KELOWNA, BRITISH COLUMBIA – August 26, 2020 – Citation Growth Corp. (CSE:CGRO) (OTCQX:CGOTF) (“Citation” or the “Company”), a licensed multi-state cannabis cultivator, producer and retailer, is pleased to announce an update on its Las Vegas operations.
In March 2020, Citation realized the first effects of the global pandemic when it saw the cannabis industry shut down due to government regulations, resulting in a large decline in demand and sales. The company made the decision to remain operational and focus on efficiencies and build the foundation for growth strategies. As the global economy adapted to new business processes, Citation experienced large delays in the product supply chains where normal business processes took days rather than hours. Being a nimble organization, Citation not only adjusted quickly to the new vendor supply chain environment, but also solidified new and synergistic relationships that have greatly enhanced its operational efficiencies and overall quality of input materials.
After a stringent due diligence process, Citation was successful in obtaining a new banking facility by partnering with a Cannabis Compliant Intermediary, who facilitates access to cannabis friendly banking solutions. This opportunity has increased compliance and allowed for access to more traditional lending. Through this Intermediary, Citation has secured an equipment financing loan of $95,585 USD for a period of 12 months with a total interest on repayment amount of 22.5%. The proceeds were dedicated to the purchase of the remaining Fluence Bioengineering VYPR 2P lights required to complete our grow room changeover. The new brand of LED lighting will not only reduce power consumption, but also greatly increase production output, meaning Citation will be able to harvest more of its award-winning Fiore flower while maintaining top-shelf quality of organic cannabis.
With these partnerships created, Citation is also finalizing the implementation of its enhanced growing methodologies, which includes deploying a new organic soil mixture and nutrients. Citation currently has crops growing under these new technologies and organic grow methods with harvests commencing in September 2020 and sales initiatives in place to distribute its products to Nevada dispensaries immediately after packaging. The company has installed time lapse cameras in the grow facility to capture the life cycle of the plants and production to share with stakeholders.
In July 2020, the State of Nevada appointed a Cannabis Compliance Board (“CCB”) to oversee and administer the Cannabis Division in Nevada, previously under the control of The Department of Taxation. The CCB lifted the license moratorium that has been in effect since 2019. This important decision, aimed at improving compliance in cannabis business transactions, allows for licenses to be transferred and sold, which is important for Citation, who owns an extra medical and recreational cultivation license that now may be sold in the Nevada market. As such, Citation is actively looking to purchase a Dispensary License or partner with an existing license holder; an initiative incorporated into the Company’s Growth Strategy released at the April 2020 AGM.
“I am extremely proud of our team,” commented CEO Erik Anderson. “Everyone is working long hours and we have not been deterred by the global pandemic resulting from the COVID-19 virus. Although Nevada retail dispensaries were hit hard by COVID-19 restrictions, we have continued to harvest cannabis and we currently have over 300 pounds of fresh frozen inventory that has been stockpiled throughout the pandemic. We plan to sell the entire lot to a local processor in order to bring our own production facility back online once all the new grow lights are installed. Our team has worked tirelessly to maintain our downstream sales channels in Nevada and we are laser-focused on ensuring that our brands – Fiore flower and Diamante concentrates – continue to be in high demand by cannabis connoisseurs. We have turned the corner as a company and are ahead of schedule to deliver cashflow positive results in our 2021 fiscal year.”
About Citation Growth Corp.
Citation Growth Corp. (CSE:CGRO) (OTCQX:CGOTF) is a publicly traded company that has been investing in the development of medical and recreational cannabis products since 2014. Citation has expanded its operating portfolio to include cultivation, production and retail offerings in our key North American legal jurisdictions Nevada, California, Washington and British Columbia. For more information, please visit www.citationgrowth.com.
For Further Information:
Erik Anderson, President and CEO
1-877-438-5448 Ext 713
Neither the CSE nor its Regulation Services Provider, nor the OTCQX® has approved nor disapproved the contents of this press release. Neither the CSE, nor the OTCQX® accepts responsibility for the adequacy or accuracy of this release.
Cannabis Industry Involvement:
The Company owns marijuana licenses in California and Nevada. Marijuana is legal in each state; however, marijuana remains illegal under United States federal law and the approach to enforcement of U.S. federal law against marijuana is subject to change. Shareholders and investors need to be aware that federal enforcement actions could adversely affect their investments and that the Company’s ability to support continuing U.S.-based operations and its access private and public capital could be materially adversely affected.
The Company’s business is conducted in a manner consistent with state law and is in compliance with applicable state licensing requirements in the U.S. The Company has internal compliance procedures in place and has compliance focused attorneys engaged in jurisdictions to monitor changes in laws for compliance with U.S. federal and state law on an ongoing basis. These law firms inform any necessary changes to our policies and procedures for compliance in Canada and the U.S.
