Zenabis Receives Cultivation License for Zenabis Langley, Increasing Total Licensed Annual Cultivation Capacity by More Than 30%

VANCOUVER, Aug. 6, 2019 /CNW/ - Zenabis Global Inc. (TSX:ZENA) ("Zenabis" or the "Company") is pleased to announce the receipt of its cultivation license from Health Canada for Zenabis Langley.

Highlights:

• The cultivation license received on August 2, 2019 adds 9,900 kg of licensed annual cultivation capacity at Zenabis Langley (Site A – Part 1);
• This license increases total Zenabis licensed annual cultivation capacity from 32,900 kg to 42,800 kg of dried cannabis, an increase of more than 30%
• Zenabis has now secured the Health Canada licenses required for all four of its cannabis facilities with 438,200 square feet of current licensed operational space; and
• Construction continues on Site A – Part 2, representing 86,200 kg of annual design cultivation capacity.

Zenabis Langley features a highly advanced production environment that supports both growing and packaging operations for both bulk and retail products. Zenabis Langley will employ more than 200 staff after Site A is complete. Leveraging a closed greenhouse system, cultivation techniques from Zenabis Atholville, and extensive cultivation automation, the Company expects Zenabis Langley to achieve a product quality comparable to that of output from Zenabis Atholville, an indoor facility, at a cultivation cost per gram of $0.75 or less. 

Andrew Grieve, Chief Executive Officer of Zenabis, stated, "We are pleased to receive this cultivation license, which increases our licensed annual cultivation capacity by nearly one third. Year-to-date, we have increased our licensed annual cultivation capacity more than eight-fold on a design capacity basis, which excludes our consistent, and consistently increasing, outperformance. Of additional note, we believe that the receipt of the Zenabis Langley cultivation license in less than one month from the point of submission is a testament to both the quality of our facilities and the strength of our regulatory team." 

"On behalf of everyone at Zenabis, I would like to thank the community of Langley for supporting us, our licensing and construction teams, the contractors, and the service providers that made this milestone possible," continued Mr. Grieve.             

2019 Full Year Harvest Forecast – Zenabis Atholville, Zenabis Stellarton and Zenabis Langley Site A – Part 1

Now that Zenabis has received a cultivation license for Zenabis Langley, the Company is pleased to provide an update to its harvest schedule for the remainder of 2019 that includes the first flower room at Zenabis Langley (Site A – Part 1). Zenabis expects to produce approximately 17,679 kg from July 2019 through December 2019.

In addition, in light of recent outperformance at Zenabis Atholville, and known harvest performance to date for July, Zenabis would like to provide a forecast update for Zenabis Atholville. While there is not yet sufficient data available from the entire Zenabis Atholville facility to update facility design capacity, Zenabis is updating the forecast for the remainder of the year for Zenabis Atholville taking into account the following:

1. Rooms already harvested in July;
2. Room availability and scheduled flower dates for the remainder of the year, including for both Phase 2B and Phase 2C; and
3. The average outperformance ratio experienced during the second quarter for Atholville, this approach is equivalent to a facility design capacity of 46,300 kg.

	July 2019	Aug 2019	Sept 2019	Oct 2019	Nov 2019	Dec 2019	Total
Zenabis Atholville and Zenabis Stellarton	1,212 kg	1,579 kg	1,731 kg	3,758 kg	3,549 kg	4,200 kg	16,029 kg
Plus: Zenabis Langley Site A – Part 1	Nil	Nil	Nil	Nil	1,650 kg	Nil	1,650 kg
Equals: Updated Forecast^1	1,212 kg	1,579 kg	1,731 kg	3,758 kg	5,199 kg	4,200 kg	17,679 kg

¹This forward-looking estimate of future harvest results is based on the following material assumptions: (1) Zenabis Stellarton and Zenabis Langley Site A – Part 1 operate at their published design capacity on a room by room basis for the cultivation space that is licensed and in cultivation at the forward-looking periods noted; (2) Atholville rooms operate based on the current flower schedule and outperform design capacity by 35% (based on the average from the second quarter of 2019); (3) Atholville July cultivation is a combination of already harvested, dried and trimmed output, together with the minimum possible dry weight that would result from the already-harvested wet weight; and (4) Cultivation commencement at Zenabis Langley Site A – Part 1 in August 2019.

