SugarBud Craft Growers Corp. (TSXV:SUGR) (OTC:RLLRF), an up-and-coming Canadian cannabis company that expects to receive a cultivation license from Health Canada by the end of Q1, just completed its 29,800 square foot vertical cannabis cultivation facility in Stavely, Alberta.
In a recent update to shareholders, the company released a sneak peek at the cultivation facility, as well as additional details regarding its Health Canada licensing progress.
The SugarBud Craft Growers Facility
SugarBud has completed the construction of the facility’s exterior and inner walls, including the installation of key electrical, plumbing, and mechanical equipment, and occupancy of the Facility is expected in February 2019.
Phase 1 of the Facility is comprised of 29,800 total square feet of floorplate, including eight ~2,150 square foot cannabis flowering rooms totaling ~17,500 square feet of floorplate. The ceilings of the flowering rooms are 28’ tall, allowing for up to four layers of flowering canopy in each grow room.
SugarBud estimates that under a full development scenario with four layers of flowering canopy, Phase 1 of the Facility will have up to 37,000 square feet of flowering canopy. At a metric of 50 grams per square foot of flowering canopy per crop, and five crops per year, this equates to up to an estimated 9,500,000 grams of dried cannabis flower production per year.
The facility as it stands today was completed at a cost of approximately $7.8 million CAD, which was approximately $500,000 more than the budgeted amount. Spent wisely, the additional expenditures were primarily attributable to design alterations that allow for future expansion capabilities, including Phase 2 of the facility.
What’s Coming at SugarBud Craft Growers
SugarBud anticipates that it will receive a cultivation license from Health Canada by the end of Q1, 2019. Upon the receipt of a cultivation license, SugarBud will commence cultivation in its first two partially equipped grow rooms. SugarBud will then begin to equip the remaining six flowering rooms, capital permitting, until the entire Facility is in full production. SugarBud plans to have Phase 1 in full production by the end of 2019.
SugarBud’s vertical grow method with four layers of flowering canopy is anticipated to result in a 211% flowering canopy to flowering floor plate ratio. This high utilization of square footage maximizes revenue per square foot of floor plate and minimizes capital costs per square foot of flowering canopy. For reference, if SugarBud were to utilize a single layer of flowering canopy, it’s flowering canopy to flowering floor plate ratio would reduce to 53%.
Phase 2 of the Facility is estimated to be comprised of 12 additional flowering rooms totaling approximately 26,000 square feet of floorplate, up to 55,500 square feet of flowering canopy, and up to an estimated 14,000,000 grams of dried flower production per year (at the same 50 grams per square foot of flowering canopy per crop, and five crops per year). See below for a summary of these figures.
|Layers of Flowering Canopy (#)||Flowering Canopy (Square Feet)||Estimated Annual Dried Cannabis Flower Production (Grams)|
On February 7th and 8th, a professional film crew will be shooting an attestation video for Health Canada. This video will outline the readiness of the facility for the cultivation of cannabis and the integrity of the Facility’s security protocols. The video is one of the final steps to be taken prior to the receipt of the company’s cultivation license from Health Canada.
SugarBud Craft Growers’ Timeline Summary
Subject to change, this timeline is based on SugarBud Craft Growers’ current internal estimates:
- Base Building: Completed.
- Health Canada Attestation Video: February 7 and 8, 2019.
- Building Occupancy: February 28, 2019.
- Flowering Rooms 1 and 2 (Partial): March 15, 2019.
- Cultivation License: Expected Q1, 2019.
- Flowering Rooms 3 – 8: December 31, 2019.
While all of these dates are subject to change, it looks like SugarBud has a concise timeline to get the company operational and revenue-producing as soon as possible.
Based on the fact that the company went over-budget on the base facility and still has a lot of CapEx on the horizon, don’t be surprised if dilution from additional financing rounds comes along with it. In the meantime, be sure to subscribe to updates here so you never miss an important development.
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