenched black market, and lack of retail stores1. Despite the flat overall trend and downward category trend, Hush™ vape cartridges have been growing rapidly with unaudited wholesale sales in April of $298,000. Unaudited May 2020 wholesale sales of Hush™ branded products were $417,0002.
Furthermore the Company anticipates this growth rate will be sustained as the California menu expands, the Company penetrates more stores, and onboards additional sales reps to the team. Halo has quadrupled the team and plans to launch one, ten, and twenty piece gummy varieties with multiple flavors and infused pre-rolls before the end of Q3 2020. Halo is supporting further brand recognition initiatives through its inclusion on Weedmaps and is targeting becoming a top 20 cannabis brands across the state of California by Q4 2020. Halo is in 75 of approximately 600 dispensaries statewide meaning there is ample runway to grow.
Kiran Sidhu, CEO and Co-Founder of Halo stated, “With high unemployment in the United States, I believe consumers are flocking to affordable products. Hush is the product line that brings value to the people.” He continued, “We are focused on growing our market share in California by expanding Hush™ branded cartridges, launching our edibles and tincture product offerings to include recreational focused gummies, mints, syrup and chocolates, and a terpene enhanced gram pre-roll line.”
Andreas Met, COO and Co-Founder commented, “We are thrilled at the progress made expanding our California sales team from two to eight individuals in the last six weeks. At the current expansion rate, and with the launch of more value-based product lines, we hope that Hush will be on of the top cannabis brands in California sales-wise by the end of August. It’s an exciting time for Halo Labs.”
Super Filtration Update
The Company has had success with Super Filtration and is progressing towards full commercialization, having yielded 35,000 grams of distillate from previously unsaleable product. The Company plans to use Super filtered distillate to power Hush™ vape cartridges and edibles. If successful, the Company anticipates that its Super Filtration capabilities will help establish Halo as a low cost producer by enabling the Company to make distillate from by-product of previously written off inventory.
NoHo Dispensary Acquisition Update
Closing of the Company’s previously announced and proposed acquisition of 662/3% LKJ11 LLC (“LKJ”), the winning applicant for the proposed North Hollywood dispensary, is expected to occur prior to the end of June 2020. In furtherance of completing the acquisition, the Department of Cannabis Regulation (the “DCR”) in Los Angeles has initiated the ownership transfer and added Mr. Met and Mr. Sidhu to the approved applicant’s profile in the online portal. This reflects the DCR’s recognition that Halo will be the new majority owner of LKJ.
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows and extracts and processes quality cannabis flower, oils, and concentrates and has sold over 5 million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products and now via verticalization in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, the Company entered into binding agreements to acquire a dispensary in Los Angeles, 3 KushBar branded dispensaries, 5 development permits in Alberta Canada, and Canmart Limited which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada while having an international presence in Lesotho within a planned 200-hectare cultivation zone via Bophelo Bioscience & Wellness (Pty) Ltd. as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but are not limited to, statements about the sale and distribution of Halo’s products in California.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: unexpected costs or delays in the completion of the Company's proposed dispensaries and other operation; negative results experienced by the Company as a result of general economic conditions or the ongoing COVID-19 pandemic; delays in the ability of the Company to obtain certain regulatory approvals; unforeseen delays or costs in the completion of the Company's construction projects; adverse changes to demand for cannabis products; ongoing projects by competitors that may impact the relative size of the Company’s growing operation; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; increasing costs of compliance with extensive government regulation; changes in general economic, business and political conditions, including changes in the financial markets; risks related to licensing, including the ability to obtain the requisite licenses or renew existing licenses for the Company's proposed operations; dependence upon third party service providers, skilled labor and other key inputs; and the other risks disclosed in the Company's annual information form dated April 16, 2020 and available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
This press release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for the first four months of 2020 and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements” above and assumptions with respect to market conditions, pricing, and demand. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading " Cautionary Note Regarding Forward-Looking Information and Statements”" above, it should not be relied on as necessarily indicative of future results.
2 These preliminary and unaudited financial results are subject to customary financial statement procedures by the Company and its auditors. Actual results could be affected by subsequent events or determinations. While the Company believes there is a reasonable basis for these preliminary financial results, the results involve known and unknown risks and uncertainties that may cause actual results to differ materially. These preliminary fiscal results represent forward-looking information. See "Cautionary Note Regarding Forward-Looking Information and Statements."