Vancouver, British Columbia--(Newsfile Corp. - May 30, 2024) - AgriCann Solutions Corp. ("AgriCann") (with its subsidiaries, collectively referred to as "the Company") wishes to provide a brief update to shareholders since our April 9, 2024 Letter to Shareholders was publicly released and circulated.
- The Company's wholly owned Health Canada licensed subsidiary, Newline Ventures Inc., continues as a bare-bones operation as existing inventory is sold off;
- The cannabis sector consultant hired in early April at Newline departed early without providing recommendations or a meaningful path forward to the board, ostensively for personal reasons;
- The accountant brought in at the Newline level to assume the duties abandoned by our former CFO failed to complete the Company's expected December 31 2023 Q3 consolidated reporting obligations, but did update Newline's bookkeeping;
- The Company remains under the "Cease Trade Order" ("CTO") as issued by the BCSC;
- The Company is barred from accessing any public financing while the CTO remains in effect;
- To effect cannabis sales, licensees must prepurchase Federal excise stamps from the CRA plus applicable taxes and delivery charges. Stamp costs are substantial, along with the compliance and handling costs required for secured storage, transportation, administration, tracking, affixing, reporting, recordkeeping, and related procedures demanded at the Federal level. This financial burden is particularly disadvantageous to specialized craft growers, nurseries and marketers. OCS sales have completely shut down since Newline fell behind on excise payments;
- Further staff reductions and redeployments had to be taken to bring Newline overhead into line in an effort to reach sustainability and preserve asset value;
- A board member is currently considering funding an outside CPA to complete the consolidated accounting to meet the Company's regulatory obligations, but the appetite for further support remains dependent on Newline's operational situation, an admittedly circular relationship;
- The Company anticipates that it will not have the necessary resources to engage an auditor for its March 31, 2024 fiscal year annual audit, typically a $50,000 engagement demanding upfront payment under the circumstances.
Following the resignations of our CEO in December and CFO in February, the Company has struggled to find its feet. Company director and major shareholder Henk Vander Waal, our Master Grower, remains dedicated to the business operations at Newline. Interim CEO and director Tim Tombe, AgriCann's largest shareholder, continues in an oversight capacity and has been instrumental in providing a financial lifeline for Newline to seek a sustainable path forward. COO Bobby Athwal has tried to fill the vacuum created on site in Vernon, in both compliance and sales, wearing multiple hats administratively with limited resources.
As the largest investors and shareholders of the Company, directly and indirectly representing 63.4% of AgriCann shares, remaining board members and officers have been committed to finding a path forward, but financial support is limited and can no longer be assured. Considering the current financial situation amidst an environment of escalating costs and regulatory barriers, it is increasingly unlikely shareholders will see a return on their investment. At this point, privatization may be the best option going forward and is being considered.
ON BEHALF OF AGRICANN SOLUTIONS CORP.
(signed) "Rob van Santen"
Chairman
For further information, please contact:
Bobby Athwal
Chief Operating Officer
Telephone: +1.905.621.2104
About AgriCann Solutions Corp.
AgriCann Solutions Corp. operates through wholly owned subsidiaries Newline Ventures Inc., a multi-licenced facility in nearby Vernon, and Craft Nurseries Canada Ltd., a Health Canada licenced cannabis nursery located in Lake Country, British Columbia.
Forward-Looking Statements
This news release contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements in this press release include, but are not limited to, statements in respect of the Company's ongoing efforts to improve operational and financial efficiencies and the expansion of the Company's operations.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of AgriCann at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to the COVID-19 global pandemic, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and domestic operations and the other risks identified under the headings "Risk Factors" in AgriCann's quarterly and annual filings and other disclosure documents available on the Company's profile on SEDAR+ at www.sedarplus.ca. AgriCann is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/211139
SOURCE: AgriCann Solutions Corp.
