MONTREAL –
The Good Shroom Co Inc. (the “Company” or “Good Shroom”) (TSXV: MUSH), which owns and operates a portfolio of brands that include traditional cannabis products as well as mushroom-based wellness beverages, announces it’s first profit since commencement of operations and reports on its financial results for the quarter ended April 30, 2023. Readers should review the quarterly financial statements and the accompanying Management’s Discussion and Analysis available at www.sedar.com.
Q3 – FINANCIAL HIGHLIGHTS
First Profit: Net Profit of $13,660 for Q3-2023.
3X increase in Sales: $1,266,186, compared to $419,397 for Q3-2022; 1.4X increase in sales from previous quarter (Q2-2023), $670,276.
Debt: Long-term debt of $40,000.
“We are pleased with today’s results; brand recognition is increasing sales, bolstering loyalty and we are seeing gains in terms of operational efficiency. We also expect to begin realizing economies of scale into the near future. As we execute on our asset light business model and leverage our network of manufacturing partners, we are moving forward with limited capital assets all the while having the flexibility to rapidly scale up and meet growing sales and consumer preferences.” stated Eric Ronsse, the CEO, “as most of our resources have been geared towards our cannabis division, with good results, sales for wellness beverages (of $29,775 for Q3), remain flat. However, we see growth opportunities for this division as well and we intend on allocating additional resources, to implement a new marketing strategy before calendar year-end.”
Shareholders are encouraged to join the quarterly review webcast taking place Wednesday June 28 at 10.30 am EST via webcast at: us02web.zoom.us/j/81250850118.
Q3 – BUSINESS HIGLIGHTS
New Products:
Habibi Kush (hash) launched in ~25% of Quebec cannabis stores
Transition from ~25% of Quebec cannabis stores to all stores
Le Kush X (hash), Sky Cuddler Kush (dried flower) and Cherry Blossom (dried flower) transitioned in Q3.
New Markets:
The Company breaks into the edibles category with THC infused Beef Jerky named OG Jerk, which launched in all Quebec cannabis stores in February of this year, remaining within the top three selling products of its category in terms of weekly units sold (quebec.weedcrawler.ca/best_sellers).
Approval of CBD capsules in Ontario for August 2023 launch.
Top Products: Afghan Gold Infused Joint is consistently within the top three products in its category in terms of weekly units sold. Afghan Gold hash remains in the top ten
100% Ocean reclaimed plastic is used for some of the Company’s packaging and it expects to continue increasing its use.
EVENTS SUBSEQUENT TO QUARTER
Three new edible cannabis products are expected to launch late summer/early fall in the province of Quebec: crunchy coated peanuts, dried ramen noodle mix and saucissons (cured charcuterie).
Approval from the Alberta Liquor and Gaming Commission to become a vendor in the province with several products expected to be available during the fall of 2023.
Approval of CBD capsules in Ontario for August launch.
Currently, the government of Quebec limits the choices of edibles to ensure that they don’t appeal to children, such as cookies and candies. Consequently, there are few high performing edibles at this time, but management also sees this as an opportunity and expects that the only THC infused beef jerky in Quebec, a commonly consumed savory snack, will continue to appeal to many consumers, as will it’s new edible products expected to be available this summer/early fall. Moreover, the current legal and tax landscape has been increasingly putting pressure on the cannabis industry which has seen low investor returns and several small and large players ceasing operations or undertaking important restructurings in the last 12 months. The current restrictions, in terms of marketing and product offering, as well as tax obligations, have led to shrinking margins and are making it harder to compete with the illicit market. Management expects positive steps will be taken to modernize the legal framework for the benefit of businesses, consumers and the industry following the ongoing legislative review of the Cannabis Act by the Federal Government, and that some of the recommendations made by the Competition Bureau in May of this year, will be reflected, namely reducing marketing restrictions and allowing for more flexibility for THC limits in edibles.
The Good Shroom is well positioned to navigate this evolving landscape as we continue to build on our strengths: product innovation and capital efficiency.
About the Company
MUSH operates a portfolio of brands which include traditional cannabis and beverage products. It exists to promote the use of functional ingredients such as functional mushrooms and cannabis in consumer products. Its line of Teonan beverages are first a quality and tasty beverage but also contain a dose of functional mushrooms and probiotics. Its cannabis division aims to provide customers with good quality products at fair prices.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Corporation with respect to future business activities and sales. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions. Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect the Corporation’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Corporation believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements. Among the key factors that could cause actual results to differ materially from those projected are the following: market acceptance of the Company’s hash and other cannabis products, changes in the vendor’s business or strategy, changes in our supplier’s operations and pricing, expectations regarding competition and their pricing strategy; maintaining in good standing all necessary regulatory licenses and authorizations for its products; the benefits, safety, efficacy, dosing and social acceptance of cannabis related products and no material changes in the legal environment; supply chain disruptions and shortages. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. The Company does not intend, and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law. Trading in the securities of the Company should be considered highly speculative.
