JWC generates record revenue in October following product portfolio restructuring and operational overhaul
TFC is actively pursuing strategic and accretive acquisitions to leverage JWC platform
Cresco loan sold at par value for net proceeds of CAD$2.6 million, additional CAD$3.1 million of loans to be repaid in November
TORONTO, ON / ACCESSWIRE / November 5, 2020 / Trichome Financial Corp. (the "Company" or "Trichome Financial") (CSE:TFC) is pleased to announce an update on the operations of Trichome JWC Acquisition Corp. ("TJAC" or "JWC") and on recent activity in its loan portfolio.
"Trichome Financial's business model has always been to seek the best risk-adjusted returns in the cannabis sector on the capital entrusted to us by our shareholders. In the first two years of Trichome Financial's existence, this meant providing secured loans against quality assets given elevated equity valuations during that period. Over the last 18 months the market has changed materially as valuations are a fraction of what they were while clear data points underscore ongoing industry rationalization and positive sales trajectory. Today we believe that the best risk-adjusted returns are found in the acquisition of quality assets, some in need of restructuring, that can be acquired at very attractive prices. Target opportunities include those companies with defensible products and brands with solid revenue and cash flow trajectory, and where operations can be optimized through a focused business plan and integration with the JWC platform. Above all else, we are focused on prudent allocation of capital in order to maximize the value of the Company for shareholders and stakeholders," said Michael Ruscetta, Chief Executive Officer of Trichome Financial.
JWC Highlights and Operating Plan
"We couldn't be more pleased with the changes occurring in all areas of JWC. Individuals have come together working in teams to help each other achieve the goals set before us. I'm proud to say that we have an amazing group of people with shared values who are working tirelessly to ensure we succeed," said Howard Steinberg, CEO of JWC.
The majority of JWC's products were on regulatory hold with Health Canada until the end of September, preventing new purchase orders during that time. Since then, JWC has quickly achieved many key operational milestones:
- Through the restructuring of the existing dry flower and concentrates portfolio, as well as improved product quality, JWC generated record October purchase orders with visibility on continued revenue growth through accelerating rate-of-sales.
- "Customer focused, consumer obsessed" go-to-market strategy with necessary realignment of organizational resources and data-driven decision making.
- Less than two months following license approval, secured new product listings in Ontario, Saskatchewan, and New Brunswick with near-term listings expected in British Columbia, Manitoba, and Alberta, all of which will continue revenue momentum.
- Cultivation operations overhauled with a focus on high demand offerings in recreational and B2B markets, predominantly driven by +20% THC levels.
- Rollout of various high-quality, indoor hash products with THC levels above 36% prior to the end of 2020.
- Successful introduction of new genetics, many of which are award winners and coveted in U.S. markets, currently on track for commercial release with a JWC brand re-launch in Q1 2021.
- On target to achieve cash flow breakeven by the end of Q1 2021 based on the reduction of expenses and significant ramp up of sales driven by new strains and SKUs, cross country market access, and a data-driven customer-centric go-to-market strategy.
Loan Portfolio Update
On October 30, 2020, the Company completed the sale of its loan with Cresco Labs, Inc. (CSE:CL) to an unrelated third party for proceeds of US$1.98 million or CAD$2.61 million, representing the par value of the loan. The Company's loan portfolio currently has a face value of approximately $8.78 million and all loans remain in good standing, with principal repayments of $3.08 million due this month. As these loans are repaid, Trichome Financial will use the proceeds to fund additional acquisitions and to meet working capital needs.
About Trichome Financial Corp.
Trichome Financial is a specialty finance company focused on providing flexible and creative capital solutions to the global legal cannabis market. Trichome was created to address the lack of credit availability in the large, growing and increasingly complex cannabis market. Trichome Financial's experienced founders and management team have a unique edge to capitalize on proprietary deal flow and industry insight in order to drive the best risk-adjusted returns on shareholder's capital. With the recent acquisition of the assets of James E. Wagner Cultivation Corp., Trichome Financial is focused on acquiring related assets to compliment JWC and leverage the knowledge, expertise and insights of its employees, management and founders.
For further information about Trichome Financial please visit us at www.trichomefinancial.com or @trichomefinance on Twitter and refer to the joint information circular of Trichome Financial and 22 Capital dated May 29, 2019 which is available on the Company's SEDAR profile at www.sedar.com.
READER ADVISORY
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things: securing new listings with provincial distributors, the launch of new genetics, achieving cash flow breakeven in Q1 2021, and the prospect of JWC as a platform for consolidation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Trichome Financial assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Contact Information
Michael Ruscetta, CEO
Telephone: (416) 467-5229
Email: [email protected]
Marc Charbin, Investor Relations
Telephone: (416) 467-5229
Email: [email protected]
SOURCE: Trichome Financial Corp