VANCOUVER, July 3, 2019 /CNW/ -  PRESS RELEASE - 1933 Industries Inc., a vertically integrated cannabis consumer packaged goods company that owns licensed cultivation and manufacturing assets to support its brands, has announced that the company received a permanent Occupancy Permit for its cultivation facility, thereby completing the last step of the construction project initiated to expand cannabis cultivation in Las Vegas, Nev.

"The completion of our new cultivation facility marks an incredible milestone for our Alternative Medicine Association (AMA) subsidiary", said company CEO Chris Rebentisch. "We are extremely pleased to be able to move into our new facility and begin operations. This is a five-times increase in flower cultivation to fuel the growth of our proprietary AMA branded products and deliver on our white label contracts. Securing a consistent supply of raw materials will have a positive effect on our margins and future revenues and will enable us to attract additional partners."

Facility Highlights

Total Size: The 67,750-square-foot building is spread over two floors and is zoned as a Light Manufacturing – M-1 facility. This will be one of the largest indoor facilities in Las Vegas.

Cultivation Space: The facility was designed to house 15 bloom rooms, three veg rooms and one clone room. The initial operating canopy will be 22,100 square feet with the ability to expand into another 18,000 square feet, if needed.

Cultivation Cycle: On average, the grow cycle is approximately 15 weeks. Once capacity is reached with all 15 flower rooms filled, the company expects to harvest approximately 1,500 plants every 14 days for a projected 700-800 lbs. of flower per month.

Fertigation System: A Link 4 system controls mixing nutrients (mixing up to 15 different nutrients automatically) and plant watering to each room, according to a pre-defined formula, corresponding to each growth stage. The system controls HVAC, humidification and dehumidification, and oxygen levels with built-in safety alarms in each grow room.

Tim Spencer, director of cultivation, remarked, "Link 4 integrates all the environmental systems, allowing us to track all input data points in the cultivation process. We can then drive our crops with data rather than subjective opinions and truly maximize the potential of the facility".

Consistent Water Supply: The facility includes a 12,000-gallon Reverse Osmosis Storage system. This feature is significant as the Las Vegas municipal water has a high mineral content and cultivating with clean water is essential for plant health. In addition, the volume of water stored allows the company to mitigate the risk of a service interruption.

Plant Health and Disease Management: The HVAC System (a Daikin Variable Refrigerant Volume) multi-split air conditioner allows each room to function independently, with no duct-work built between grow rooms. Having a true "sealed" room increases Co2 levels without waste and allows for effective plant quarantining should a disease outbreak arise.

Lighting System: An eFinity 1,100w DEHPS dimmable electronic ballast – from 1,000w to 600w – provides better control of the light spectrum for each stage of the plant. Utilizing a lighting controller provides the ability to ramp up the light intensity in the morning to mimic a natural "sunrise" and slowly turn down the light towards "sunset," thus giving the plants a more natural lighting pattern and producing the largest yields possible.

Next Steps

Upon securing the transfer of its cultivation license to the new facility, 26 plant varieties, 5,000 clones and 200 moms will be transported to propagate the new facility and commence operations.

MEDFORD, OR, July 3, 2019 /CNW/ - PRESS RELEASE - Grown Rogue International Inc., a vertically-integrated, multi-state cannabis company with licenses and operations in Oregon, California, and now entering Michigan, has released its financial and operating results for its fiscal second quarter ended April 30, 2019. The company's financial statements and management's discussion and analysis for the period are available on the company's SEDAR profile at www.sedar.com or through the company's website at www.grownrogue.com. All amounts are expressed in United States Dollars unless otherwise indicated. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures.

Financial Highlights

• Second quarter 2019 revenues increased more than six-fold year-over-year, from $0.3 million to $1.9 million. Quarter-over-quarter revenues increased 125 percent from $0.8 million in Q1.
• Adjusted Gross Margin was ($0.02) million for the quarter and $0.2 million for the year-to-date. Adjusted Gross Margin was $0.4 million for the second quarter (20 percent) and $0.8 million for the year-to-date (28 percent)
• Adjusted EBITDA3 was ($1.0) million for the second quarter.

