C21 Investments, Inc. (CSE: CXXI and OTC: CXXIF) today released a letter from Sonny L. Newman, President and CEO, to the Company’s shareholders. The letter follows below and can also be accessed from the Company’s website at www.cxxi.ca.
July 16, 2019
Dear fellow shareholders,
It has been about a week since my appointment as President and CEO of C21 Investments. With my first letter, I would like to briefly outline my strategy that has the potential to create long-term value for all of our shareholders. Like you, I have a vested interest in developing a path to a profitable, cash-flow positive and well capitalized company for future expansion.
I am in the process of analyzing our current capital structure, finances, and company structure to develop a strategy for short-term breakeven and long-term profitability and it is clear we have work to do. Our Nevada operations remain strong, contributing 91% of the company’s revenue and all the profit. Oregon’s saturated market continues to be a challenge, right-sizing and integrating our operations there will be our top priority over the next quarter. Eliminating non-critical expenses, reallocating assets, and aligning our human capital are happening now and will continue until our Oregon operations are stabilized.
With our mature consumer packaged goods brands in Oregon, we have leveraged their success and launched into the Nevada market. Hood Oil Vape cartridges were launched on June 6, 2019 in our Silver State Relief dispensaries and have sold over 11,000 units contributing $302,000 of revenue (with gross margin of 25%) in the two retail locations. The Phantom Farms brand will launch on the wholesale market later this month and in our retail locations in early September. Dab Society is also anticipated to launch in September. These are all well-respected brands in Oregon and we look forward to expanding their reputation in the Nevada market.
I am most excited about the long-term potential of the Nevada market. With a state mandated limit on retail locations, Nevada remains an attractive market for the foreseeable future. Over the next two quarters, expanding our successful vertically integrated model in Nevada will also be a top priority. We will be examining opportunities to acquire additional retail locations in Northern Nevada and the Las Vegas area where volume is sufficient to scale and leverage our vertical model to maximize our profitability.
I would like to extend my heartfelt appreciation to all our employees, customers, and shareholders for getting us to this point. Thank you for the opportunity to earn your confidence and trust,
Sonny L Newman
President and Chief Executive Officer
Excerpt from Q1 2020 Management Discussion & Analysis
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