OREGON: Golden Leaf Holdings Ltd. (“GLH” or the “Company”) (CSE: GLH), a leading cannabis oil solutions company built around recognized brands, today announced preliminary revenue results for Q2 2016 and June 2016 for the respective brands of the company in Oregon and strategic partner BMF Washington.
GLH Oregon Revenue Overview
Preliminary results show that GLH generated US$3,011,000 in estimated and unaudited revenue for Q2 2016 as compared to unaudited revenue of US$2,476,688 for Q1 2016, representing a quarter over quarter increase of 21.5%.
The Company posted preliminary results for June 2016 showing UD$923,000 in estimated and unaudited revenue as compared to US$1,067,000 (updated and revised from previously published number) in May 2016, representing a month over month decrease of 13.5%. GLH sold all of the products that it produced in the month of June.
GLH experienced lower than anticipated revenue in June 2016 due to a variety of unexpected challenges. The Company is developing plans to address these variables as shown below:
|Production obstacles, including cash constraints that impacted trim and flower purchases, trim quality issues and product testing delays from 3rd party vendors made it more challenging to source material inputs and produce product in a timely manner.||GLH is leveraging cash from current convertible debenture funding to fulfill raw material requirements. The Company has developed a strategic trim supply agreement program focused on contracting with selected farmers to obtain low cost supply of high quality flower and trim with specific strain and genetic characteristics. GLH purchased new testing equipment to ensure the quality of trim and efficiency of testing timelines. The Company is building relationships with testing vendors to effectively manage testing bottlenecks.|
|The Oregon cannabis market saw slower than expected recreational consumer adoption of oils and extracts.||The concept of using a vape pen for delivery and usage of marijuana is still relatively new for the average recreational user. The Company is working with dispensaries to provide merchandising tools that educate the consumer on the benefits of cannabis oil and new delivery systems.|
|The retail buying process at medical marijuana dispensaries, including effective purchasing and supply chain management is still evolving. Not all dispensaries stocked the appropriate inventory to meet new recreational consumer demand.||Dispensaries are becoming more familiar with customers buying behavior, but room for improvement exists with raising the level of sophistication as it relates to inventory management and regular purchasing patterns. GLH is working closely with dispensary customers to help manage stock levels and ordering cycles.|
Don Robinson, Chief Executive Officer of GLH, commented, “While June 2016 Oregon sales results were lower than expected, we were encouraged by the strong sell through of all available inventory produced. We were also pleased with the positive consumer response to the relaunch of the Golden brand and the new product launch of Private Stash. Our sales and marketing team worked with dispensaries across the state to not only introduce new products but new merchandising tools that elevated the consumers’ shopping experience and increased brand awareness.”
BMF Washington Revenue Overview
Preliminary results show that BMF generated US$1,370,445 in estimated and unaudited revenue for Q2 2016 as compared to unaudited revenue of US$904,359 for Q1 2016, representing a quarter over quarter increase of 51.5%. BMF’s June 2016 unaudited and estimated revenue in Washington state was US$537,880, a month over month increase of 13% from May 2016 of US$475,457.