Cannabis Grower Sugarbud Reports Record Quarterly Revenue, Q4 Launch Of First Solventless Extract

Sugarbud Craft Growers Corp. SUGR SBUDF announced the filing of its unaudited condensed consolidated interim financial statements on Monday for the third quarter with a record net revenue of $554,231, compared to $252,177 in the previous quarter.

The cannabis company, based in Calgary, Alberta-based, also confirmed the appointment of John Reilly as a special advisor to the board of directors.

Key Operating Highlights for Q3 2021

• Sugarbud shipped a record total of 156,703 grams of dried cannabis. Net grams invoiced and sold in Q3 2021 were 135,073g - representing a quarter over quarter sequential increase of 160%;
• Gross profit before fair market value adjustments in Q3 2021 was $231,930 vs. $57,397 in Q2 2021; Year to date the Company maintains a healthy gross profit margin of 31%;
• Sugarbud successfully crossed the 30% potency barrier for the first time on a commercial batch whilst maintaining critical total quality attributes such as high terpene profiles – a delicate balancing act that sets Sugarbud’s cultivation and post-harvest processing techniques apart; The Company’s first commercial 30%+ strain - GMO Cookies - will launch in select markets in late Q4 2021;
• The company obtained approval from Health Canada for its amended license permitting the sale of cannabis extract, edible and topical products in Q3 2021;
• It established a clear route to market in Canada’s second-most populous province, Québec – via a Sales, Marketing and Distribution Agreement with ROSE LifeScience Inc;
• Development of Sugarbud’s first flower rosin extract was completed during Q3 2021 and the company remains on track for a Q4 2021 launch of its first solventless extract product, which is derived from Sugarbud’s popular Krypto Chronic #2 cultivar.

“We are very encouraged by the step-change in consumer adoption and product sales we saw in Q3 2021 and believe that the commercial momentum we have generated over the first nine months of 2021 will continue to grow and accelerate into 2022,” Sugarbud president and CEO, John Kondrosky said. “It takes time to establish a strong and loyal brand identity and sustainable business. In our first 12-months of commercial operations, we believe that our focus on both establishing our efficient, demand-driven operating model and on a high degree of consumer-focused excellence, will ultimately pay dividends for investors. “

Q4 2021 Highlights and Outlook for 2021

• The company is on pace to continue the trend of strong sequential quarter-over-quarter growth and expects to ship between 120,000 – 140,000 grams of dried cannabis and record gross revenue of between $750,000 – $850,000 in Q4.
• Sugarbud will be launching a new 3 x 0.5g pre-roll format and expanding its pre-roll product offering to now include its very popular Krypto Chronic #2 and Mule Fuel strains as well as its recently launched GMO Cookies and Bahama Blizzard #11 strains. The Company expects these new strains and product formats to be available to select authorized provincial and territorial distributors/retailers as well as registered medical patients nationwide in late Q4.

Corporate Update

• Subsequent to the third quarter the company closed a $900,000 extension to the existing commercial mortgage loan with Connect First Credit Union. The committed rate is a fixed rate of 4.15% per annum, calculated daily, payable monthly in arrears, and holds a five-year maturity.

Photo: Courtesy of Ryan Lange on Unsplash