WINNIPEG, Manitoba, Nov. 13, 2019 (GLOBE NEWSWIRE) -- DELTA 9 CANNABIS INC. (TSX: DN) (OTCQX: VRNDF) (“Delta 9” or the “Company”), is pleased to announce financial and operating results for the three-month and nine-month period ending September 30, 2019.

Financial Highlights for Q3, 2019

• Operating revenues of $6.7 million for the third quarter of 2019, up 432%, from $1,251,213 for the same quarter last year.
• Adjusted EBITDA¹ was $(849,760) compared to $(2,551,710) in Q3, 2018.
• Gross profit² of $2.0 million for the third quarter of 2019, up 550%, from $312,480 for the same quarter last year.
• Gross profit margin was 31% for Q3, 2019.

Financial Highlights for the nine months of 2019

• Record operating revenues of $21.2 million, up 821%, from $2.3 million for the same period last year.
• Gross profit² of $6.8 million, up 799%, from $756,644 for the same period last year.
• Gross profit margin was 32% for the nine months of 2019.

“Management would point to the significant year over year increases in net revenue as a positive indication that the Company’s initial quarters of sales in the recreational use cannabis market have been able to contribute significant revenue growth,” said John Arbuthnot, CEO of Delta 9. “Management attributes the decrease in sequential quarterly revenue to a timing issue with revenue in its business to business (B2B) division which was down from the 2^nd quarter of 2019.”

The Company’s retail division generated $4.4 million in revenue in the 3^rd quarter of 2019 which was up 24% or $840,208 sequentially. The wholesale division generated $2.2 million in revenue for the same period and was down 23% or $684,138.

“Delta 9 will continue to drive sustainable long-term shareholder value by leveraging its strong brand positioning in Western Canadian markets, expanding our various wholesale supply contracts and scaling up our cultivation operations,” said John Arbuthnot, CEO of Delta 9. “We are taking a responsible and compliant approach to growing our business to build an authentic Delta 9 brand as we pursue retail opportunities in the Western Canadian market place.”

¹ The Company’s “Adjusted EBITDA” is a measure used by management that does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be comparable to similar measures presented by other companies. Management defines the Adjusted EBITDA as the income (loss) from operations, as reported, before interest and tax, adjusted for removing share-based compensation expense, depreciation and amortization, and the fair value effects of accounting for biological assets and inventories. Management believes that Adjusted EBITDA, and the attribution of Adjusted EBITDA in the manner described above, provides meaningful and useful financial information as these measures demonstrate the performance of the Company’s operating businesses.
² The Company’s “gross profit” Is calculated before adjustments for changes in biological assets.

3^rd Quarter Operational Highlights

• The company entered into a binding letter of intent to acquire two retail stores in Alberta that continues the strategy of establishing a chain of Delta 9 branded retail stores across Canada. Delta 9’s goal is to add an additional 12 retail stores over the next 24 months.
• The newest Delta 9 Cannabis Store is the largest cannabis retail store in the Thompson, Manitoba area, offering customers an open and modern shopping décor, highly trained staff and a wide range of products, including dried cannabis flower, cannabis oil and a full assortment of cannabis accessories.
• The Company installed and began crop production of cannabis in an additional 48 of its proprietary “Grow Pods”, bringing its total number of Grow Pods in production to 202 within its Winnipeg production facility (the “Delta Facility”).
  • The additional 48 Grow Pods will increase production by 1,150 kilograms per year of dried cannabis flower production, bringing the Company’s overall anticipated production capacity to 5,350 kilograms of dried cannabis flower per year.
• There is another 95 Grow Pods in place and ready for planting once Delta 9 receives approval from Health Canada, which is expected shortly. This will bring the total Grow Pods in production to 297 within the Delta Facility.
  • The Company is continuing with its planned Phase II expansion of the Delta Facility to increase cannabis production to 16,500 kilograms per year.
• After successfully passing all inspections, Delta 9 received a renewal of its cannabis cultivation license for a three-year term after fulfilling Health Canada's rigorous specifications.

Summary of Quarterly Results:

Consolidated Statement of Net Loss	Q3 2019	Q2 2019	Q1 2019	Q4 2018
Revenue	$6,662,137	$8,886,155	$5,632,184	$5,270,217
Cost of Sales	4,628,070	5,936,975	3,815,930	4,015,644
Gross Profit Before Unrealized Gain From Changes In Biological Assets	2,034,067	2,949,180	1,816,254	1,254,573
Unrealized gain from changes in fair value of biological assets (Net)	1,388,863	586,366	2,406,735	2,087,367
Gross Profit (Loss)	$3,422,930	$3,535,546	$4,222,989	$3,341,940
Expenses
General and Administrative	2,681,388	3,075,803	3,451,900	3,296,351
Sales and Marketing	1,151,158	1,324,537	969,202	1,389,241
Share Based Compensation	215,456	244,848	748,067	807,834
Total Operating Expenses	$4,048,002	$4,645,188	$5,169,169	$5,493,426
Adjusted EBITDA (Loss) 1	(849,760)	(663,705)	(1,978,778)	(2,815,412)
Income (Loss) from Operations	$(625,072)	$(1,109,642)	$(946,180)	$(2,151,486)
Other Income/ Expenses	$(642,190)	$(206,231)	$17,260,525	$69,033
Net Income (Loss)	$(1,267,262)	$(1,315,873)	$16,314,345	$(2,082,453)
Basic and Diluted Earnings (Loss) Per Share	$(0.02)	$(0.01)	$0.19	$(0.02)

