Cannex Capital Holdings Inc. (“Cannex Capital” or the “Company”) (CSE: CNNX / OTCQX: CNXXF) is pleased to provide the following update to inform shareholders of current operations, management team additions, cash position and potential multi-state expansion opportunities.
Further to the Company’s October 16, 2018 news release, the total of US$3.5-million advanced to Ametrine Wellness dba Jetty Extracts in April and August 2018 (the “Jetty Note”) has been repaid in full, along with accrued interest. Furthermore, as reported on October 2, 2018, Cannex Capital is cash flow positive and earned US$2.43 million of income in its most recent fiscal quarter. With the repayment of the Jetty Note, the Company’s consolidated cash balance is over US$13.3 million.
As an emerging multi-state operator, the Company is actively reviewing opportunities in legal US medical and recreational cannabis states, with a focus on California, Nevada and Arizona. These states are projected to have a combined market size of US$8.7 billion by 2022, according to a July 24, 2018 GMP Securities report titled US Cannabis Industry. The Company remains committed to its vision of being a leading vertically-integrated multi-state operator specializing in boutique cultivation, extraction, and processing, as well as brand development and distribution.
“We are in discussions with a wide range of groups, including investors, who recognize our operational leadership, especially with respect to extraction and brand development,” said Leo Gontmakher, COO of Cannex Capital. “We are strong believers that operational fundamentals will define successful cannabis companies as the industry evolves,” continued Gontmakher, “and will form the foundation for exceptional brands.”
As recently reported, David Croom has been appointed the Company’s new Washington State based Chief Financial Officer. Mr. Croom’s experience as a senior financial executive at Amazon, Microsoft and Chevron, where he managed multiple reporting subsidiaries, will be invaluable as Cannex Capital expands its portfolio to include new operating divisions. Cannex Capital has also recently hired an experienced licensing and compliance manager, April Roth, to oversee and manage new licensing applications and licensing compliance. Ms. Roth is also based in Washington State and is an important addition to the Company’s US operating team.
In Washington State the Company is pleased to report that its strategic operating tenant, Superior Gardens LLC d/b/a Northwest Cannabis Solutions (“NWCS”), continues to generate outstanding operating results with strong revenues of approximately US$8.5 million for July, August and September and record unit volume sales for the same period and up on a year on year basis. NWCS reports that its derivative products, edible brands, and top-selling dried flower products continue to have a loyal and growing consumer base in Washington and across multiple consumer demographics. In these same months, NWCS sold cannabis products to over half of Washington’s cannabis retailers.
“We are very pleased to be associated with such a strong operations team as NWCS, who demonstrate consistent leadership in a highly competitive market,” said Anthony Dutton, CEO of Cannex Capital. “As Cannex expands, we will leverage the proprietary brands and intellectual property used at NWCS to become dominant operators in new jurisdictions. Cannex has invested considerable time and resources developing our proprietary IP, protocols and SOPs, and we’re excited to be working with NWCS and to see our model working so effectively.”