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CAN (ON): Construction roadmap adjusted for agile capacity management

Due to the slower pace of legal market conversion, The Green Organic Dutchman Holdings has announced a new strategic plan as the company works to enhance profitability. "TGOD will optimize operating efficiency by deferring excess capacity and expenses," the team with the company explains. "A new construction and operating plan to reduce cash needs has been adopted that is expected to lead towards positive operating cash flow in Q2 2020."

TGOD is reviewing financing alternatives to complete the construction at its facility at Ancaster and Phase 1 at Valleyfield. "The company is currently debt free with $56.7 million in cash available in Canada, including $40.2 million in restricted cash allocated to capital expenditures," they further explain. 

"The Ancaster, Ontario site is expected to be completed by end of Q4 2019. While the greenhouse has been finished, the processing facility is mere weeks away. Once completed, the annual production in 2020 is estimated to reach 12,000 kg with the means to reach the capacity of 17,500 kg. Construction is mostly complete with all grow rooms licensed by Health Canada."

"Ancaster is a purpose-built facility designed for premium organic cannabis cultivation and processing. The first harvest from the now-completed greenhouse is scheduled for Q4, around the same time that the processing facility will be completed. TGOD is working towards an EU-GMP certification that will enable exports to Europe. The focus on large-scale organic cultivation and premium pricing is expected to generate strong margins as TGOD continues to meet the highest organic standards."

Meanwhile the large-scale project in Valleyfield, Quebec, is being divided into smaller phases. "This site is set to become one of the world’s largest organic cannabis facilities at 1.31 million square feet. Once market conditions fully justify the addition, the expansion of Valleyfield will recommence, moving the initial capacity from 10,000 kg to 65,000 kg. At the completion of all phases, total planned capacity at Valleyfield will reach 185,000 kg."

“With the current Canadian legal market being smaller than initially anticipated, mainly due to a slow rollout of retail locations in key provinces, we believe that our revised plan will allow TGOD to rightsize its production to capture the organic segment, while maintaining optionality to quickly accelerate and expand as more retail locations begin to open,” TGOD CEO Brian Athaide stated in a news release.

In Canada, TGOD is building 1,40,000 square feet of cultivation and processing facilities across Ontario and Quebec. The combined planned capacity of both sites is estimated at 202,500 kg.

For more information:
The Green Organic Dutchman
(905) 304-4201

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