- New Leaf Ventures (NLV) is selling some of its cultivation equipment amid an over saturation in the region’s cannabis market, the company said Tuesday
- The Vancouver-based cannabis company is also downsizing some related personnel
- It is dissolving its master lease on the facility currently used for cultivation by the license holder and declining an option to purchase a producer license
- New Leaf says it is making the moves “to reduce redundant overhead, add capital and stabilize margins”
- New Leaf Ventures is unchanged, trading at $0.045 at 10:30 am ET
New Leaf Ventures (NLV) is selling some of its cultivation equipment amid an over saturation in the region’s cannabis market, the company said Tuesday.
The Vancouver-based cannabis company is also downsizing some related personnel.
The company also said it is dissolving its master lease on the facility currently used for cultivation by the license holder. It has also declined an option to purchase the producer license from New Leaf Enterprises, allowing it to sell the license to a third-party producer in Washington state.
The over-saturation of the regional market resulted in lower margins and sales volume regionally.
New Leaf says it is making the moves “to reduce redundant overhead, add capital and stabilize margins.”
The sale of certain assets will also bring an influx of capital.
“The region’s oversaturated cannabis production conditions has led to [the decisions],” the company said in a news release.
The company will now shift its operational focus from production and cultivation through the infusion of asset-divested cash to increase the strategic focus on its growth-oriented distribution model.
“We are finding high quality biomass for less cost than we can grow in our facility. There are dozens of partner farms that do incredible jobs at growing biomass that don’t have the distribution capabilities and brand reach that we can perform. By eliminating the cost fluctuation of over-saturation and harvest yields we can purchase at a fixed cost. This allows us to control our margins. Also, with a focus on ancillary products the cost of active THC and CBD distillate continues to go down making these products more profitable,” said New Leaf President and Co-Founder Boris Gorodnitsky.
New Leaf Ventures is unchanged, trading at $0.045 at 10:30 am ET.
