Winnipeg-Based Delta 9 Cannabis a “Lean Operation” – LPC
Delta 9 Cannabis Inc. announced stellar financials for its end-of-year report. The Winnipeg-based processor and sales company saw operating revenue take off from about $1 million in 2017 to over $7 million in 2018 – a 702 per cent increase. Gross profits on that increased 1,200 per cent from $442,000 to $5.74 million.
Several cannabis companies in Canada have seen extreme growth after cannabis legalization last October. But what made Delta 9’s financials so special is that they also cut costs at the same time, from three cents per share to two cents.
“When you look at the breakdown of quarter-over-quarter revenue, we’re showing the strong top-line growth and gross profitability. But I think unlike a lot of our competitors, we really trim the loss,” said Delta 9 CEO John Arbuthnot. “What we’re looking to show investors is that we’re running a pretty lean operation. We’re cognizant that, as the company grows, we’re being prudent from a cost-control standpoint.”
Future Looking Good, Too – LPC
Currently, Delta 9 has three retail locations in Winnipeg and Brandon, and an 80,000-square-foot production facility. Projections are that should grow in 2019. Delta 9 has an agreement with Pharmasave to be its preferred supplier, opening up Delta 9 to 650 pharmacies in Canada.
“We look at the company from a production standpoint, we grew tenfold,” Arbuthnot said. “We went from 35 employees to over 175. Am I going to be looking back at 2018 and going, that was such small year compared to 2019?”
Delta 9 has not seen the same level of cannabis revenue as some bigger companies. Aurora Cannabis and Canopy Growth recently reported $54 million and $83 million in revenue for their respective quarters. That’s 7 to 11 times more than Delta 9’s whole year. But with streamlined operations and vertical integration from production to sales, Delta 9 seems to be doing some things right.
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