"Our second quarter revenue results are indicative of the brand strength and distribution reach we have achieved in Oregon and we are taking the same platform to California and Michigan," said Obie Strickler, CEO of Grown Rogue. "The proposed acquisition of Decibel Farms announced in April is expected to increase our manufacturing capacity in Oregon where we continue to enjoy record demand for our products. Our California distribution license went into effect during the second quarter with revenues expected to commence this month."

Grown Rogue expects to increase its combined annual flower production capacity in Oregon and Michigan from approximately 5,000 lbs (2,300 kgs) currently, to approximately 12,000 lbs (5,400 kgs) by the end of fiscal year 2019 following the anticipated incorporation of Decibel Farms and scaling of its cultivation operations in Michigan. The increased capacity is inclusive of the 40,000 square feet of greenhouse production capacity in Oregon in the proposed Decibel Farm transaction announced in April 2019. Grown Rogue's anticipated acquisition of the Decibel brand includes Decibel's "Loud" branded pre-roll which features a unique "painted on" rosin. Grown Rogue plans to introduce this innovative product in the California market in the third calendar quarter of 2019.

Qualitative Performance Factors

"We believe that licenses, assets, and operations are of little value without an experienced team that knows how to cultivate quality cannabis products at scale and build meaningful brands. Our team has been building these core competencies for the past three years," added Jacques Habra, chief strategy officer.

Grown Rogue has received recognition at regional cannabis competitions for "Highest Percentage THC," "Highest Percentage Terpenes," as previously announced in a press release on Jan. 8, 2019. This recognition for cultivation excellence are the foundation of the Grown Rogue products that the company intends to bring to California and Michigan.

Grown Rogue Current Multi-State Presence

Well-established in Oregon, Grown Rogue has expanded into California and its third state, the highly populated, limited-license state of Michigan through a partnership agreement.

Oregon Operations

• Cultivating 130,000 sq. ft. of canopy in Oregon (including Decibel Farms) including three outdoor and greenhouse farms and a state-of-the-art indoor facility
• Increased outdoor yield from 2018 to 2019 by over 50 percent
• Increasing market penetration and sales revenue

California Operations

• Expanded into California with a 16,000-square-foot microbusiness facility in Eureka with retail, processing and distribution licensing partnership spanning San Francisco to Los Angeles.
• Secured state and local approval for distribution license and type 6 manufacturing (non-volatile), and local approval for type 7 manufacturing (volatile).

Michigan Operations

• Subsequent to the close of the second quarter a binding LOI was signed to acquire Michigan operator "Inferno Gardens Inc." which includes one retail dispensary (referred to as provisional centers in Michigan), a 24,000-square-foot indoor cultivation facility, and a processing/manufacturing center. First sales are anticipated to begin in early 2020.
• As a result of this new agreement with Inferno Gardens originally disclosed in a press release on July 2, 2019, Grown Rogue has elected not to move forward with a previously announced option to acquire alternative Michigan operations as previously announced in a press release on Feb. 25, 2019.

Second Quarter 2019 Financial Overview

Grown Rogue revenue grew to $1.9 million, a 548-percent increase from revenue of $0.3 million in its second fiscal quarter ended April 30, 2018, and a 125-percent increase on a consecutive quarterly basis from $0.8 million in Grown Rogue's first quarter of fiscal 2019. Organic sales growth are driven through the internal sales force, third party distribution, and strengthening of the Grown Rogue brand.

F2019 Q2 Adjusted Gross Margin was $0.4 million, or 20 percent of revenues, a substantial improvement from Adjusted Gross Margin of ($0.04) million for the same period last year. Adjusted Gross Margin improved as a result of the efforts of the company over the past year to refine its cultivation processes to be more efficient, resulting in lower cost of sales, while also increasing revenue.

General and administrative expenses were $1.3 million for the second quarter of fiscal 2019, compared to similar expenses of $0.6 million for the second quarter of fiscal 2018. The increase in expenses was primarily related to the expanded scope of operations and associated sales, general and administrative support. Grown Rogue's Adjusted EBITDA amounted to ($1.0) million for the three months ended April 30 2019, compared to ($0.6) million for the three months ended April 30, 2018. The increased loss was primarily attributable to infrastructure investments required to support the company's growth plans.

The company's cash and cash equivalents position was $0.3 million as at April 30, 2019. Subsequent the second quarter the company completed a CAD $1.5 million debenture financing.