The updated forecast cultivation output from July 2019 through December 2019 of 17,679 kg represents an increase of more than 53% relative to the prior forecast of 11,560 kg.

Zenabis intends to provide a monthly cultivation forecast for Zenabis Langley Site A – Part 2 upon receipt of the requisite cultivation license amendment.

Zenabis Delta

Zenabis is currently in the process of converting to an extraction, post-processing and analytical testing lab at Zenabis Delta. As previously disclosed in the May operational update news release, in order to progress the conversion of the Zenabis Delta facility, Zenabis has suspended the limited growing activities that it had at this site (100 kg of licensed annual cultivation capacity). Zenabis has also relinquished the pursuit of EU-GMP cultivation at Zenabis Delta to concentrate on analytical testing, post-processing, and extraction. The expected extraction capacity at Zenabis Delta is 165,600 kg. This conversion project, along with completion of a full ISO certified analytical laboratory, is expected to be complete in the fourth quarter of 2019.  In parallel, Zenabis expects cultivation at its Atholville site to be operating in accordance with EU-GMP standards in Q4 2019 and is working towards full certification in H1 2020.

About Zenabis

Zenabis is a significant Canadian licensed cannabis cultivator of medical and recreational cannabis, and a propagator and cultivator of floral and vegetable products. Zenabis employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Delta, Aldergrove, Pitt Meadows and Langley, British Columbia; and Stellarton, Nova Scotia. In addition to gaining technologically advanced knowledge of plant propagation, the recent addition of state-of-the-art greenhouses in Langley, Pitt Meadows and Aldergrove provides Zenabis with 3.5 million square feet of facility space that can, if fully converted, be dedicated to cannabis production.

If all facility space at Zenabis Atholville, Zenabis Stellarton, Zenabis Delta and Zenabis Langley is fully converted and dedicated to production, Zenabis will own, and have access to 660,000 square feet of high quality indoor cannabis production space, as well as 2.1 million square feet of greenhouse cannabis production space at its Langley facility, with this production strategically positioned on Canada's coasts. Zenabis expects these facilities to have an annual design capacity of 131,200 kg of dried cannabis by the third quarter of 2019. These facilities, if fully built out and converted for cannabis production, would have an annual design capacity to yield approximately 478,800 kg of dried cannabis annually, for both national and international market distribution. An additional 700,000 square feet of greenhouse space will be used to continue the existing propagation business and produce industrial hemp, and can be converted to cannabis production at such a time that is beneficial to the strategic position of the Company. The Zenabis brand name is used in the cannabis medical market, while the Namaste and Blazery brand names are used in the cannabis adult-use recreational market, and the True Büch brand name is used for Zenabis' kombucha products.

Forward Looking Information

This news release contains statements that may constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information may include, among others, statements regarding the future plans, costs, objectives or performance of Zenabis, or the assumptions underlying any of the foregoing. In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the projected kilogram yield of licensed facility space and facility space in the process of, or scheduled for, construction and/or licensing; our expectations for future harvests; the expected timing and completion of current and planned conversion, expansion and optimization of our facilities, including Zenabis Langley; our staffing intentions and needs at Zenabis Langley; the product quality of cannabis produced at Zenabis Langley; the expected costs of cultivation at Zenabis Langley; our plans for Zenabis Delta; the expected submissions of license amendment applications and site evidence packages; the licensing of our facilities and projected timing thereof; the anticipated harvesting of industrial hemp. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur. Forward-looking information is based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond Zenabis' control. These risks, uncertainties and assumptions include, but are not limited to, those described in the shelf prospectus dated April 9, 2019, a copy of which is available on SEDAR at www.sedar.com and could cause actual events or results to differ materially from those projected in any forward-looking statements. Furthermore, any forward-looking information with respect to available space for cannabis production is subject to the qualification that management of Zenabis may decide not to use all available space for cannabis production, and the assumptions that any construction or conversion would not be cost prohibitive, required permits will be obtained and the labour, materials and equipment necessary to complete such construction or conversion will be available. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Zenabis does not intend, nor undertake any obligation, to update or revise any forward-looking information contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws

For more information, visit: https://www.zenabis.com. 

SOURCE Zenabis Global Inc.

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