Fri | Feb 28, 2020

Epican partner reports pleasing sales for the medical ganja retailer

Published:Friday | May 24, 2019 | 12:15 AM
The Silver OG, a medical marijuana product sold by Epican.

Epican Medicinals Limited, a Jamaican retailer of medical marijuana, plans wider distribution with an eventual push for online sales, according to its partner in Canada, The Green Organic Dutchman, TGOD.

TGOD also disclosed that Epican earned CDN$500,000 ($50 million) in local sales over three months ending March 2019.

“Epican plans five stores and, in combination with online ordering, these facilities will serve the needs of Jamaica’s 3.0 million residents and over 3.5 million annual visitors,” said TGOD CEO Brian Athaide in a teleconference with shareholders on Tuesday.

Epican operates its flagship herb house in Kingston with farms in the Blue Mountains. Earlier this month, the company opened its second herb house in Montego Bay, and will roll out three more in different parts of Jamaica in the coming months.

Epican’s website currently features a section for products, but it is not populated with items.

In its financials, TGOD lauded Epican for achieving nearly CDN$475,000 in sales in three months. Over six months, between July and December 2018, its sales amounted to C$757,000.

The TGOD report offers the first glimpse of the type of revenue that Jamaica’s licensed retailers of medicinal marijuana can generate.

Requests to Epican for comment were unanswered.

The Green Dutchman operates cannabis businesses in Canada, Jamaica and Europe, and a beverage business in the United States. The company holds a 49 per cent stake in Epican, under a deal struck in July 2018 in which TGOD purchased 5.75 million shares of Epican for CDN$8.3 million, as disclosed in its latest financials.

Epican’s book value at March 2019 was CDN$28.6 million, of which TGOD’s share would be roughly CDN$14 million.

Despite growing sales in a expanding cannabis market, both Epican and TGOD recorded losses due to buildout costs and fees.

“The net loss improved by CDN$4 million compared to the previous quarter as a result of increasing sales in Poland and stronger net results from Epican in Jamaica rolling into TGOD’s financials; management also maintained a disciplined approach to operational costs as it ramps up for commercialisation of the products in Canada,” TGOD said.

TGOD – now in its second quarter of generating revenues following legalisation of marijuana in Canada during the fall of 2018 – made CDN$2.4 million in sales and a CDN$14-million net loss for the quarter ending March 2019.

TGOD remains strong on cash with CDN$174 million. The company reported total assets of CDN$470 million up to March, with equity of CDN$411 million. TGOD expects to be EBITDA-positive by the first half of 2020.