- Full-scale cannabis legalization in Canada in October led to a rush of consumer interest and a resultant shortage of supply as the new industry adapts
- The Green Organic Dutchman is improving on its initial commercial crop by building facilities with 195,000 kilograms of annual production capacity
- The company’s reach includes cultivation facilities in Canada and Jamaica, with additional hemp production in Poland
- Vast distribution capabilities spread wide across Canada, Jamaica, Mexico and Europe
Soaring demand for legal cannabis products has strengthened the long-term outlook for cannabis cultivator The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF), which is expanding its production capability as well as its international footprint in a bid to stay abreast of the market’s sweeping tide.
Canada’s nationwide legalization of cannabis in October opened the doors to a huge buying spree by consumers, even as its newly regulated industry struggled to cross the bar into the unknown expanse of legitimate high-quality marijuana production while the black market outlets that the legal industry threatened to extinguish continued to snap up customers unwilling to wait for the new market’s wheels to turn (http://nnw.fm/acNI8).
Legal cannabis retail outlets in Quebec, Manitoba, New Brunswick, British Columbia, Alberta, Nova Scotia and Saskatchewan reported supply shortages in late November, and Khurram Malik, CEO of diversified cannabis company Biome Grow, predicted that supply might only be adequate to meet demand by 2020 or later, according to the Motley Fool (http://nnw.fm/b47rS).
At the forefront of authorized producers, The Green Organic Dutchman dedicated its first commercial crop to a closed “Grower’s Circle” group of patients and investors as a show of loyalty to “those who supported TGOD and those who are most in need of medical cannabis therapy,” according to its third-quarter operations report. At the same time, the company was working to expand its existing 27,000 square feet of production space in Hamilton, Ontario, into an operation that’s expected to ramp-up to nearly 200,000 kilograms of annual capacity across Ontario, Quebec and Jamaica when construction is completed early next year, as well as scalable hemp capacity in Poland.
The company is improving efficiency measures in its existing commercial cultivation while developing five new strains for the medical and recreational markets amid the race to provide patients and other consumers with consistent, premium product.
The Motley Fool report notes the declining stock values of many cannabis producers following Canada’s transition to legalization, adding that investors may become increasingly unhappy if losses increase while growers continue expanding their capacity and working on product diversification, branding and marketing. That includes The Green Organic Dutchman, which the report describes as a potential top-five producer once it gets running on all cylinders with its expected 195,000 kilograms of annual production (including 40,000 kilogram-equivalents from edibles and cannabis-infused beverages as they become legal).
The Green Organic Dutchman acknowledged in its third quarter report that “expanding its operations, administration and marketing infrastructure to rapidly scale its business” resulted in a loss for the three and nine months ended September 30, but it stated that those losses were in line with budgeted expectations.
Chief Financial Officer Sean Bovingdon noted in the third quarter report that The Green Organic Dutchman “has secured its financial future by raising over $450 million [and] fully funding [the company’s] current domestic and international plans,” adding that TGOD has “no plans to return to the market for additional capital at this time.”
Bovingdon continued, “We have de-risked the capital side of our business and with our focus now on delivering medical and recreational sales in Canada and internationally. We expect to drive significant value for shareholders in 2019 and beyond.”
For more information, visit the company’s website at www.TGOD.ca
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