This will boost its Colorado flower production by 200%, with the first harvest expected in March
Cannabis One Holdings Inc () (OTCMKTS:CAAOF) said Tuesday that it has completed the construction and building out a second branded flower cultivation facility, also known as Fox Street.
In a statement, the Denver-headquartered cannabis company said Fox Street is a 13,000 square foot craft quality cultivation facility that can produce 4,800 pounds of flower per year, boosting capacity by nearly 200%.
This will allow Cannabis One Holdings to crack average monthly flower production of 600 pounds, leading to annual topline Colorado cultivation revenue of US$11,700,000 and gross profit of US$7,560,000 at current Colorado per pound averages of US$1,500, said the company.
The first harvest is expected in March, with monthly harvests expected from thereon.
READ: Cannabis One Holdings and One Cannabis Group create first US-based vertically integrated cannabis franchise and brand company
Cannabis One said the facility was built to meet the demand for “three specific strains” that American comedian Cheech Marin, famous for embodying half of irreverent stoner comedy duo Cheech and Chong, selected for Cheech's Stash line. The company expects to drive margin growth through the expansion of its Cheech pre-roll and other craft cannabis lines that are currently sold in over 175 dispensaries across Colorado.
Separately, Cannabis One said that due to “exceptional demand” for Cheech's Stash-branded flower and pre-rolls in Colorado, it has drawn up a blueprint to expand the Kingston cultivation facility from 8,500 square feet to over 16,500 square feet.
“This expansion will more than double the production at Kingston, exceeding 400 pounds of flower per month or 4,800 pounds annually,” said the company.
The Kingston expansion will be funded through cash flow from operations.
"If we brand it, they will come"
Cannabis One said it expects to exit 2020 with over 9,600 pounds per year of branded flower production from its Colorado operations, with an exit 2020 cultivation run rate of USD$14,400,000 and a gross profit of USD$10,080,000.
In a joint statement, Cannabis One Holdings CEO Jeffery Mascio and president Joshua Mann said that with demand for the company’s branded flower at “an all-time high”, coupled with flower prices in Colorado that have “steadily been climbing” over the last 12 months, the team is “extremely pleased” to see the Fox Street facility come online.
“With further expansion of our branded cultivation in Colorado, we expect to show strong cash flow generation as the year continues, allowing us to further expand our offerings within the state,” they said in the joint statement.
“Over the coming weeks and months, we are looking forward to showcasing further cash flow drivers that are fully funded and require no further dilution,” they added.
Cannabis One Holdings focuses on aggregating cannabis retail distribution and brand manufacturing. The company is poised to expand its footprint across North America as it tackles the goal of becoming a premier house of brands, embodied by its tagline: "If we brand it, they will come."
Cannabis One is focused on a house of brands approach, meaning it is home to numerous brands, independent of one another.
Contact the author Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive
