TORONTO, April 09, 2019 (GLOBE NEWSWIRE) — Nutritional High International Inc. (“Nutritional High” or the “Company”) (CSE: EAT, OTCQB: SPLIF, FRANKFURT: 2NU) is pleased to provide an update on Calyx Brands Inc. (“Calyx”), Nutritional High’s wholly-owned subsidiary which operates a distribution business in California.
Financial and Operating Metrics1
For the three months ended January 31, 2018, Calyx achieved a revenue of approximately $5.7 million, representing an annualized revenue run rate of approximately $22.7 million. For the same period, the gross margin was 19.5% and the Company’s total operating expenses were approximately $4.25 million.
As disclosed in the press release dated April 1, 2019, for the 12 months ended January 31, 2018, Calyx’s revenue was approximately $17.2 million. Sales in the second half of the period increased by 96% to $11.4 million from $5.8 million in the first half of the period. In the same period, cost of sales increased from $5.1 million to $8.9 million, which represents an improvement in gross margin percentage of almost 10%.
Calyx continues to grow its distribution capability in the State of California and currently has distribution relationships with over 450 licensed dispensaries throughout the state. It is estimated that there were approximately 650 retail locations in California in the fourth quarter 2018, increased from 450 in the third quarter 2018 and the overall market remains underpenetrated2.
Calyx’s curated distribution portfolio is comprised of of 13 market-leading brands, including Nutritional High’s own flagship FLÏ™. The product offering includes but is not limited to edible products such as beverages, natural fruit bites, gummies and mints, as well as concentrates, flower and pre-rolls.
Executive Quotes and Commentary
“Maintaining and expanding relationships with dispensaries is critical to Nutritional High’s business in terms of driving sales growth and building intelligence.” Commented Dakota Sullivan, CEO of Calyx. “The data that we are able to gather from our footprint ensures that we are constantly at the forefront of industry trends and respond to changing consumer preferences by sourcing promising new brands and bringing them to the attention of retailers.”
“Own the distribution pipeline and own the shelf space. That is our strategy,” commented Jim Frazier, CEO of Nutritional High. “To elaborate, through our ownership of the distribution pipeline, we are effectively aiming to control which products appear on shelves without actually owning any dispensaries and exposing the Company to the risk of operating a brick and mortar retail operation. This strategy was further highlighted by our exit from retail business when we sold our remaining 50% interest in The Clinic Effingham in Illinois in October 2018. Our diversified approach puts us in a position to take established brands to the next level, as well as nurture the lasting success of emerging up-and-comers.”
“Our latest quarter revenues are approximately 7.2x of the revenue base of Calyx pre-acquisition” added Adam Szweras, Co-Chair of the Nutritional High board. “Since acquiring Calyx in March 2018, we have been able to rapidly accelerate revenue growth through capital injection and the joint management expertise of Nutritional High and Calyx. Based on Calyx’s current market access of over 450 dispensaries in California, the management believes that Nutritional High’s footprint represents a dominant market position in the California distribution landscape when compared to other players in the market.”
About Nutritional High International Inc.
Nutritional High is focused on developing, manufacturing and distributing products under recognized brands in the cannabis products industry, with a specific focus on edibles and oil extracts for medical and adult recreational use. The Company works exclusively with licensed facilities in jurisdictions where such activity is permitted and regulated by state law.
The Company follows a vertically integrated model with a fully developed strategy for acquisitions in extraction, production, sales, and distribution sectors of the cannabis industry. Nutritional High has brought its flagship FLÏ™ edibles and extracts product line from production to market through its wholly owned subsidiaries in California and Oregon, as well as Colorado where its FLÏ™ products are manufactured by a third-party licensed producer. In California, the Company distributes its products and products manufactured by other leading producers through its wholly owned distributor Calyx Brands Inc. and is entering the Nevada, Washington State and Canadian markets in the near future.