SpeakEasy Reports Second Quarter Revenue Results and Releases Third Quarter Financial Results


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/ THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO US WIRE SERVICES FOR DISTRIBUTION IN UNITED STATES/

ROCK CREEK, BC, July 2, 2021 / CNW / – SpeakEasy Cannabis Club Ltd. (CSE: EASY) (Frankfurt: 39H) (on Company” or TalkEasy“) a holder of a federal license to cultivate, process and sell cannabis under the Cannabis Act is pleased to report that it has reported initial sales and net profits from sales of its cultivation operations in The information contained in this press release should be read in conjunction with the Companys unaudited condensed interim consolidated financial statements and related MD&A (Management report“), which are deposited and available on the Companywebsite at www.speakeasygrowers.com and under the companys profile on SEDAR at www.sedar.com.

Speakeasy Cannabis Club Ltd. logo. (CNW Group / Speakeasy Cannabis Club Ltd.)

We are pleased to report our results for the third quarter of 2021, marking the second quarter of reported revenues. Although we continue to increase our sales profile, we have always maintained a positive gross margin. The positive operating results were offset by a loss on the fair value adjustment of biological assets, a non-cash item. It is common to experience such adjustments during a period when the company is moving into full production and processing., declared Malcolm Davidson, CEO.

“Looking ahead to the fourth quarter, we are already increasing our processing and production profile, which allows us to meet the overwhelming demand for our products. With the new processing equipment, which is expected to be fully operational in early July, we expect to be able to quadruple our extract processing capacity. Our remaining available stock from the 2020 harvest is a perfect material for transformation into extracts and combined with our increase in capacity, we hope to be able to process our remaining available stock just in time for the 2021 harvest. In addition, we are well advanced in our preparations for the 2021 outdoor grow operation. We expect our 2021 crop yield to double the 72,000 kg that was harvested in 2020. I would like to take the opportunity to personally thank our team for their hard work and dedication to SpeakEasy in making our operations a success. “

Financial Highlights for the Nine Months Ended April 30, 2021

  • Income from the sale of flowers, extracts and services $ 1.65M, 100% increase over the comparable period

  • Gross margin before fair value adjustments $ 1,008,604

  • Operating Expenses $ 5,808,018

  • Total of 383,593 grams sold

  • Loss per share of $ 0.02

  • Cannabis inventory of $ 11,352,687

  • Working capital of $ 11,246,092

  • Total assets of $ 36,394,764

  • Total liabilities of $ 9,432,914

  • Invested in $ 2.5 million in cultivation facilities and equipment.

Outlook

  • Product and sales have reached maximum expected production of indoor flowers, extracts and pre-rolled joints and are fully sold out for the foreseeable future.

  • Pre-roll production continues to ramp up to meet supply orders.

  • The 72,000 kg outdoor crop is processed daily with the equipment of the first phase, about 30% has now been mined and is in various stages of preparation for product creation and sale.

  • New extraction equipment recently purchased by our partner, RC Frontier Labs Ltd., is expected to be fully operational in early July, increasing potential extract production capacity by up to 400%. The Company expects to have processed the entire 2020 crop by the end of this calendar year.

  • Based on the new capabilities of the extraction equipment, the size of the crop expected for 2021, and current and future sales forecasts, SpeakEasy expects to be able to process and sell its 2021 crop by November 2022.

  • Once the new extraction equipment is in place, the Company has the necessary inputs and processing capacity to produce more than 3,000,000 grams of refined concentrates over the next 12 months.

  • Currently, extracts represent the highest margins of our product line.

  • The buildings that have been under construction over the past 3 years are nearing completion and when completed will represent over 62,000 square feet of additional licensed production and processing area.

  • Indoor flower production is expected to increase to around 365 kg per month by October 2021 and over 650 kg per december 2021.

  • The Company is focused on developing and launching brands for consumers in 2021, which is expected to contribute significantly to the Company’s revenues in 2022.

About SpeakEasy Cannabis Club Ltd.

SpeakEasy Cannabis Club Ltd. holds a license for cultivation, processing and sale issued by Health Canada under the Cannabis Act. SpeakEasy owns 290 acres of land in Rock Creek, British Columbia, and leverages five generations of BC farming experience and its favorable location to grow and process high-quality, low-cost cannabis products. SpeakEasy is cultivating high-quality, small-batch, artisanal cannabis on a large scale in part of its 63,200 square foot indoor cannabis complex and has completed harvesting from its 60-acre outdoor field. The total annual production of cannabis flowers and biomass is expected to exceed 140,000 kilograms this year.

On behalf of the board of directors

Forward-looking statement

This new press release contains statements that constitute “forward-looking statements”. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause SpeakEasys actual results, performances or achievements, or developments in the industry differ materially from the anticipated results, performances or achievements expressed or implied by these forward-looking statements. Forward-looking statements are statements which are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”. , “Believes”, “potential” and similar expressions, or that events or conditions “will”, “would”, “could”, “could” or “should” occur.

Forward-looking statements contained in this document include statements regarding SpeakEasy’s expectations regarding new equipment, orders and expected receipt of such equipment and the impact such equipment will have on production capacity; its expectation that pre-roll production will begin to meet supply orders; its expected increase in licensed production and processing area; its expectations that its consumer brands will have on bottom lines; its expectations regarding its ability to be a strong competitor and its intention to produce and sell high quality artisanal cannabis, and all other statements which are not statements of historical fact.

Although SpeakEasy believes that the forward-looking information contained in this press release is reasonable based on information available as of the date hereof, by their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors. that may cause our results, performance or achievements, or other future events, to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, activity levels and achievements to differ materially from those expressed. or implied by these statements.

Examples of such assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties associated with general economic conditions; COVID-19, adverse industry events; future legislative and regulatory developments relating to cannabis; the companys the ability to access sufficient capital from internal and external sources, and / or the inability to access sufficient capital on favorable terms; the cannabis and hemp industries and markets in Canada and generally; the demand for CBD distillate, cannabis and cannabis-related products, the ability of SpeakEasy to execute its business strategies; competition; SpeakEasy’s ability to obtain and retain all applicable licenses under the Cannabis Act and other assumptions, risks and uncertainties.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT ATTACH ANY IMPORTANCE TO FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY ON SUCH INFORMATION AT ANY OTHER DATE. ALTHOUGH THE COMPANY MAY CHOOSE, IT DOES NOT COMMIT TO UPDATING THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.

The Canadian Securities Exchange and its regulatory departments accept no responsibility for the adequacy or accuracy of this release.

SOURCE Speakeasy Cannabis Club Ltd.

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