Press Release

Aleafia Health Announces Third Quarter 2020 Results

TORONTO – November 11, 2020 – Aleafia Health Inc. (TSX: AH, OTC: ALEAF) (“Aleafia Health” or the “Company”) is pleased to report its financial results for the three and nine months ended September 30, 2020 (“Q3 2020”).

“We expect to have our strongest quarter to date in Q4 2020 as we progress towards significant sequential growth in medical, adult-use, wholesale and international cannabis sales. The strategic path we’ve executed upon, from building out facilities, to receiving three major licences in 2020, to formulating new products, is now bearing fruit. With the introduction of vape cartridges, sublingual strips, and with many more launches to come, the commercialization of our business at scale is truly in full swing,” said Aleafia Health CEO Geoffrey Benic. “We look forward to continuing to launch dynamic, innovative formats, while greatly expanding our dried flower portfolio.”

“With respect to the most recent quarter, the successful sale of our entire 2019 outdoor crop was completed earlier in the year, which led to a significant sequential decline in cannabis revenue, due to lack of available product. This was coupled with a number of significant product launches that only began generating revenue following the end of the reporting period.”

Quarterly Condensed Income (Loss) Statement

Revenue Catalysts & Product Launch Roadmap

  • $16M in Contracted Cannabis Sales: In addition to growth in the medical, adult‑use and international channels, the Company has contracted sales that will, upon completion of shipments, generate net revenue of $16 million. It is expected that the majority of the domestic wholesale shipments will be completed in the three months ended December 31, 2020 (“Q4 2020“), with the remainder shipping to customers early in the first quarter of 2021 (“Q1 2021“).
  • Record Medical Cannabis Revenue & Strong Adult‑use Growth: In addition to the $16 million in cannabis sales referenced, the Company also expects to see significant growth in the adult-use and medical channels. With incremental revenue generated by new product launches, and a 32 per cent sequential increase in active, registered patients, the Company expects to report record medical cannabis net revenue during Q4 2020, along with strong growth in adult-use revenue.
  • Multiple Shipments to Australian Market: The Company is currently in the process of fulfilling it’s largest international order via medical cannabis shipments to Australian strategic partner CannaPacific Pty Ltd. The purchase orders are expected to ship in Q4 2020 or Q1 2021 depending on the timing of the receipt of necessary import and export permits.
  • Aleafia Germany Generating First Sales: Q4 2020 will represent the first quarter reporting revenue generated from cannabis sales within Germany. Sales of medical cannabis products to German pharmacies is now underway, through the Company’s joint‑venture with German pharmaceutical wholesaler Acnos Pharma GmbH.
  • Launch of 510 Vape Cartridges in Adult‑use Market: Following a successful launch to its Emblem medical patients, shipments of the Company’s first Cannabis 2.0 product format in the adult‑use market were completed on November 6, 2020.
  • Launch of Kin Slips Sublingual Strips: Sales of the Company’s strips, Kin Slips, will commence to medical patients in November 2020, and subsequently in the adult‑use market. Not currently available in Canada, the award‑winning Kin Slips features a rapid onset time, and novel, discreet form factor.
  • Confectionary Edibles: Production of the Company’s first edible format, soft candies, is underway. Formulated and produced in‑house at the Paris Facility, the soft candies are expected to launch in January 2021.
  • Expansion of Core Dried Flower Portfolio at Scale: 31,200 kgs of dried flower were harvested at the Company’s Port Perry outdoor cultivation site, including the high quality, high potency dried flower now allocated for sale into the adult‑use market. The Company will release an enhanced pre‑roll line, with SKUs featuring different potencies, sizes and price points, tailored to key consumer segments. Sales of production lots produced at the Niagara Greenhouse Facility have also commenced with a further ramp‑up over the next three months.
  • Genetics R&D Program: Approximately 40 new genetics, many of which are not available anywhere in the Canadian market, have undergone R&D production runs across the Company’s Niagara Greenhouse Facility, Port Perry outdoor cultivation site, and Paris’ craft indoor grow. The top candidates for cultivation in the various environments have been identified, with sales of new cultivars to commence in Q1 2021, offering consumers a differentiated flower portfolio of high potency strains with unique terpene profiles.

