TORONTO--(BUSINESS WIRE)--Halo Labs Inc. ("Halo" or the "Company") (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce overall improvement in Oregon’s flower category and flower product related sales. According to BDS Analytics, category sales of flower and pre-rolls have grown at 51% and 56% for the first four months of calendar year 2020 when compared to the same four month period in 2019.
The Company hopes to expand on this category growth, as the 2020 crop is harvested. The Company’s 2019 Oregon harvest yielded 2,546 pounds of flower and 13,364 of biomass for concentrate production, a total yield of 15,910 pounds of cultivated cannabis. In 2020, the Company increased plantings at Evans Creek to approximately 8,000 starts up from 4,000 starts in 2019. In addition, Halo recently has licensed both OG DNA Genetics™ and TerpHogz™ genetics, planting half an acre and one acre respectively of each Company’s strains. Now fully planted as of May 2020, the total outdoor canopy size is 6 acres at Evans Creek. As a result of shifting production towards flower, the Company anticipates harvesting 6,000 pounds of flower and 14,000 pounds of biomass for concentrate manufacturing this year, a total yield of 20,000 pounds of cultivated cannabis which is approximately 2.5 pounds of usable cannabis per plant.
To further bolster flower and pre-roll sales, Halo has been investing in greenhouses at Evans Creek to grow year round. The Company built and currently operates 3,000 square feet of greenhouse and is producing clones for sale. Halo launched clone sales, which have a high gross margin in excess of 80%, to dispensaries this month. By year end the Company intends to build and operate more greenhouses at Evans Creek and plans to have 12,000 square feet total under production for clones, mothers, and incremental flower production by the end of 2020. Flower cultivation from these greenhouses have not been included in the 20,000 pound 2020 harvest estimate.
For the year ended December 31, 2020, estimated Oregon revenue from flower sales are expected to be $2,100,000 due to increased flower yields and a higher price per pound resulting from branded genetics partnerships. The Company anticipates selling half of the harvest at $700 per pound by the end of 2020.
Sales of clones which started in June 2020 are expected to be $500,000. At $10 per clone the Company plans to sell 50,000 units this year which is based on the newly built 3,000 square feet of greenhouse currently in clone production.
Sales from pre-rolls, including infused pre-rolls, are estimated to be $1,000,000. This is due to the anticipated launch of an infused line of pre-rolls in Oregon by the end of Q2 which, according to BDS Analytics, is the fastest growing segment of this category. Approximately 2/3 of the expectation will be due to current pre-rolls which average $5 per unit across various SKUs including multipacks and 1/3 will be due to infused pre-rolls that are projected to sell at a higher price point per unit of $7. The Company expects to sell 48,000 units of infused pre-rolls this year. The current monthly sales of pre-rolls are anticipated to triple by year end as the Company is ramping up pre-roll assembly in order to supply more dispensaries.
In total, the Company is expecting $3,600,000 sales in Oregon from biological asset product categories this year. Usable cannabis from biomass for concentrate production which is estimated to be 14,000 pounds in 2020 and is not included in biological asset product category sales expectations.
“Halo has been focused in expanding its Oregon biological asset portfolio of products to include OG DNA™ and TerpHogz™ branded flower and pre-rolls. The Company has recently launched sales of clones and infused pre-rolls to our dispensary partners. We now are turning our focus to implement similar strategies in California and potentially Nevada. In addition, we are in discussions with other flower brands to license additional genetics and strains for Oregon, California, Nevada and Lesotho,” said Andreas Met, Chief Operating Officer and Co-Founder.
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 Oregon.
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.