Zenabis Provides Corporate Update, Adds Some Good/Bad News

Zenabis

Today, Rich is live with an update on some pot stock picks for the end of the year. He also has an important update on one of his favorite cannabis companies, Zenabis Global Inc (TSX:ZENA) (OTCPK:ZBISF).

Yesterday, ZENA provided an operations update for October 2019. While there’s a lot of information from the update to break down, it’s not the only thing going on. The coast-to-coast cannabis cultivator has some good and bad news for investors, proving that 2019 has some more damage to do before it winds down.

“I don’t think 2019 was what any of us wanted it to be,” says Rich. “Zenabis has been a huge nightmare in 2019, but the one thing I do like about this company is that they’re still going. Products are on the shelves, they’re growing, and they’re moving.”

Zenabis Global’s Recent Highlights

In October 2019, the company increased its cultivation output by 71%. Its yield for the month totaled 3,586 kg of dried cannabis.

Unfortunately, this represents a slight under-performance from ZENA’s forecast output of 3,758 kg. This is likely a result of the fact that the facility in Atholville missed its production capacity by 0.4%.

Enter Your E-mail Address To Subscribe

* indicates required
 

Andrew Grieve, Zenabis CEO, stated:

“October was another month of strong cannabis cultivation at Zenabis Atholville … The 3,586 kg of dried cannabis yield is roughly in line with our revised forecast. Given 14 of 22 harvests in the month were the first harvests in rooms that were licensed in Q2 and Q3 2019, we are pleased with this outcome.”

The company has traditionally exceeded expectations, so the slight under-performance should be no immediate cause for investor concern.

Zenabis’s complete annual cultivation design capacity should increase to 143,200 kg of dried cannabis once construction at its Langley facility is complete. The company is awaiting Health Canada to approve Part 2A license amendment. This will increase its licensed annual production capacity by 69% to 96,400 kg.

A further 4,800 kg of design capacity will then be added once Zenabis submits the license amendment for Part 2B.

Grieve added:

“In October, we also solved our previously noted packaging challenges, so packaging is no longer a bottleneck to providing product to our Provincial partners. At the same time, we continue to make significant progress on the construction of Zenabis Langley.”

ZENA’s Other News

First, the good news: Zenabis recently increased its market share in the New Brunswick cannabis market through the launch of Re-Up, a lower-cost brand of flower and pre-rolls.

The NB-based company now enjoys a 38% market share in its home province. It also announced it’s capable of producing approximately 40,000 pre-rolls a day, or 1.2 million each month. The Re-Up brand is being sold for $5.00, which ZENA hopes will give the product an edge over illicit brands, which are traditionally cheaper than legal ones.

Now, unfortunately, the bad news: Zenabis failed to receive a European Union certification last year for a new facility.

Malta was the intended location of the facility. Unfortunately, regulators there published a “statement of non-compliance with GMP” against ZENA. The decision significantly hinders its ability to ship medical cannabis to Europe.

While this is certainly a setback, Zenabis isn’t down for the count. If you’ve got thoughts on ZENA, let us know about it.

Featured image: Canva

If You Liked This Article Click To Share