Sugarbud Craft Growers Corp (SUGR)

[postal72]

TSX-Venture Exchange: SUGR, SUGR.WT

CALGARY, Alberta, Jan. 28, 2019 (GLOBE NEWSWIRE) -- SugarBud Craft Growers Corp. (“SugarBud” or the “Company”) is pleased to provide an update regarding the completion of its 29,800 square foot (“Phase 1”) vertical cannabis cultivation facility at Stavely, Alberta (the “Facility”) and its retail strategy.

Status of the Facility

SugarBud has completed the construction of the Facility’s exterior and inner walls, including the installation of key electrical, plumbing and mechanical equipment (the “Base Building”), and occupancy of the Facility is expected in February, 2019.

The Base Building was completed at a cost of approximately $7.8 million, representing $0.5 million more than the budgeted amount. The additional expenditures were primarily attributable to design changes to allow for future expansion capability, including Phase 2 of the Facility. See Figures 1, 2, 3 and 4 for pictures of the Facility.

Figure 1 – http://www.globenewswire.com/NewsRoom/AttachmentNg/0273a1b0-d335-49ad-bf64-c8bc5bc20060

Figure 2 – http://www.globenewswire.com/NewsRoom/AttachmentNg/09ace4fc-f554-48d3-a5d9-15f02bc6cd7f

Figure 3 – http://www.globenewswire.com/NewsRoom/AttachmentNg/169f5f2d-0600-4ffe-b8e7-323db32f74d9

Figure 4 – http://www.globenewswire.com/NewsRoom/AttachmentNg/a4e8d089-c367-4c4d-b04c-d4f9965756c3

The Company anticipates that it will receive a cultivation license from Health Canada by the end of Q1, 2019. Upon the receipt of a cultivation license, SugarBud will commence cultivation in its first two partially equipped grow rooms. The Company will then begin to equip the remaining six flowering rooms, capital permitting, until the entire Facility is in full production. SugarBud plans to have Phase 1 in full production by the end of 2019.

Phase 1 of the Facility is comprised of 29,800 total square feet of floorplate, including eight ~2,150 square foot cannabis flowering rooms totaling ~17,500 square feet of floorplate. The ceilings of the flowering rooms are 28’ tall, allowing for up to four layers of flowering canopy in each grow room.

SugarBud estimates that under a full development scenario with four layers of flowering canopy, Phase 1 of the Facility will have up to 37,000 square feet of flowering canopy. At a metric of 50 grams per square foot of flowering canopy per crop, and five crops per year, this equates to up to an estimated 9,500,000 grams of dried cannabis flower production per year.

SugarBud’s vertical grow method with four layers of flowering canopy is anticipated to result in a 211% flowering canopy to flowering floor plate ratio. This high utilization of square footage maximizes revenue per square foot of floor plate and minimizes capital costs per square foot of flowering canopy. For reference, if SugarBud were to utilize a single layer of flowering canopy, it’s flowering canopy to flowering floor plate ratio would reduce to 53%.

Phase 2 of the Facility is estimated to be comprised of 12 additional flowering rooms totaling approximately 26,000 square feet of floorplate, up to 55,500 square feet of flowering canopy, and up to an estimated 14,000,000 grams of dried flower production per year (at the same 50 grams per square foot of flowering canopy per crop, and five crops per year). See below for a summary of these figures.

Phase (#) Layers of Flowering Canopy (#) Flowering Canopy (Square Feet) Estimated Annual Dried Cannabis Flower Production (Grams)
1 4 ~37,000 ~9,500,000
2 4 ~55,500 ~14,000,000
Total N/A ~92,500 ~23,500,000
Health Canada Attestation Video

SugarBud has engaged a professional film crew to shoot an attestation video for Health Canada (the “Video”) on February 7 and 8, 2019. The Video is one of the final steps to be taken prior to the receipt of the Company’s cultivation license from Health Canada. The Video will outline the readiness of the Facility for the cultivation of cannabis and the integrity of the Facility’s security protocols.

Timeline Summary

See below for a summary of the estimated timeline for the completion of Phase 1:

Base Building: Completed.
Health Canada Attestation Video: February 7 and 8, 2019.
Building Occupancy: February 28, 2019.
Flowering Rooms 1 and 2 (Partial): March 15, 2019.
Cultivation License: Expected Q1, 2019.
Flowering Rooms 3 – 8: December 31, 2019.
This timeline is subject to change and is based on current internal estimates.
Power and Water

The Company believes that it can access all of the required power for Phase 1 and Phase 2 of the Facility under favorable commercial terms. The Facility is currently operating on generated power with redundancy. SugarBud is performing a comprehensive power study regarding its long-term power needs for Phase 2, which are anticipated to be satisfied with natural gas co-generation, power provided by the grid, or a combination thereof. The objectives of the Company are to employ the most cost effective and reliable power strategy available.

SugarBud has water supply from the town of Stavely in quantities satisfactory for Phase 1 and Phase 2. All water used in growing operations will be processed through an industrial scale reverse osmosis system prior to being used, ensuring that there are no contaminants.

Retail Update

SugarBud’s initial retail strategy of identifying and high-grading potential retail locations is intact and the company is monitoring the AGLC moratorium implemented in December 2018.

SugarBud has identified numerous potential retail locations and intends to enter into non-binding leases conditional upon the ability to achieve applicable licensing for the distribution of cannabis. SugarBud is also evaluating potential joint ventures and acquisitions with respect to existing and potential locations.


Read more at https://stockhouse.com/news/press-releases/2019/01/28/sugarbud-completes-the-construction-of-its-state-of-the-art-vertical#xQDyry1XJwbMVAJr.99