Zenabis Global Inc (OTCMKTS:ZBISF) Posts Strong Cultivation Results In September

Zenabis Global Inc (OTCMKTS:ZBISF) issued an update on cannabis production results. The company filed a license amendment application for its cultivation license, which will help its production capacity to hit 96,400 kg from 39,400 kg. This growth will be an outcome of expanded cultivation areas to 101,300 square feet for Zenabis Langley – Part 2A.

Zenabis Langley project Timeline

Zenabis has announced new construction timelines for its Zenabis Langley project. Now it will be carried out in two phases, Zenabis Langley-Part 2B and Zenabis Langley-Part 2C. The license amendment for Part 2B will be submitted in next month, while the license amendment for the next phase will be out in February 2020. With this revised timeline, the company can preserve cashflow and lower ramp-up risk. Completing the licensing at Zenabis Langley in the second quarter of next year, the total cultivation capacity on an annual basis will touch 143,200 kg of dried cannabis. The changes in the timeline for Zenabis Langley will defer reaching full design capacity at the Zenabis facility. Still, the company expects to achieve capacity of 96,400 kg by the end of 2019. This is expected to increase to over 111,000 kg after the license approval of Part 2B amendment.

Andrew Grieve, the CEO of Zenabis, expressed his optimism on the recent production results. He stated that they were able to record exceptional production results in September. The production output showed remarkable growth as it surpassed the initial forecast by more than 21%. Performance Ratio declined to 14.2% in September from 30%. The increase in the number of harvests from licensed rooms helped the company to boost its performance.

As of now, the only challenge that the company face is that of rapid scale-up and different cultivation approaches at Zenabis Atholville, which results in room by room variance. The company expects this problem to offset with steady-state production yields for each cultivar in the near-term. Zenabis Atholville has been taking adequate measures to achieve general steady-state operations by the end of 2019.


Zenabis Global Inc. (OTCMKTS:ZBISF) Provides Updates On Construction Of Facilities

Zenabis Global Inc. (OTCMKTS:ZBISF) has provided an operations update on its recent facility construction as well as licensing activities.

The company is finalizing the construction and licensing of the Zenabis Atholville facility and has set sights at Zenabis Langley. The construction at Zenabis Langley is on track with previous guidance. This will increase annual cultivation capacity to 143,200 Kgs of dried cannabis upon completion of licensing.

Review of design capacity for Zenabis Atholville

Zenabis CEO Andrew Grieve stated that the company attained strong cultivations results in July thanks to cultivation success through June. Grieve said that the company reviewed its design capacity upwards by 35% for Zenabis Atholville. He added that the cultivation team has been refining growing practices to optimize yields from the currently licensed space.

The CEO indicated that through October, the company expects a range of cultivation approaches and the scale-up of the facility to result in the substantial room by room variance. After which the company will attain steady-state yield for every cultivar at the Zenabis Atholville facility.

The company will update and publish the latest design updates for the facilities once it has completed harvest from all the flower rooms. The design capacity for Zenabis Atholville was increased to 46,300 kg per year from 34,300 kg per year.

The $25 million senior secured bet

Last month the company announced the completion of a new senior secured debt of $25 million. This will enable the company to finalize the expansion of its facilities to attain an annual design capacity of 143,200 kg dried flower. Equally, Zenabis believes that the financing is enough for the company to become cash-flow positive without seeking incremental debt financing, issue incremental equity capital, or raise convertible debt.  

Concerning the senior secured debt, the company also issued warrants to R.C. Morris Capital Management Ltd for the acquisition of 902, 514 common stock. Also, it reviewed the terms of the subordinated secured convertible notes with holders of the Secured Convertible notes receiving warrants for the acquisition of 1.37 million common shares.

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