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Enter Symbol
or Name
USA
CA



Aleafia Health Inc
Symbol ALEF
Shares Issued 271,953,105
Close 2019-11-11 C$ 0.92
Market Cap C$ 250,196,857
Recent Sedar Documents

Aleafia Health earns $1.85-million in Q3

2019-11-12 07:11 ET - News Release

Mr. Geoffrey Benic reports

ALEAFIA HEALTH REPORTS FIRST PROFITABLE THIRD QUARTER

Aleafia Health Inc. has provided its financial results for the period ended Sept. 30, 2019.

  • Ultralow-cost production at eight-cent cost per gram at outdoor facility;
  • Average net revenue per gram equivalent of $15.11 for medical cannabis sales;
  • Medical cannabis sales up 43 per cent quarter over quarter (Q/Q), adult-use cannabis sales up 53 per cent Q/Q;
  • Active, registered medical cannabis patients increase 48 per cent Q/Q;
  • $57-million in cash/marketable securities, $83-million in working capital;
  • Total expenses decrease 30 per cent Q/Q;
  • Net income improves to $1.9-million, from $11.5-million loss Q/Q;
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) improves 44 per cent Q/Q.

Management commentary

"Aleafia Health has now reached the next phase in our development as we report our first profitable quarter. It saw us realize substantial improvements in all critical financial metrics, as we scale our cannabis health and wellness ecosystem in Canada and globally. Over the last year, we have overseen major cannabis facility buildouts, all of which are now substantially complete. During this industry transition period, our prudent allocation of capital and focus on sustainable growth sets us apart," said Aleafia Health chief executive officer Geoffrey Benic.

"Today, we believe that with our outdoor grow facility, we are among the lowest-cost Canadian producers, while realizing a strong average revenue per gram sold. These results demonstrate the executional capabilities of our management team, with a clear path towards continued profitability for our young company."

        THIRD QUARTER CONDENSED INCOME STATEMENT
 
                                                 Sept. 30,      June 30,
Financial results (000s of dollars)                  2019          2019

Total revenue                                      $5,290        $3,951
Gross cannabis revenue                              4,157         2,532
Clinics revenue                                     1,133         1,419
Gross profit before fair value adjustment           2,032           557
Total expenses                                      8,460        12,069
Adjusted EBITDA (loss)                             (2,526)       (4,538)
Net income (loss)                                   1,859       (11,477)

                                                                   

Combined research and consultation revenue

Revenue growth: A robust increase in cannabis sales drove record revenue in the quarter. During the reporting period, revenues from the sale of packaged consumer products represented 94 per cent of net cannabis revenue.

                                   Sept. 30, June 30,
Cannabis revenue (000s of dollars)     2019     2019

Net medical cannabis revenue         $1,450   $1,011
Net adult-use revenue                 2,152    1,409
Net bulk LP-to-LP revenue               224        0
Total net cannabis revenue            3,826    2,420
                                                      


Ultralow-cost production: As previously announced and subsequent to the reporting period, the all-in cash cost per gram to harvest at the company's Outdoor Grow facility was 10 cents, including capital costs amortized over a five-year period. The company now boasts among the industry's lowest cost production and, during the reporting period, maintaining among the highest average net selling price per gram of its peers.

  • Average net selling price per gram (medical): $15.11;
  • Average net selling price per gram (adult-use): $6.40;
  • Average net selling price per gram (bulk wholesale): $6.

Balance sheet: Strengthened balance sheet during the reporting period, as total expenses declined substantially for the second consecutive quarter, despite significantly increasing the scale of the business.

The company believes that its current cash position is more than adequate to fund all operating and capital activities.

Growth in medical patients: Growth in active, registered medical patients increased by 48 per cent over the preceding period.

Operational results                 Sept. 30   June 30

Active, registered medical patients   10,298     6,959
                                                          


The company has served over 70,000 clinic patients to date through its national network of medical cannabis clinics and education centres. The company believes it is well positioned to capture increased medical cannabis sales market share due to its unique, integrated health and wellness ecosystem including clinics.

Facility and production update

In the last year, Aleafia Health has overseen three major construction projects. The Port Perry Outdoor Grow facility, the Niagara Greenhouse and the Paris phase II expansion are now substantially complete, while construction is continuing at the phase II expansion of the Outdoor Grow facility. At an annualized run-rate basis, cultivation capacity is anticipated to reach 129,500 kilograms across the company's completed wholly owned facilities, upon receipt of regulatory approval for the Niagara Greenhouse and expanded outdoor grow. The current licensed and operational capacity is 32,600 kg.

Port Perry Outdoor Grow: Subsequent to the reporting period, the 2019 outdoor harvest was completed at the company's 1.1-million-square-foot (26-acre) outdoor grow facility. Despite commencing planting in the middle of the growing season, following regulatory approval, the inaugural harvest yielded approximately 10,300 kg of dried flower, with an all-in cash cost per gram to harvest of 10 cents. Critical quality control tests conducted to date have been successful.

  • 2.6-million-square-foot phase II expansion: On Sept. 4, 2019, the company announced that it had acquired the farmland directly adjacent to its Port Perry facility for a cash purchase price of $1.2-million. The expansion adds an additional 2.6 million square ft (60 acres) of cultivation area, for a total of 3.7 million square ft (86 acres). Fencing and the security infrastructure at the expanded site have been largely completed and the company expects to formally submit its licence amendment application and site evidence package to Health Canada during Q4 2019.

Paris processing facility phase II expansion: The company has secured full occupancy for the new building, which is a 30,000 square ft facility entirely dedicated to the extraction, production, packaging and distribution of high-margin, value-added cannabis health and wellness products. Its 115,000 kg of dried flower equivalent extraction capacity, once licensed and fully operational, can process all dried flower grown at the company's cultivation facilities.

Niagara Greenhouse: Material capital improvements of the Niagara Greenhouse are now complete and the facility can be operationalized within two weeks of securing its Health Canada cultivation licence. The modern 160,000 square ft greenhouse features the most advanced automation and a moving container bench system that allows for a perpetual, year-round harvest.

Conference call and webcast

Date:  Nov. 12, 2019

Time:  8:30 a.m. EST

United States/Canada toll-free participant call-in:  866-679-9046

Passcode:  7778885

International toll-free participant call-in:  409-217-8323

Passcode:  7778885

This conference call will be webcast live over the Internet. Audio of the call will be available to participants through both the conference call line and webcast; however, the presentation may only be viewed via the webcast. Participants who miss the live call can view a replay at any time.

About Aleafia Health Inc.

Aleafia Health is a leading, vertically integrated cannabis health and wellness company with four primary business units: cannabis cultivation and products, health and wellness clinics, cannabis education, and consumer experience with e-commerce, retail distribution and provincial supply agreements.

Aleafia Health owns three major cannabis product and cultivation facilities, two of which are licensed and operational, including the first large-scale, operational outdoor cultivation facility in Canadian history. The company produces a diverse portfolio of commercially proven, high-margin derivative products including oils, capsules and sprays. Aleafia Health operates the largest national network of medical cannabis clinics and education centres staffed by MDs, nurse practitioners and educators, and operates internationally in three continents.

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