Quarterly Financial Highlights


For the three and nine months ended September 30, 2020 net revenue was $5.0 million and $29.3 million, flat and an increase of 184%, respectively, over the same periods in the prior year. The increase over the nine month period was primarily derived from a  $20.2 million increase in cannabis net revenue.

For the three and nine months ended September 30, 2020, cannabis net revenue was $4.2 million and $27.0 million, an increase of 11% and 298%, respectively, over the same periods in the prior year. As previously disclosed in the Company’s MD&A for the quarters ended March 31, 2020 and June 30, 2020, cannabis net revenue may fluctuate due to the seasonal nature of outdoor cultivation, which was the primary reason for a sequential decline in cannabis net revenue during Q3 2020. However, the Company’s exposure to seasonality is reduced with the recent licensing of the Niagara Facility and Paris Phase II expansion, that together support consistent, standardized input material, processing and packaging capacity for medical and adult‑use sales channels.

The Company expects to see net cannabis revenue in the medical, adult‑use and wholesale channels increase sequentially in Q4 2020. By Q1 2021, the Company expects that the sale of packaged cannabis products in the medical and adult‑use sales channels will represent a majority of total cannabis revenue.

Net Income & Adjusted EBITDA

Q3 2020 adjusted EBITDA was a loss of $5.7 million. For the nine months ended September 30, 2020, the Company reported  positive adjusted EBITDA of $3.8 million, compared to a loss of $2.5 million and $18.8 million, respectively, for the same periods in 2019.

Net loss for the three and nine months ended September 30, 2020  was $19.8 million and $29.9 million, compared to positive net income of $1.9 million and a loss of  $29.8 million, in the same periods in the prior year. The net loss was primarily due to the non‑cash $14.3 million adjustment of saleable inventory to net realizable value during the quarter, to reflect a significant decline in cannabis wholesale prices.

Key Developments During the Three Months Ended September 30, 2020

  • Launch of AssureHome Delivery Same‑Day Service

On July 29, 2020 the Company announced that it would offer same‑day shipments through AssureHome Delivery, a direct‑to‑door delivery service for medical cannabis products. Providing patients with fast and complementary service, it is available exclusively to Emblem patients in the Greater Toronto Area and surrounding communities. Medical cannabis orders received before noon on any business day are shipped and delivered the same day by dedicated couriers.

  • Appointment of Pharmaceutical Executive Tricia Symmes as Chief Commercial Officer

During the reporting period, Aleafia Health announced the appointment of pharmaceutical executive Tricia Symmes as Chief Commercial Officer, effective August 27, 2020. Symmes brings over 20 years of experience as a senior executive in the pharmaceutical, consumer packaged goods, and cannabis industries. Reporting to Aleafia Health CEO Geoffrey Benic, she will lead the development and execution of the Company’s product launches, sales, marketing and corporate development initiatives in the adult‑use, medical and international cannabis markets.

  • Regulatory Approval to Commence Cannabis Sales in Germany

On September 1, 2020, the Company announced that its indirect subsidiary, Aleafia Health Germany GmbH (“Aleafia Germany”) will commence distributing medical cannabis products to German pharmacies following regulatory approvals. Aleafia Germany received a controlled drug licence from the Federal Institute for Drugs and Medical Devices and a European Union Good Distribution Practice certification from the Cologne district government. Together, these approvals authorize Aleafia Germany to purchase and distribute medical cannabis products within Germany from its cannabis distribution centre in Aachen Brand.

