All Figures in U.S. Dollars Unless Otherwise Stated
April 27, 2020
TORONTO–(BUSINESS WIRE)–Halo Labs Inc. (“Halo” or the “Company“) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) is pleased to announce that the Company made its first sale of distillate that was cleaned using the Company’s proprietary Superfiltration pilot program at Coastal Harvest in Cathedral City, California. Halo Labs intends to scale this process up to one hundred liters per week, which triples current capacity.
For the initial launch, Halo plans to use its Superfiltration process to clean the Company’s own previously written off waste product (approximately 1.35 million grams). Then the Company plans to offer superfiltration cleaning to other manufacturers and distributors as a tolling service. Halo also plans to purchase oils and concentrates from other manufacturers and distributors at reduced rates with the intent of reselling cleaned bulk distillate to vape cartridge and edibles companies as well as using this bulk distillate for Halo’s Hush™ product lines.
Coastal Harvest achieved a gross margin of 26% for the nine months ended September 30, 20191 which primarily came from bulk distillate sales. In October 2019 the Company temporarily suspended bulk distillate manufacturing at Coastal Harvest as result of this market segment’s collapse due to the vape-inflicted lung injury outbreak, which was referred to as EVALI (E-cigarette or vaping associated lung injury), and which resulted in various local and state governments banning the sale of vaporizers. While operations ceased, the Company devoted scientific and engineering resources to develop the proprietary Superfiltration process. As market conditions improved in Q1 2020, Halo re-opened the Cathedral City facility emphasizing Superfiltration with the intent to increase gross margin contribution closer to the 40% range. Halo anticipates it can achieve these financial results by reclaiming starting materials that were previously written off as well as through tolling other cannabis manufacturers’ previously worthless bulk distillate.
Chad Kanner, Senior Vice President of Business Development commented, “Today we made our first sale of bulk distillate cleaned using our proprietary Superfiltration platform. This top grade distillate, which tested by an independent certified lab at over 92% purity of total THC, was made from discarded fats and waxes. This sale shows that our pilot program has not only been successful but that we are gaining confidence in our ability to scale this program and make it one of the Company’s key revenue streams. Further the company has been receiving substantial inbound inquiries about potential purchasing. We feel this pilot program can become a core part of our company operations in California and beyond.”
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows and extracts and processes quality cannabis flower, oils, and concentrates and has sold over 5 million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products and now via verticalization in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, the Company entered into binding agreements to acquire a dispensary in Los Angeles, 3 KushBar branded dispensaries, 5 development permits in Alberta Canada, and Canmart Limited which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada while having an international presence in Lesotho within a planned 205-hectare cultivation zone via Bophelo Bioscience & Wellness (Pty) Ltd. as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
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”. The forward-looking information and forward-looking statements contained herein may include, but is not limited to, statements regarding first sale of bulk distillate utilizing the Company’s Superfiltration process, potential applications of this technology, impact on sales of this technology and driver of profitable revenue.
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. 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.
1 See Halo Labs Inc., Management Discussion and Analysis, three and nine months ended September 30, 2019 (page 6)