1. Adjusted EBITDA is a non-IFRS measure, and is calculated as earnings before interest, tax, depreciation and amortization, share-based compensation expense, fair value changes and other non-cash items.

The following chart provides a breakdown of the Company’s revenue by segment:

Revenue from the Sale of Cannabis	Three-month period ending September 30, 2019	Three-month period ending June 30, 2019
Wholesale Cannabis Revenue	$2,233,509	$2,917,647
Retail Cannabis Revenue	4,359,614	3,519,406
Medicinal Cannabis Revenue	66,770	87,416
Revenue from Other categories
Business to business activities	222,944	2,165,167
Merchandise and cannabis devices	158,721	184,164
Other	31,010	62,976
Sub total	$7,072,568	$8,936,776
(Less) Excise Taxes	410,431	50,621
Net Revenue	$6,662,137	$8,886,155

Discussion of Operations:

Key Performance Indicators	For the three-month period ending September 30, 2019	For the three-month period ending June 30, 2019
Production/ Wholesale Unit
Total Grams Produced	871,516	675,233
Direct Production Cost Per Gram*	$1.08	$1.05
Total Cost Per Gram**	$1.21	$1.21
Total Grams Released for Sale	519,596	565,599
Total Grams Sold (Medical and Recreational)	548,981	527,693
Avg Selling Price per Gram	$4.19	$5.63
Retail Unit
Total Grams Sold (Retail)	349,410	282,336
Avg Selling Price per Gram	$12.47	$12.42
Number of Transactions Processed	108,438	84,882
Avg Transaction Size	$41.67	$41.46

*Direct Production Cost per gram includes direct labour, nutrients, utilities, growing materials and supplies costs

**Total Cost per gram includes Direct Production Cost per gram plus processing labour, packaging, bottling, and labelling costs

A comprehensive discussion of Delta 9’s financial position and results of operations is provided in the Company’s Management Discussion & Analysis for the third quarter and nine months of 2019 filed on SEDAR and can be found at www.sedar.com.

Q3 Results 2019 Conference Call

Delta 9 has scheduled a conference call to discuss the results for third quarter of 2019. The conference call will be hosted November 14, 2019 at 9:00 a.m. Eastern Time by John Arbuthnot, Chief Executive Officer and Jim Lawson, Chief Financial Officer, followed by a question and answer period.

DATE:	November 14, 2019
TIME:	9:00 a.m. Eastern Time
DIAL IN #	1-888-886-7786
REPLAY:	1-877-674-6060 Available until 12:00 midnight Eastern Time, February 28, 2020
REPLAY PASSCODE:	107644 #

Grant of Stock Options

Delta 9 also wishes to announced that it has granted, effective today, an aggregate of 3,000,000 stock options (each an "Option") to certain directors, officers, employees and consultants of the Company in accordance with the Company’s current stock option plan. Each Option is exercisable into one common share (a "Share") of the Company at a price of $0.55 per Share for a period of five years from the date of grant, being today. The Options will vest over twelve months, with 1,500,000 (50%) vesting six months from the date hereof and the remaining 1,500,000 (50%) vesting 12 months from the date hereof.

“Stock Options play a key role in compensating our employees and aligning their interests with those of the shareholder,” said John Arbuthnot, CEO of Delta 9, “Delta 9 has an inclusive options program which allows for all eligible staff to receive options based on their position and performance. We are very proud of our staff’s operating performance to date; this grant will allow for over 185 eligible staff to receive stock options in Delta 9.”

For more information contact:

Investor & Media Contact:
Ian Chadsey VP Corporate Affairs
Mobile: 204-898-7722
E-mail: ian.chadsey@delta9.ca

About Delta 9 Cannabis Inc.

Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. The company sells cannabis products through its wholesale and retail sales channels and sells its cannabis grow pods to other businesses. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the Toronto Stock Exchange under the symbol "DN" and on the OTCQX under the symbol "VRNDF". For more information, please visit www.delta9.ca.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this news release include statements relating to the expansion of Delta 9’s wholesale supply contracts and scaling up its cultivation operations. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including all risk factors set forth in the annual information form of Delta 9 dated April 30, 2019 which has been filed on SEDAR. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.