Simply Solventless Begins Retrofit for Increased Production
Simply Solventless Concentrates Ltd. (TSXV: HASH) is excited to announce the commencement of significant upgrades to its Humble Grow Co. facility. This retrofit is set to enhance annual cannabis production capacity from around 8,000 kilograms to an impressive 14,000 kilograms. Such an increase not only promises to enhance production but is expected to significantly boost the company's annual revenue, enhancing it from approximately $9.6 million to $18.0 million based on current market pricing.
Enhancements in Production Capacity
This retrofit project is much anticipated as it positions Simply Solventless to capitalize on the growing demand for cannabis products. With production slated to commence by late 2025 or early 2026, the company is confident that this upgrade will solidify its standing in a competitive market.
Humble’s Strong Performance
Since its acquisition, Humble Grow Co. has shown exceptional performance due to a robust cultivation team and effective cost-cutting measures. In the last reported quarter, Humble generated about $2.4 million in revenue and an EBITDA of approximately $0.5 million. The retrofit leverages the company's strong operational performance and aims to build on this success through expanded production capabilities.
Funding the Retrofit Project
The cost associated with the retrofit is projected to be around $2.5 million. To finance this project, Simply Solventless will utilize a combination of equipment financing and operational cash flow. The company expects to receive government rebates ranging from $0.5 million to $0.75 million, which could effectively reduce the overall capital costs to between $1.75 million and $2.0 million.
Management Insights
Jeff Swainson, President & CEO of Simply Solventless, expressed enthusiasm about the retrofit, stating that the company has been keen to move forward since acquiring Humble. He commended the dedicated efforts of his team members in making this project a reality, highlighting the expected benefits for both the company and its consumers.
Promissory Note Repayment Updates
Alongside the retrofit, Simply Solventless also announced the closure of their negotiation regarding the repayment and amendment of non-interest bearing promissory notes amounting to $7.15 million owed to previous shareholders of ANC Inc. This process involved the repayment of approximately $3.4 million of the notes through the issuance of 6,875,000 common shares valued at $0.50 each.
Equity Issuance Details
The remaining promissory notes highlight the company's liquidity strategies and commitment to financial stability, allowing it to lessen cash flow obligations significantly. The equity issuance was approved by the TSXV and reflects the trust shareholders have in the value of Simply Solventless. This strategic shift not only improves the company’s balance sheet but also paves the way for future growth.
About Simply Solventless Concentrates Ltd.
Simply Solventless Concentrates Ltd. is dedicated to producing high-quality, terpene-rich cannabis products. Their focus on delivering exceptional products to consumers sets them apart in the burgeoning cannabis industry. For more insights into their operations, visit the company's official website.
Frequently Asked Questions
What is the goal of the retrofit at Humble Grow Co.?
The primary goal is to increase cannabis production capacity from 8,000 kg to 14,000 kg annually, thereby enhancing overall revenue.
How much is the estimated cost of the retrofit?
The retrofit is expected to cost approximately $2.5 million, with potential rebates reducing this cost further.
When does Simply Solventless expect to start production from the retrofit?
Production from the retrofit is anticipated to begin by late 2025 or early 2026.
What financial strategies are being employed to fund the retrofit?
Simply Solventless is utilizing equipment financing and cash flow from operations, alongside government rebates.
Who is leading Simply Solventless in this initiative?
The initiatives, including the retrofit, are spearheaded by Jeff Swainson, President & CEO of Simply Solventless, along with a dedicated management team.
