Ontario-based The Green Organic Dutchman (TGOD) announced a new construction timetable this week that significantly scales back its expected 2020 production capacity, while maintaining its goal to be profitable by the second half of next year.
Earlier this month, the cannabis producer warned that it may have to revise the construction schedule for its facilities if it was unable to obtain financing on reasonable terms.
Analysts say the problems facing The Green Organic Dutchman may start cropping up in Canadian producers facing similar circumstances.
However, the company on Friday slashed that estimate to 20,000-22,000 kilograms next year.
“We will optimize our operating efficiency by deferring excess capacity and expenses, whether they center on production facilities, international expansion projects or technology,” CEO Brian Athaide said in a news release.
The company estimates it will need 70 million-80 million Canadian dollars ($53 million-$61 million) by the end of June 2020.
TGOD’s Ancaster site will be fully completed by the end of 2019 with a planned annual production of roughly 12,000 kilograms in 2020. That’s lower than the company’s previously planned 17,500 kilograms.
The company’s site in Valleyfield, Quebec, faces more serious delays. The new plan calls for just four grow rooms producing 10,000 kilograms in 2020.
Previous disclosures called for Valleyfield’s 1a and 1b expansions to produce 65,000 kilograms, respectively, starting in 2020.
TGOD said it has the ability to “easily” scale up production at both facilities as more retail locations open.
Green Organic Dutchman’s shares, traded as TGOD on the Toronto Stock Exchange, have fallen about 85% in the past year.