BLVD CENTERS ANNOUNCES EXPANSION INTO THE MARIJUANA MARKET WITH A PLAN TO MONETIZE CERTAIN MARIJUANA STRAINS, AS WELL AS OFFERING CRAVING MANAGEMENT PRODUCTS FROM ITS NEW MARIJUANA COMPANION PRODUCT LINE WEEDAIDE™
Third Quarter Financial Results; Highlights 9% Quarterly Revenue Growth; Update on Treatment Center Expansion
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LOS ANGELES, CALIFORNIA (January 30, 2018) – BLVD Centers Corporation (“BLVD” or the “Company”) (TSXV:CXV), a leading company in the United States addiction recovery industry, today announced it has expanded its services into marijuana lifestyle management, including plans to monetize certain marijuana strains in California, Colorado, Oregon and Washington, as well as plans to sell products designed to reduce the side effects of daily marijuana use.
The Company also released its third quarter financial statements and provided an update on its additional planned traditional treatment centers.
As part of a larger treatment strategy for daily marijuana users that do not have addiction to other drugs, the Company is identifying marijuana strains that may have reduced side effects. The company plans an added revenue line to monetize these strains.
Additionally, the Company has also developed Weedaide™, a series of nutraceutical products taken in pill form to help reduce the side effects of marijuana use. Weedaide will initially be offered in three formulas. The formulas for these products do not require US FDA (Food and Drug Administration) approval and can be sold to the public upon launch, expected in the coming quarters.
To protect its competitive advantage, the Company will disclose more information about the financial impacts of these plans simultaneously to launching these new revenue lines to the California, Oregon, Washington and Colorado markets.
“I am excited to be expanding our business by focusing on the new, large and unique market for marijuana addiction and management,” said Mr. Chris Heath, CEO of the Company. “With the passage of new laws, the marijuana market is suddenly very large in the US and the need for many people to manage certain negative side effects, and the products they will use to do that, will be its own very large market that by-and-large does not exist today.”
“I believe management of marijuana use and lifestyle can be more straightforward, less costly and more scalable than traditional treatment for more serious drugs like heroin or methamphetamines”, continued CEO Chris Heath. “In fact, most insurance companies will not cover traditional treatment for patients exclusively using and suffering from negative side effects of marijuana. Therefore, I believe helping users to manage the side effects of use, including helping them choose better strains, is a much more successful approach to this large market need.
On top of high quality strains of marijuana, I believe that several companion products, which can be taken by marijuana users without a prescription and at affordable prices, will be a popular method for management,” finished Mr. Heath. “And because the effective ingredients for these products exist today on the market, we plan to launch very quickly and sell through multiple channels soon. With 80 million Americans now eligible to use marijuana recreationally, I do think we will find a very large need to help consumers incorporate marijuana use into their lifestyle while reducing negative consequences.”
The Company’s unaudited financial statements for the three and nine months ended November 30, 2017, and accompanying Management’s Discussion & Analysis (MD&A), are available on Sedar at www.sedar.com. The quarter ending November 30, 2017 saw an increase in revenues by 9% for the quarter, the third consecutive quarterly increase. While the Company generated $159,000 in Adjusted EBITDA, profits were dampened by regulatory and legal expenses associated with owning the traditional treatment centers. Mr. Chris Heath, CEO, will be holding some earnings call on February 6th. More details will follow.
In terms of expansion of additional centers, one additional outpatient center is due to be fully launched by fiscal year end. The other centers continue to navigate the local and state regulatory landscape and no timeframe can be given for these planned centers to be fully operational.
“In the nine months I have been CEO, and for the third straight quarter, we’ve increased revenue, as well as improved profitability from last year. In the time since I have taken leadership of the company, we have increased our real estate holdings and improved our balance sheet. While seemingly boring to the capital markets, these treatment centers are a steady part of our business. The marijuana treatment products, as well as getting into the marijuana market in California, Colorado, Oregon and Washington, will certainly have more room for growth with less invested and better margins, but we rely upon our west coast footprint and large revenue base to launch new products and centers. Therefore, I am proud that they continue to perform well. We are committed to making the Company a leader in all methods, products and technologies associated with treating, managing or reducing the impact from addiction. I am personally focused on investing in the fastest growing, most profitable revenue line whatever that may be. I am a believer that if we can find the most effective way to serve the market for addiction services and products, our stock price will follow suit.”
This press release refers to “Adjusted EBITDA” which is a non-GAAP and non-IFRS financial measure that does not have a standardized meaning prescribed by GAAP or IFRS. The Company’s presentation of this financial measure may not be comparable to similarly titled measures used by other companies. This financial measure is intended to provide additional information to investors concerning the Company’s performance. Adjusted EBITDA is defined as EBITDA excluding stock based compensation and gains/losses on financial derivatives. Adjusted EBITDA is a Non-IFRS measure the Company uses as an indicator of financial health, and excludes several items which may be useful in the consideration of the financial condition of the Company, including interest expense, taxes, depreciation, amortization, stock based compensation, good will impairment and gain/losses on financial derivatives. The following table shows our Non-IFRS measure (Adjusted EBITDA) reconciled to our net income for the indicated periods:
November 30, 2017
|Net income (000’s)||($598)|
|Depreciation and amortization||$167|
|Interest expense (net of interest income)||$46|
|Provision for income taxes||$17|
|Facility Set Up and One-time non-recurring||$322|
Management uses these non-GAAP measures as key metrics in the evaluation of the Company’s performance and the consolidated financial results. The Company believes these non-GAAP measures are useful to investors in their assessment of the operating performance and the valuation of the Company. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data, the Company has determined that it is appropriate to make this data available to all investors. However, non-GAAP financial measures are not prepared in accordance with GAAP, and the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.
Certain statements contained in this press release constitute “forward-looking information” as such term is defined in applicable Canadian securities legislation. The words “may”, “would”, “could”, “should”, “potential”, “will”, “seek”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions as they relate to the Company, including: launching the WeedAide product line generally including launching it in the coming quarters; researching and monetizing different marijuana strains; and launching one additional outpatient center by fiscal year end; are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company’s current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions. Material factors or assumptions were applied in providing forward-looking information, including: BLVD securing trademarks for its products; BLVD securing a manufacturer for its products; BLVD executing agreements with distributors and retailers for its products; no adverse changes to local, state and federal laws; securing proper insurance to sell its products; and finalization of a website to promote and sell its products. There is no guarantee that the Company’s plans to (i) monetize certain marijuana strains in California, Colorado, Oregon and Washington, (ii) sell products designed to reduce the side effects of daily marijuana use, (iii) add a revenue line to monetize these strains, and (iv) launch very quickly and sell through multiple channels soon. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. These factors include, without limitation: changes in law; the ability to implement business strategies and pursue business opportunities; the state of the capital markets; the availability of funds and resources to pursue operations; decline of reimbursement rates; dependence on few payors; possible new drug discoveries; a novel business model; dependence on key suppliers; granting of permits and licenses in a highly regulated business; competition; changes in healthcare regulations or insurance coverage, particularly those relating to mental health or younger citizens; difficulty integrating newly acquired businesses; the time, outcome and cost of any inquiries, audits or litigation with insurance providers, or federal, state or local regulators; low profit market segments; as well as general economic, market and business conditions, as well as those risk factors discussed or referred to in the Company’s annual Management’s Discussion and Analysis for the year ended February 28, 2017, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. The Company’s results and forward-looking information and calculations may be affected by fluctuations in exchange rates. All figures are in Canadian dollars unless otherwise indicated.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
BLVD Centers Corporation
Chief Executive Officer