AgriCann Solutions Corp. provided an update to shareholders, noting that its wholly owned subsidiary, Newline Ventures Inc., a micro cultivator and processor located in Vernon, BC, continues as a “bare-bones operation” as existing inventory is being sold off.
AgriCann remains under a “Cease Trade Order” (“CTO”) issued by the BC Securities Commission. The company also operates Craft Nurseries Canada Ltd., a cannabis nursery located in Lake Country, British Columbia.
In April, AgriCann said it would be shutting down new cultivation for a three-month period, “given the buildup of inventory and disruptions at the leadership level,” to allow for “a re-assignment and rationalization of core personnel and to facilitate the processing of harvested flower and related packaging and refocus on developing sales and retail store relations.”
A consultant hired in April at Newline left early without providing recommendations to the board. In February, the company’s CFO resigned, and the accountant brought in at the Newline facility to assume their duties is said to have failed to complete the company’s expected December 31, 2023 Q3 consolidated reporting obligations. The CFO did update Newline’s bookkeeping.
The Company anticipates that it will not have the necessary resources to engage an auditor for its March 31, 2024, fiscal year annual audit, typically a $50,000 engagement demanding upfront payment under the circumstances.
In December 2023, AgriCann’s CEO also stepped down. They had been acting as an RPIC. Founding director and former COO Tim Tombe immediately assumed an interim CEO position.
AgriCann also says that its sales in the Ontario market have entirely shut down since Newline fell behind on excise payments.
In April, the company wrote: “In hindsight, the Company’s long-term growth aspirations as executed over 2023 sacrificed the achievement of steady-state production, revenue and expense coverage. The resulting cash burn became increasingly unfinanceable, given projections regularly missed and goalposts extended. The lengthy Newline acquisition closing delay encountered was a complicating factor. Last-minute cash calls were used to compensate. Simply put, operations required a substantially greater financial commitment than envisioned, which the Company could not effectively raise without key shareholder support. Meanwhile, the cannabis sector was experiencing its own challenges and dislocation, with significant investor distress and aversion.”
For the six months ended September 30, 2023, AgriCann reported a net loss from operations of $837,520 and revenue of $3,118.
