GTEC Provides Fourth Quarter Production Estimates, Corporate Update

GTEC Holdings (TSXV: GTEC) released a small corporate update this morning, providing estimated sales quantities for the fourth quarter of fiscal 2019 as well as other corporate updates.

During the fourth quarter, the company produced a total of 434 kilograms of cannabis, which includes both dried flower as well as trim and what the company refers to as “popcorn”, or smaller cannabis buds. Of the 434 kilograms, the company managed to sell 280 kg, which consisted of 24 kg of recreational cannabis at an average price of $9.25 per gram. The remainder sold was on a business to business basis, with flower receiving $5.25 per gram and trim and popcorn being sold for $2.50 per gram.

During the quarter the firms cash cost of production on a per gram basis rose to that of $2.15 – $2.20 as a result of increased labour and packaging from retail sales. Within the quarter the company identified that it focused heavily on transitioning from a wholesale sales format to that of a consumer packaged goods format, with the first shipment of 24 kg of cannabis being sent to provincial distributors in the last week of the month.

The company has also identified that despite the disparity in cannabis grown and sold during the quarter, that all production is being sold that is produced. GTEC blamed the disparity on that of a delayed shipment in the fourth quarter, which subsequently occurred in Q1 of 2020. GTEC credits the consistent sell through of its products to the fact that it produces some of the highest THC products within the country, as well as the fact that it has completed the transition to focusing on unique premium strains of cannabis.

Outside of cannabis cultivation, the company is still divesting non-core assets as it refocuses entirely on the cultivation of of a premium product. The company has entered into a term sheet to sell its final retail asset which is located in Vancouver, BC. The transaction is expected to close by the end of March 2020. Additionally, GTEC has put its Spectre Labs warehouse up for sale, at a price point of $1.2 million. The sale of that asset is expected to occur within the second quarter of 2020.

Finally, GTEC expects the construction of its 3PL joint venture to be completed during fiscal 2020, with a narrower timeline not yet provided. The venture is said to have the necessary capital to complete its construction buildout and wait for final licensing. The facility is expected to bring an additional 6,000 kg of cannabis cultivation to GTEC’s repertoire annually.

GTEC Holdings last traded at $0.16 on the TSX Venture.


Information for this briefing was found via Sedar and GTEC Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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