- Revenue up by C$1.2 million in Q2 and by overall C$4 million in the first six months of the year
- Company secures 12-month extraction deals with two leading brands
- Sunniva takes strides toward increasing vertical integration
Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF), a company that cultivates, processes and distributes cannabis, has announced its second quarter financial results, detailing milestones and achievements both for the second quarter and the first half of 2018 (http://cnw.fm/6rZik). Recapping the company’s developments over the past six months, CEO Dr. Anthony Holler said that Sunniva has moved closer toward its goal of full vertical integration, which is a key company strategy.
“We made great progress in Q2 2018 towards our goal of becoming a vertically integrated cannabis company in the U.S. In California, construction progressed at our phase one 325,000 square foot state-of-the-art Sunniva California Campus with completion targeted by the end of this year and first harvest expected in Q1 2019,” Holler stated in a news release. “Our extraction facility began generating revenue this quarter. We continue to secure new contracts and are excited about the future revenue opportunities in this and other vertical channels that maximize the synergies with our Full-Scale Distributors device business.”
In June of this year, Sunniva entered 12-month extraction services agreements with two leading California brands for its Sun-Oil Facility. Under the agreements, wholly owned subsidiary CP Logistics LLC will provide distilled oil products for Farmacy Phactory, a producer of high-terpene strains of cannabis. CP Logistics will also produce high quality distilled oil products for Cali Gold, a legacy California cannabis brand specializing in high-end chocolates. The distilled products are to be used in vaporization cartridges.
Holler explained that the company’s main focus in California and the U.S. is to leverage its cultivation and extraction facilities to aggressively pursue upstream distribution and retail opportunities with the purpose of achieving full vertical integration from seed to sale. This will include the launch of Sunniva-branded product lines in various categories, such as flower, extracted products, vaporizers and beverages.
Speaking of the company’s operations north of the border, Holler added, “In Canada, we received our Confirmation of Readiness letter for a license from Health Canada and broke ground and commenced construction on the 759,000 square foot Sunniva Canada Campus in Okanagan Falls, British Columbia. Our Natural Health Services’ clinics reported another strong quarter of revenue generation and together with the future production from the Sunniva Canada Campus, provide a solid foundation for future Canadian growth opportunities.”
In addition, Natural Health Services (NHS), another wholly owned Sunniva subsidiary, opened its seventh clinic in Windsor, Ontario. NHS is Canada’s largest referral network of cannabis-related clinics and trained health professionals. NHS revenues contributed C$5.8 million to the company’s revenue in the six months ended June 30, 2018.
During this period, the company’s total revenue amounted to C$9.6 million, against a net loss of C$11.2 million, compared to a C$11.7 million loss in the same period last year.
The company’s expansion over the past months contributed to increased administration and general expenses, which went up by C$5.9 million in the six months ended June 30. Advisory expenses and costs related to the company’s publicly-listed status also added to the raised administration costs.
Other highlights mentioned in the company’s Q2 2018 press release include an additional 12-month extraction services agreement CP Logistics sealed with Pure Applied Sciences, Inc., a wholly-owned subsidiary of Cannabis Strategic Ventures, Inc. (OTC: NUGS), for the extraction facility in California, and construction progress at the Sunniva California Campus. The cGMP-compliant greenhouse facility in Cathedral City is set to commence phase one operations – extraction of 50,000 kg per year – in Q4 2018, with the first harvest expected in Q1 2019. The facility is designed to eventually reach an estimated annual output of 60,000 kg of dry cannabis at capacity.
For more information, visit the company’s website at www.sunniva.com
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