Unlike in Canada which has Federal legislation uniformly governing the cultivation, distribution, sale and possession of cannabis under the Cannabis Act (Canada), readers are cautioned that in the U.S., cannabis is largely regulated at the state level. Notwithstanding the permissive regulatory environment of medical cannabis at some of the state level, cannabis continues to be categorized as a controlled substance under the Controlled Substances Act in the U.S. and as such, cannabis-related practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of cannabis are illegal under U.S. federal law. Strict compliance with state laws with respect to cannabis will neither absolve the Company of liability under the U.S. federal law, nor will it provide a defense to any U.S. federal proceeding, which may be brought against the Company. Any such proceedings brought against the Company may materially adversely affect its operations and financial performance in the U.S. market.
This news release contains forward-looking statements or information that relate to our current expectations and views of future events. These statements relate to future events or future performance. Statements which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, outlook, expectations or intentions regarding the future including words or phrases such as “anticipate”, “objective”, “may”, “will”, “might”, “should”, “could”, “can”, “intend”, “expect”, “believe”, “estimate”, “predict”, “potential”, “plan”, “is designed to”, “project”, “continue”, or similar expressions suggest future outcomes or the negative thereof or similar variations. Forward-looking statements may also include, among other things, statements about the future business strategy; expectations of obtaining licenses and permits; expectations regarding expenses, sales and operations; future customer concentration; anticipated cash needs and estimates regarding capital requirements and the need for additional financing; total processing capacity; the ability to anticipate the future needs of customers; plans for future products and enhancements of existing products; future growth strategy and growth rate; future intellectual property; changes in laws and regulations; regulatory approvals and other matters; and anticipated trends and challenges in the markets in which the Company may operate.
Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the demand for our products; anticipated costs and ability to achieve goals; the Company’s ability to complete any contemplated transactions; historical prices of cannabis; and that there will be no regulation or law that will prevent the Company from operating its businesses; the state of the economy in general and capital markets in particular; present and future business strategies; the environment in which the Company will operate in the future; the estimated size of the cannabis market; and other factors, many of which are beyond the control of the Company. While such estimates and assumptions are considered reasonable by the management of the Company, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. Given these risks, uncertainties and assumptions, the reader should not place undue reliance on these forward-looking statements.
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: management estimated future capital expenditure costs, revenue, and timeframes for operations; business, economic and capital market conditions; the ability to manage the Company’s operating expenses, which may adversely affect the Company’s financial condition; the Company’s ability to remain competitive; regulatory uncertainties; market conditions and the demand and pricing for our products; exchange rate fluctuations; security threats; the Company’s relationships with its customers, distributors and business partners; the Company’s ability to attract, retain and motivate qualified personnel; industry competition; the impact of technology changes on the Company’s products and industry; the Company’s ability to successfully maintain and enforce its intellectual property rights and defend third-party claims of infringement of their intellectual property rights; the impact of litigation that could materially and adversely affect our business; the Company’s ability to manage its working capital; and the Company’s dependence on key personnel. The Company is not a positive cash flow company and it may not actually achieve its plans, projections, or expectations (the Company has a history of losses).
The securities of the Company are considered highly speculative due to the nature of the Company’s businesses.
Important factors that could cause actual results to differ materially from the Company’s expectations include, consumer sentiment towards the Company’s products and cannabis generally; risks related to the Company’s ability to maintain its licenses issued by governments in good standing; uncertainty with respect to the Company’s ability to grow, store and sell cannabis; risks related to the costs required to meet the obligations related to regulatory compliance; risks related to the extensive control and regulations inherent in the industry in which the Company operates; risks related to governmental regulations, including those relating to taxes and other levies; risks related an early stage business and a business involving an agricultural product and a regulated consumer product; risks related to building brand awareness in a new industry and market; risks relating to restrictions on sales and marketing activities imposed by governments; risks inherent in the agricultural business; risks relating to energy costs; risks relating to product liability claims, regulatory action and litigation; risks relating to recall or return of products; and risks relating to insurance coverage; global economic climate; equipment and building failures; increase in operating costs; decrease in the price of cannabis; security threats; government regulations; loss of key employees and consultants; additional funding requirements; volatility in the securities of the Company; changes in laws; technology failures; failure to obtain permits and licenses; anticipated and unanticipated costs; competition; risks associated with the substantial obligations of being a public company; and failure of counterparties to perform their contractual obligations. This list is not exhaustive of the factors that may affect the forward-looking statements. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements.
Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither the Company nor any of its representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this news release. Neither the Company nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to the reader or any person resulting from the use of the information in this news release by the reader or its representatives or for omissions from the information in this news release.