Zenabis, a cannabis company with a 48-acre greenhouse complex in Langley has announced expansion plans will proceed, but slower than originally envisioned.
The company has also revealed production line problems at another facility have slowed sales.
A Zenabis press release said the firm has applied to Health Canada for permission to add 101,300 sq. ft. of growing space to the Langley operation, which would allow its licensed annual production capacity to go up by 39,400 kg to 96,400 kg, a 69 per cent increase.
It said the company planned to follow up with another application that would increase total production to 143,200 kg of dried cannabis, but not until “early in the second quarter of 2020.”
It was delaying the second phase of expansion “in order to preserve cashflow, given current market conditions and [to] reduce ramp-up risk,” the statement said, citing “increases in equipment costs relating to HVAC equipment and automated tray tables” in Langley.
By revising the timeline, the statement said, the firm “expects to be able to reduce cashflow outflows for capital expenditure as Zenabis works to generate positive cashflow from operations.”
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A problem with new packaging equipment put a crimp in production at the Zenabis Atholville operation, the company said in another statement.
New bud jar filling equipment in Atholville that was intended to achieve output of 30,000 units per day (equivalent to more than 90,000 grams per day) fell short.
Average output in September was 6,276 units per day, resulting in completed bud filling of only 517 kg.
“As a result, Zenabis was not able to package, ship and sell all of its product cultivated in August and September that had been destined for provincial counterparties, causing a delay in achieving the Company’s expected revenues,” a company statement related.
With “focused troubleshooting” the company said it has been able to increase packaging output to 11,643 units.
Zenabis was born out of the merger of Langley’s Bevo Farms greenhouse growers and Sun Pharm.
