Not for Distribution to U.S. Newswire Servicers or For Dissemination in the United States
All figures in USD unless stated otherwise
Toronto, March 26, 2021 – Halo Collective Inc. (“Halo” or the “Company“) (NEO: HALO) (OTCQX: HCANF) (Germany: A9KN) is pleased to announce that its wholly-owned subsidiary Bophelo Bioscience & Wellness (Pty) Ltd. (“Bophelo“) has completed its first sale of cannabis flower to a licensed cannabis producer and exporter based in Lesotho, Africa. The license-to-license market in Africa is estimated to be $7.1B USD by 20231 and Bophelo is uniquely positioned to capitalize by cultivating high quality flower at affordable prices for African patients. Given this newfound demand, Bophelo has hired 30 additional employees over the last week, bringing total workers on site to approximately 130.
The purchaser bought two lots of two different strains from the 2020/2021 growing season at a price of 30 RND (approximately $2.00 USD) per gram. Bophelo’s cultivation cost is estimated to be less than 5 RND (approximately $.33 USD) per gram. External test results of this raw material at an independent certified ISO 170252 lab showed average total THC content of over 20%i, which is high for African cannabis and allows Bophelo to compete with European growers at a substantially lower cost base.
The Halo management team is getting a clearer picture of the cannabis strains best suited for the pristine climate in Lesotho. After close to 2 years of hunting for the most suitable strains with the most anticipated sales potential, the Company feels confident that it has cultivated cannabis on par with Oregon and California flower at affordable prices for both African and European patients.
Over the coming weeks, the Bophelo team will be selecting production strains from the following cultivars:
OG DNA® Chocolope
OG DNA® Holy Grail
OG DNA® Tangie
Sanni and Kunkel Herijuana
Sanni Motherlode Kush
Bophelo has cloned a number of mother plants from all varieties grown this year to ensure it can produce cloned replicas of the most desirable strains, thereby putting the best into full production while remaining diligent with our ongoing strain hunting efforts.
Sales to African licensed distributors should enable Bophelo to enter African markets quickly, which could unlock additional revenue streams.
After installing a butane extraction unit, which is expected to be finished within the next 42 days, Halo believes Bophelo will be the only volatile licensed extraction company in Lesotho. This may enable contracted extraction of oils and concentrates for other licensed domestic cultivators in Lesotho, another potential new incremental revenue stream.
Andreas Met, Founder of Halo Collective and Head of International Operations, who is guiding the development of Bophelo on-site in Lesotho, states: “As Bophelo begin sales in Africa and soon in Europe, Halo believe that our sales from Bophelo could exceed our sales in California within months and Oregon within a year. This is another critical milestone for Halo and represents two new revenue streams for the Company, that Halo did not envision until we started to market and sell our products and services in Africa. This initial sale, with potential revenue of over six times Bophelo’s estimated cultivation costs, leads Halo to believe that Bophelo can become profitable in 2021.” He continues. “Step by step, we are now able to unlock the full potential, as a result of our growing space of up to 200 hectares and experience the Company has accumulated over the last four years in Oregon, California and Nevada.”
About Halo Collective
Halo is a leading, vertically integrated cannabis company that cultivates, extracts, manufactures, and distributes quality cannabis flower, oils, and concentrates and has sold approximately nine million grams of oils and concentrates since inception. Halo continues to evolve its business and scale efficiently, partnering with trustworthy leaders in the industry, who value the Company’s operational expertise in bringing top-tier products to market. Current growth includes expansion in key U.S. markets, the United Kingdom and Africa, with planned expansion into the Canadian retail market.
Halo is led by a strong, diverse, and innovative management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California and Oregon. The Company sells cannabis products principally to dispensaries under its brands, Hush, Mojave, and Exhale, and under partnership or license with OG DNA Genetics, Terphogz (doing business as Zkittlez™) and FlowerShop*, a cannabis lifestyle and conceptual wellness brand in which G-Eazy is a partner and key member of Flowershop*.
As part of continued expansion and vertical integration in the U.S., Halo boasts several grow operations throughout Oregon and California. In Oregon, the Company has a combined 7 acres of outdoor cultivation, including East Evans Creek, a six-acre grow site in Jackson County, and Winberry Farms, a one-acre grow site located 30 miles outside Eugene in Lane County. In California, the Company is building out Ukiah Ventures; a planned 30,000-square-foot indoor grow, processing, and manufacturing facility including up to an additional five acres of industrial land to expand. Recently, Halo partnered with Green Matter Holding to purchase Bar X Ranch in Lake County, developing up to 80 acres of cultivation which would comprise the largest grow in Northern California.
Internationally, the Company’s subsidiary Bophelo is currently cultivating cannabis in Lesotho, which holds one of the most extensive marijuana cultivation licenses in Africa with a future capacity of up to 495 acres. To further Halo’s global presence, the Company has recently acquired CBPM importation and distribution licensing in the United Kingdom via cannabis suppliers Canmart Ltd (“Canmart”). Halo expects the cultivation and manufacturing operations of Bophelo, combined with the importation and distribution capabilities of Canmart, to drive a well-positioned business to serve the U.K. market.
The Company also has acquired a range of software development assets, including technology platforms CannPOS, Cannalift, and, more recently, CannaFeels. Halo also owns the discrete sublingual dosing technology, Accudab.
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Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking information may relate to anticipated events or results including, but not limited to the development and prospects of Bophelo’s operations and the distribution of Bophelo’s cannabis products in Africa and Europe, Halo’s planned expansion into the Canadian retail market, the expected size and capabilities of the final facility planned at Ukiah Ventures, the size of Halo’s planned cultivation facility in Northern California and the ability of Bophelo and Canmart to serve the E.U., U.K. and Australian market.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: unforeseen delays or circumstances that prevent the applicable stock exchanges from commencing trading in the Company’s shares or warrants; delays in obtaining required licenses or approvals, delays or unforeseen costs incurred in connection with construction, the ability of competitors to scale operations in Northern California, delays or unforeseen difficulties in connection with the cultivation and harvest of Halo’s raw material, changes in general economic, business and political conditions, including changes in the financial markets; and the other risks disclosed in the Company’s annual information form dated April 16, 2020 and other disclosure documents available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.
This press release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for the sales of cannabis by Bophelo and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Cautionary Note Regarding Forward-Looking Information and Statements” above and assumptions with respect to market conditions, pricing, and demand. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading ” Cautionary Note Regarding Forward-Looking Information and Statements”” above, it should not be relied on as necessarily indicative of future results.
Third Party Information
This press release includes market and industry data that has been obtained from third party sources, including industry publications. The Company believes that the industry data is accurate and that its estimates and assumptions are reasonable, but there is no assurance as to the accuracy or completeness of this data. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there is no assurance as to the accuracy or completeness of included information. Although the data is believed to be reliable, the Company has not independently verified any of the data from third party sources referred to in this press release or ascertained the underlying economic assumptions relied upon by such sources.
i . See below the full cannabinoid results:
|1 Source: Grandview Market Research