Design capacity outperformed by 35% in May and 70% increase in licensed annual cultivation capacity

CAN (BC): Grower provides operational update

Zenabis Global has provided an update on its recent cannabis production figures; facility construction and licensing; hemp cultivation; and Zen Craft Grow.

Cannabis Production Summary
In May 2019, Zenabis realized a total harvest weight of 908 kg of dried cannabis. Zenabis’ harvest weights have increased sequentially every month since October 2018.

The amount harvested for the three months ending May 31, 2019 exceeded the design capacity of the flower rooms by an average of 24.7%, compared to 14.8% in the three-month period from February 2019 through April 2019.

2019 Full Year Harvest Forecast – Zenabis Atholville and Zenabis Stellarton
For its existing licensed facilities of Zenabis Atholville and Zenabis Stellarton (and excluding Zenabis Delta), Zenabis expects to produce approximately 12,2284 kg of dried cannabis from June through December of 2019. Zenabis intends to provide a monthly cultivation forecast for Zenabis Langley upon receipt of its cultivation license. 

Construction and Facility Update

Zenabis Atholville (Indoor)
With the recent receipt of the license amendment for Phase 2B, the 380,000-square-foot Zenabis Atholville indoor facility is now licensed to produce cannabis from 251,600 square feet with licensed annual cultivation capacity of 22,300 kg of dried cannabis (Phase 1, Phase 2A and Phase 2B). Zenabis is in the process of licensing additional flower rooms and support space to expand cultivation capacity.  The remaining phase, Phase 2C consists of 118,000 square feet and Zenabis has submitted a license amendment to Health Canada to commence production in the first 10 flower rooms of Phase 2C (“Phase 2C – Part 1”), which will expand the facility’s licensed annual cultivation capacity by 9,800 kg of dried cannabis. The remaining four rooms of Phase 2C (“Phase 2C – Part 2) are nearing completion. Zenabis expects to submit a license amendment for the second portion of Phase 2C in July or August 2019, which will expand the facility’s licensed annual cultivation capacity by a further 2,200 kg of dried cannabis. Upon license amendment approval from Health Canada of Phase 2C – Part 1 and Phase 2C – Part 2, Zenabis Atholville will be fully licensed and have reached its full annual design capacity of 34,300 kg of dried cannabis.

Zenabis Langley (Greenhouse)
Zenabis is currently converting 10 acres of Zenabis Langley (“Site A”) following the successful transfer of all floral and propagation business from Site A to Zenabis Aldergrove. Construction at Zenabis Langley is progressing in accordance with previously provided timelines. Zenabis has completed the construction of all interior and exterior insulated wall panels, offices and staff support areas, and the majority of operational workspaces. Security work has been completed for the first phase of Site A and HVAC work is ongoing. Completion of the first phase of Site A is on schedule.

Site A is divided into six flower zones, which are similar to those in an indoor facility, but much larger in size. Construction of the flower rooms is expected to be completed between June and August, with the first phase of construction expected to be completed by the end of June, and construction expected to be substantially complete for all rooms by the end of July. Site A has an annual design capacity of 96,100 kg of dried cannabis.

Zenabis Delta
Zenabis is currently in the process of constructing an extraction, post-processing and analytical testing lab at Zenabis Delta. In order to progress the construction of the Zenabis Delta facility, Zenabis has suspended the limited growing activities that it had at this site (100kg of licensed annual cultivation capacity). This construction project is expected to be complete in the third quarter of 2019.

Licensing Update
Zenabis is currently in the process of various licensing submissions for Zenabis Langley, Zenabis Atholville and Zenabis Stellarton:

  • Zenabis Langley Site A – Cultivation License
  • Zenabis Atholville Phase 2C – Part 1
  • Zenabis Stellarton – Processing License
  • Zenabis Atholville Phase 2C – Part 2

Zenabis is currently using Zenabis Pitt Meadows, Zenabis Aldergrove and Zenabis Langley for the propagation and floral business, as well as hemp cultivation activities summarized in the “Industrial Hemp Cultivation” section below. All hemp cultivation at Zenabis Pitt Meadows and Zenabis Aldergrove that utilizes greenhouse space is in space currently not being used by the propagation and floral business. As a result, this will not have a negative impact on Zenabis’ propagation and floral business. Hemp cultivation will not interfere with the planned cannabis cultivation activities at Zenabis Langley, nor will it reduce the cannabis cultivation design capacity of Zenabis Langley.

Industrial Hemp Cultivation
Since Zenabis announced its receipt of an industrial hemp license on June 3, 2019, it has commenced the cultivation of industrial hemp at Zenabis Pitt Meadows and Zenabis Aldergrove. In June, Zenabis planted over 1,000,000 hemp plants, primarily in greenhouse space.

Zen Craft Grow
Since Zenabis’ last operations update on June 3, 2019, it has signed two additional definitive cannabis supply agreements under its Zen Craft Grow program, bringing the total number of exclusive, definitive supply agreements to five. Through the Zen Craft Grow program, Zenabis supports cannabis micro-cultivators across Canada in the final stages of the Health Canada licensing process. Through these arrangements, Zenabis purchases cannabis from small, craft growers which provides Zenabis with unique genetics and small-batch, artisinally grown cannabis to distribute to retail channels for discerning adult-use consumers across Canada.

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