Heritage Cannabis brings in C$4 million in 1Q revenue

Heritage Cannabis Holdings Corp () (OTCMKTS: HERTF) announced Tuesday it brought in C$4 million in revenue in its first quarter of fiscal 2020  — a milestone achievement as the company reported zero revenue in the year-ago quarter.

The company also said it closed its first quarter, which ended January 31, with a cash position of C$9.3 million and working capital of C$14.8 million. 

"The first quarter showed continued growth in revenue and the advancement of our business strategy with the expansion of our licensed area at CannaCure progressing well,” said CEO Clint Sharples in a statement. 

READ: Heritage Cannabis to adjust production capacity amid coronavirus threat

“We completed the installation and commissioning of downstream processing equipment and are in the process of commissioning two previously purchased extraction machines," he added. 

Sharples also said the company is monitoring the threat that the coronavirus (COVID-19) poses to its operations at its production facilities. 

“We have a strong balance sheet that we believe will support the company through this time and we have taken steps to preserve cash balances,” he said.

Heritage Cannabis said it is not yet producing positive cash flows from operations, but management expects to achieve positive cash flow from operations later this year.

The company also provided a recap of its operational highlights during the quarter:  

The company entered into a 12-month supply and manufacturing agreement with James E Wagner Cultivation Corporation for the filling and packing of vape pen cartridges for Canadian recreational and medical markets. Its wholly owned subsidiary CannaCure received amendment licensing approval for the expansion of three additional rooms at its facility in Fort Erie, Ontario.  Heritage announced the launch of its EndoDNA Test Kit in Canada powered through its partly owned subsidiary Endocanna. The EndoDNA test analyzes over 500 genes and more than 550,000 Single Nucleotide Polymorphisms in the human body.  The company announced a partnership with Brock University to further Brock's research of cannabis tissue culture and contribute to the advanced understanding of the medical benefits of cannabis.  Heritage entered into a 24-month term loan agreement with Trichome Financial for total proceeds of C$6,700,000. Trichome advanced the company C$4,875,000 on January 30. The company announced the advancement of its joint venture partnership with Empower Clinics Inc () (OTCMKTS:EPWCF) with the order and installation of extraction and post-production equipment units at Empower's licensed hemp processing facility in Sandy, Oregon. 

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