Citation Growth update on its Las Vegas operations.
In March 2020, Citation realized the first effects of the global pandemic when it saw the cannabis industry shut down due to government regulations, resulting in a large decline in demand and sales. The company made the decision to remain operational and focus on efficiencies and build the foundation for growth strategies. As the global economy adapted to new business processes, Citation experienced large delays in the product supply chains where normal business processes took days rather than hours. Being a nimble organization, Citation not only adjusted quickly to the new vendor supply chain environment, but also solidified new and synergistic relationships that have greatly enhanced its operational efficiencies and overall quality of input materials.
After a stringent due diligence process, Citation was successful in obtaining a new banking facility by partnering with a Cannabis Compliant Intermediary, who facilitates access to cannabis friendly banking solutions. This opportunity has increased compliance and allowed for access to more traditional lending. Through this Intermediary, Citation has secured an equipment financing loan of $95,585 USD for a period of 12 months with a total interest on repayment amount of 22.5%. The proceeds were dedicated to the purchase of the remaining Fluence Bioengineering VYPR 2P lights required to complete our grow room changeover. The new brand of LED lighting will not only reduce power consumption, but also greatly increase production output, meaning Citation will be able to harvest more of its award-winning Fiore flower while maintaining top-shelf quality of organic cannabis.
With these partnerships created, Citation is also finalizing the implementation of its enhanced growing methodologies, which includes deploying a new organic soil mixture and nutrients. Citation currently has crops growing under these new technologies and organic grow methods with harvests commencing in September 2020 and sales initiatives in place to distribute its products to Nevada dispensaries immediately after packaging. The company has installed time lapse cameras in the grow facility to capture the life cycle of the plants and production to share with stakeholders.
In July 2020, the State of Nevada appointed a Cannabis Compliance Board (“CCB”) to oversee and administer the Cannabis Division in Nevada, previously under the control of The Department of Taxation. The CCB lifted the license moratorium that has been in effect since 2019. This important decision, aimed at improving compliance in cannabis business transactions, allows for licenses to be transferred and sold, which is important for Citation, who owns an extra medical and recreational cultivation license that now may be sold in the Nevada market. As such, Citation is actively looking to purchase a Dispensary License or partner with an existing license holder; an initiative incorporated into the Company’s Growth Strategy released at the April 2020 AGM.
“I am extremely proud of our team,” commented CEO Erik Anderson. “Everyone is working long hours and we have not been deterred by the global pandemic resulting from the COVID-19 virus. Although Nevada retail dispensaries were hit hard by COVID-19 restrictions, we have continued to harvest cannabis and we currently have over 300 pounds of fresh frozen inventory that has been stockpiled throughout the pandemic. We plan to sell the entire lot to a local processor in order to bring our own production facility back online once all the new grow lights are installed. Our team has worked tirelessly to maintain our downstream sales channels in Nevada and we are laser-focused on ensuring that our brands – Fiore flower and Diamante concentrates – continue to be in high demand by cannabis connoisseurs. We have turned the corner as a company and are ahead of schedule to deliver cashflow positive results in our 2021 fiscal year.”
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Citation Growth Corp.