1933 Industries (CSE:TGIF) (OTCQX:TGIFF) announces its second quarter 2020 financial results for the period ended January 31, 2020.
1933 Industries Inc. (the “Company” or “1933 Industries”) (CSE:TGIF) (OTCQX:TGIFF), a vertically integrated cannabis consumer packaged goods company, announces its second quarter 2020 (“Q2 2020”) financial results for the period ended January 31, 2020. All amounts expressed are in Canadian dollars.
During Q2 2020, the Company successfully completed two capital projects that were its primary strategic focus: completion of its new Las Vegas cultivation facility and commencement of cultivation in such facility by its subsidiary, Alternative Medicine Association (AMA); and expansion of its cultivation and manufacturing operation to California under a management agreement with Green Spectrum Trading Inc. (“Green Spectrum”) to support its portfolio of consumer packaged goods and licensing partners. The projects spanned two quarters and required extensive capital expenditures and resources and are notable milestones for the Company. The Company also continued to attract premium brands as partners in Nevada, and added edibles brand The Pantry Company as well as premier cannabis brand Bloom™ to its extensive product portfolio.
While the Company utilized the necessary resources to bring its infrastructure projects in Nevada and California online, it maintains a strong cash position, with a balance of $9.1 million available as of Q2 2020 for on-going operations.
Q2 2020 saw lower than expected revenues due to reduced overall sales for the Company’s cultivation arm as it transitioned from its old facility to its new cultivation facility in Las Vegas and a slower than expected recovery of vape and distillate sales. Year-to-date revenues are $7 million while Q2 2020 revenues were $3.1 million, a 20% decrease from the previous quarter and a 15% decrease from Q2 2019.
The costs of maintaining shelf space resulted in a negative gross margin of $776,000. Other factors contributing to this were necessary biomass purchases from third parties and the high