Cannabis News for Florda
Cansortium Inc. (CSE:TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated provider of premium-quality medical cannabis, today announced financial results for its fourth quarter and... CANSORTIUM INC. REPORTS FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS; PROVIDES PRELIMINARY FIRST QUARTER 2020 METRICS AND INITIAL FULL YEAR 2020 OUTLOOK

Cansortium Inc. (CSE:TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated provider of premium-quality medical cannabis, today announced financial results for its fourth quarter and full year ended December 31, 2019. The Company also provided preliminary first quarter 2020 financial metrics and its initial full year 2020 outlook.  The Company’s audited consolidated financial statements and accompanying notes for fiscal 2019, along with the Management Discussion and Analysis (MD&A) are available under the Company’s profile on SEDAR at www.sedar.com and are also accessible through a link on the Investor Relations section of the Company’s website at www.getfluent.com.

Executive Chairman Neal Hochberg commented, “Cansortium took significant strides in the second half of 2019 to improve the Company’s balance sheet and establish a platform for profitable growth in our core markets of Florida, Michigan, Pennsylvania and Texas. During 2019, we expanded our dispensary footprint in Florida to 18 locations and we operationalized our key cultivation facility in Tampa, which is the cornerstone of our vertically integrated operations in Florida. Since the beginning of 2020, we have continued to make significant improvements to the business and are pleased to share that Q1 2020 marked the first time in the Company’s history that Cansortium generated positive EBITDA, driven by strong revenue growth. We believe that revenue growth and profitability will continue to strengthen through the remainder of 2020.”

Selected Fourth Quarter 2019 Financial Highlights Versus Fourth Quarter 2018 Results

  • Consolidated revenue increased 52 percent to $9.5 million, compared with revenue of $4.9 million for the fourth quarter of 2018
  • Consolidated loss from operations totaled $(5.8) million, compared to loss from operations of $(10.2) million for the same period of 2018
  • Consolidated Adjusted EBITDA(2) totaled $0.1 million, compared to Adjusted EBITDA(2) loss of $(10.3) million for the same period of 2018

Selected Full Year 2019 Financial Highlights Versus Full Year 2018 Pro-Forma Results(1)

  • Consolidated revenue increased 51 percent to $28.5 million, compared with pro-forma revenue of $18.9 million
  • Consolidated loss from operations totaled $(30.9) million, compared with pro-forma loss from operations of $(14.0) million
  • Consolidated Adjusted EBITDA(2) loss totaled $(6.9) million, compared to Adjusted pro-forma EBITDA(2) loss of $(16.0) million for the same period of 2018
(1)Pro-forma measures reflect the consolidation of Knox Servicing, which was accounted for as an equity method investment until August 15,
2018, the date on which the Company acquired the remaining interest in Knox Servicing and became the sole member, and are non-IFRS
financial measures that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures
presented by other companies.
(2)Adjusted EBITDA is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be
comparable to similar measures presented by other companies. The Company calculates adjusted EBITDA from EBITDA plus (minus)
unrealized loss (gain) on embedded derivatives, plus (minus) certain one-time non-operating expenses, as determined by management.
Reconciliations from EBITDA and Adjusted EBITDA to Net Loss are included in the accompanying financial schedules.

Preliminary First Quarter Financial Metrics

The Company intends to avail itself of the 45-day filing extension provided by the Canadian Securities Administrators as blanket relief, and Ontario Instrument 51-502: Temporary Exemption from Certain Corporate Finance Requirements (the “Order”), for periodic filings normally required to be made by issuers during the period from March 23, 2020 to June 1, 2020. Accordingly, the Company will be postponing the filing of its quarterly financial statements for the three months ended March 31, 2020 and the related management’s discussion and analysis beyond the original filing deadline of May 31, 2020. In the interim, it is providing the following select preliminary financial metrics for the period.

