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VANCOUVER, British Columbia, March 08, 2018 (GLOBE NEWSWIRE) — Body and Mind Inc. (CSE:BAMM) (US OTC:BMMJ), (the “Company” or “BAM”) has completed a review of operations and business development initiatives and reports the following:
Flower and production sales in the State of Nevada have experienced a robust increase since the introduction of ‘adult-use’ legislation in July of 2017. Across the board, retailers, cultivators and production companies have experienced a significant increase in sales and profits – a feat that very few cannabis markets can claim. The State of Nevada and the taxation department have provided a favorable landscape for the incumbents by limiting licenses to ensure the market is not flooded with excess supply. Supply remains tight and pricing continues to be favorable. BAM believes consolidation will be a primary theme throughout 2018 as operators look for efficiencies, scale and distribution with the ultimate goal of pushing down costs and drive earnings. The Company continues to assess opportunities that create value and is solely focused on growing its Nevada presence, especially with the recent market correction.
The Pepper Lane operations continue to perform well as inventory is quickly sold. Cultivation and productions sales currently represent a 55/45 ratio respectively but this is anticipated to change over time with a heavier focus on extraction going forward. Kitchen and extraction products maintain the highest margins so the Company is continuing its effort to increase the product line under the Body & Mind Inc. banner. The Company is ramping up ‘trim’ purchases for its extraction department which is anticipated to have a positive impact on cash flows.
Management has also reviewed current yields from cultivation and has determined that more improvement is needed. Several initiatives with relatively low capital costs have been under taken and the Company looks forward to communicating progress in the next quarter with new harvests. As the Company increases flower production in the coming months, the Company is considering mechanization opportunities that will streamline different tasks that currently utilize a heavy staffing requirement. This initiative will also ensure consistency. In terms of staffing, which remains a statewide challenge, the Company enjoys low turnover and believes it has the team in place to absorb new deals, acquisitions, and additional expansion.
The final build out of the existing facility has been in the permitting department of Nevada and the Company anticipates that it will receive the final approvals within the next two weeks. BAM is ready to commence construction immediately upon receipt and estimate that it will take approximately three months to complete construction. What makes this expansion exciting is that for approximately USD $500,000, the company anticipates an increase in production by 40% which could provide a meaningful impact on cash flow, as costs associated with additional square footage are variable.
The deal to acquire the adjacent Pepper Lane North building remains under contract by a real estate investment group who has agreed to complete a sale and leaseback to BAM. The deal to acquire the building adjacent to Pepper Lane is anticipated to close on or around May 2018 and only upon receipt of State and County approvals. There can be no guarantee that such approvals will be granted.
The past quarter has been consumed by the LOI to be acquired and although considerable time, effort and expense was invested in a transaction that never materialized, consolidation of the Nevada market is needed and BAM intends to be a part of it. Body and Mind is a US-domiciled entity which may provide US owners of a private business a tax free share exchange if they wanted to pursue an exit or merger with BAM. The Company maintains a flexible structure totaling 47,704,269 common shares issued and outstanding which should be appealing when considering an ideal vehicle for listing their shares. Management is currently assessing opportunities in retail, cultivation and production.
The Company is currently interviewing investor relation’s personnel who can assist in building greater awareness as BAM intends to increase shareholder communication efforts in the very near future.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information regarding Body and Mind Inc. please contact:
Notice regarding Forward Looking Statements: This news release contains forward-looking statements. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe” and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this news release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including the inability of the Company to obtain shareholder and exchange approval, or to raise additional equity as well as the various risk factors discussed in the Company’s disclosure documents, which can be found under the Company’s profile on www.sedar.com. Body and Mind Inc. undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law or the Canadian Securities Exchange.
We seek safe harbour.