Skip to main content

TGOD earns first revenue, amid construction delays and large losses

The Green Organic Dutchman, a $1.4-billion company with only 7,000 square feet of licensed grow space in Canada, posted its first revenue in the fourth quarter of 2018. TGOD’s recently acquired Polish subsidiary, HemPoland, sold $1.9-million worth of hemp products in the fourth quarter. TGOD itself, which went public last year amid considerable retail investor excitement, has still has not sold any cannabis in Canada, medical or recreational.

The company posted a net loss of $18-million in the fourth quarter and a $45.2-million net loss for the year. Included in the company’s expenses was $6-million on marketing in 2018, including $4.6-million “promoting the Company’s brand and consumer market research.”

The company’s two large facilities are still under construction and remain far from complete. Only $36-million of an expected $175-million has been spent on TGOD’s 49-per-cent-owned greenhouse project in Valleyfield, Que., according to the company’s MD&A. Around $14.5-million of an expected $30-million has been spent on its greenhouse facility near Hamilton, Ont. The Hamilton building faces further challenges after Hamilton city council voted against a rezoning application required for the expansion last summer. According to the Hamilton Spectator, construction on the site continues, after TGOD submitted an application claiming it planned to grow potted mum flowers in the greenhouse.

Go deeper: ‘Our legalization is really this year’: Valens GroWorks’ EVP on extracts

The last four months of 2018 saw Aurora Cannabis Inc., TGOD’s much-touted partner and investor, begin severing ties with the company. Aurora’s chief corporate officer Cam Battley, stepped down from TGOD’s board in September. Aurora has sold nearly 11 million of its TGOD shares since October, although it still controls roughly 10.7 per cent of the company.

– Mark Rendell

Valens increases size of bought deal

Investor interest in financing Valens GroWorks appears larger than the cannabis extractor initially thought. Kelowna, B.C.-based Valens announced plans Tuesday to raise $30-million in a bought deal, valuing the company’s shares at $2.95 apiece.

On Wednesday, however, Valens said it would be increasing that offering to $37.5-million, with an overallotment option to raise an additional $5.6-million for a potential total of more than $43-million. The money will primarily go towards expansions, with Valens recently starting the process of tripling its annual production capacity to 240,000kg of cannabis extracts ahead of cannabis concentrates, edibles and vape products becoming legal later this year.

AltaCorp Capital, partially owned by the Alberta government, will serve as lead underwriter and sole bookrunner for the deal, with GMP Securities, Raymond James, Haywood Securities and Mackie Research also providing underwriting services. The offering is expected to close by April 9.

– Jameson Berkow

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 21/05/24 4:00pm EDT.

SymbolName% changeLast
ACB-T
Aurora Cannabis Inc
-3.28%9.72

Interact with The Globe