  • Launch of Cannabis 2.0 Portfolio with 510 Vape Cartridges

On September 29, 2020, Aleafia Health announced the launch of its first Cannabis 2.0 product, 510 vape cartridges. The vapes are inspired by Aleafia Health’s signature cultivars. The custom‑made, unique terpene blends deliver robust flavours and consistent effects. They contain CO2‑extracted distillate mixed with a custom blend of botanically sourced terpenes. No fillers or artificial flavours are used, offering consumers and patients an authentic experience. Vape shipments to Emblem medical patients and provincial wholesalers commenced subsequent to the reporting period.

Key Developments Subsequent to September 30, 2020

  • Outdoor Grow Results

On November 6, 2020, the Company reported its Port Perry Facility’s preliminary outdoor cannabis harvest results, where 50,000 plants have yielded approximately 31,200 kgs of dried cannabis flower at a cash cost per gram to harvest of $0.10. Included in the total yield is 7,200 kgs of THC‑dominant dried flower, much of which will be used to accelerate the expansion of the Company’s adult‑use product portfolio. Preliminary test results indicate that cannabinoid content is again comparable to the results of identical cultivars grown indoor. While these results are extremely encouraging, the Company cautions that, as with the previous year’s harvest, potency and quality control tests for the entire crop will not be completed for another two to three weeks following the announcement.

  • Disposition of Shares Held in Aphria Inc.

On June 25, 2020, the Company announced that Emblem and Aleafia Health entered into a settlement agreement (the “Settlement Agreement”) with Aphria Inc. (“Aphria“) to resolve their outstanding dispute in respect of the termination of the parties’ wholesale cannabis supply agreement. Under the terms of the Settlement Agreement, Emblem received common shares of Aphria with an aggregate market value of $10.0 million. During, and subsequent to the reporting period, the Company disposed of the Aphria shares, for cash proceeds of approximately $11.5 million.

Conference Call & Webcast

Date:   November 11, 2020
Time:   8:30 a.m. EST
USA/Canada Toll‑Free Participant Call‑in: (866) 679‑9046; Passcode: 6997217
International Toll‑Free Participant Call‑in: (409) 217‑8323; Passcode: 6997217


This conference call will be webcast live over the internet and can be accessed through the link provided.  Audio of the call will be available to participants through both the conference call line and webcast; however, the presentation may only be viewed via the webcast. Participants who miss the live call can view a replay at any time via the link provided.

For Investor & Media Relations

Nicholas Bergamini
VP Investor Relations

About Aleafia Health

Aleafia Health is a vertically integrated and federally licensed Canadian cannabis company offering cannabis health and wellness services and products in Canada and in international markets. The Company operates medical clinics, education centres and production facilities for the production and sale of cannabis.

Aleafia Health owns three significant licensed cannabis production facilities, including the first large‑scale, legal outdoor cultivation facility in Canadian history. The Company produces a diverse portfolio of commercially proven, high‑margin derivative products including oils, capsules and sprays. Aleafia Health operates the largest national network of medical cannabis clinics and education centres staffed by MDs, nurse practitioners and educators and operates internationally in three continents.

Innovation, the heart of Aleafia Health’s competitive advantage, has led to the Company maintaining a medical cannabis dataset with over 10 million data points to inform proprietary illness‑specific product development and its highly differentiated education platform FoliEdge Academy. The Company is committed to creating sustainable shareholder value; the TSX Venture Exchange named Aleafia the 2019 top performing company prior to its graduation to the TSX.

Forward Looking Information

This news release contains forward‑looking information within the meaning of applicable Canadian and United States securities laws and are expressly qualified by this cautionary statement. Often, but not always, forward‑looking information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward‑looking statements in this news release include, but are not limited to, statements with respect to injection of value this settlement brings to the Company’s business. Forward‑looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward‑looking information contained in this news release. Risks, uncertainties and other factors involved with forward‑looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward‑looking information, including risks contained in the Company’s annual information form dated March 18, 2020 which is available on the Company’s SEDAR profile at Although the Company believes that the assumptions and factors used in preparing the forward‑looking information in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward‑looking information included in this news release is made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward‑looking information to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

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