  • Preliminary, unaudited consolidated revenues for the first quarter ended March 31, 2020 totaled approximately $10.2 million, an 85% increase as compared with revenues of $5.5 million in the first quarter of 2019. During the first quarter of 2020, the Company opened its 19th medical marijuana dispensary in Panama City, FL. It operated 9 dispensaries during the comparable period in 2019. In April, the Company opened its 20thFlorida dispensary in East Orlando, FL – it’s third in the greater Orlando market.

  • Q1 2020 marked the first time the Company was EBITDA positive, achieving preliminary EBITDA of $0.1 million and adjusted EBITDA of $0.9 million, compared with EBITDA loss of $(5.5) million and adjusted EBITDA loss of $(3.3) million in the comparable period of 2019.

Initial Full Year 2020 Outlook

The Company is projecting consolidated revenues for 2020 in the range of $55 million to $60 million and adjusted EBITDA of more than $15 million. The forecast is based on projected revenues of at least $45 million for Cansortium’s Florida operations with additional revenue from the Michigan, Pennsylvania and Texas markets. 

The Company projects that it will open six additional Florida dispensaries during the remainder of 2020. These locations include Coral Gables, Kendall, South Beach (Miami Beach), Coral Springs, Fort Pierce and Deerfield Beach. In addition, the Company expects to develop two new dispensaries in the south-central region of Pennsylvania during 2020 that will begin operating in early 2021.

Mr. Hochberg noted, “Our preliminary first quarter results and full year 2020 outlook reflect confidence in management’s ability to execute the operational and financial restructuring plan (the “Plan”) developed by the Company’s Board of Directors and its Special Committee.”  The successful completion of Phase One of the Plan included:

  • significant staff rationalization and cost savings
  • improvements to the Company’s main cultivation facility in Tampa to reach full operational capacity
  • sale of non-core operations in Canada and Puerto Rico
  • extension of near-term debt maturities and reduction of nearly $10 million of contingent liabilities
  • completion of a private equity placement for gross proceeds of approximately U.S.$4.6 million to fund strategic growth opportunities
  • establishment of a strategic partnership with Moxie to improve cultivation, branding and product mix.

Mr. Hochberg added, “We are proud of management’s accomplishments during the past six months and we are now entering Phase Two of the Plan which will focus on growth and long-term shareholder value creation. We believe that Cansortium’s projected profitability will enable the Company to pursue the following targeted initiatives:”

  • Expand its Florida dispensary network to 26 by the end of 2020
  • Augment its Florida cultivation capacity
  • Utilize technology and various marketing initiatives to increase sales and customer loyalty
  • Generate revenue in Michigan during 2020
  • Grow its Pennsylvania dispensary network to three by 2021
  • Continue to promote expansion of the medicinal cannabis market in Texas

Mr. Hochberg concluded, “We are committed to carefully focusing our capital and other resources on the most promising, actionable U.S. medical marijuana markets. In Florida, despite the unprecedented challenges presented by the ongoing global COVID-19 pandemic, we are strengthening the Fluent brand’s competitive position by continuing to serve Florida’s growing medical marijuana patient population as a designated essential service and we continue to grow revenues while managing expenses to drive profitability. Together with additional opportunities in Michigan, Pennsylvania and Texas, we are positioned to make meaningful progress in 2020 toward enhanced cash flow and profitability.”

ABOUT CANSORTIUM INC.

Headquartered in Miami, Florida, and operating under the Fluent™ brand, Cansortium is focused on being the highest quality cannabis company in the State of Florida driven by unrelenting commitment to operational excellence from seed to sale. Cansortium has developed strong proficiencies in each of cultivation, processing, retail, and distribution activities, the result of successfully operating in the highly regulated cannabis industry. In addition to Florida, Cansortium is seeking to create significant shareholder value in the attractive markets of Texas, Michigan and Pennsylvania.

Cansortium Inc.’s common shares and warrants trade on the CSE under the symbol “TIUM.U” and “TIUM.WT.U”, respectively, and on the OTCQB Venture Market under the symbol (OTCQB: CNTMF). Investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on www.otcmarkets.com.

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