TGOD stock is rebounding in the early session on Tuesday after The Green Organic Dutchman Holdings (TSX:TGOD) (OTCQX:TGODF) said that it has received an order to ship cannabis to Nova Scotia, Alberta, and Manitoba.
The product is going to be shipped this month only and marks a significant expansion of TGOD’s operations in Canada. This expansion will give the company access to as many as 340 new retail outlets, to add to the 24 already in Ontario.
The Green Organic Dutchman has also stated that it is going to launch two new strands of cannabis, called Discover and Tranquility, in Ontario.
Additionally, it is also going to launch a certification course for all those who want to become ‘budtenders.’
TGOD stock is trading higher by 11% at $0.72.
Poor Earnings Add Pressure
The Green Organic Dutchman released third-quarter results that were a major disappointment for its investors. TGOD stock has lost over 30% over the past four trading sessions after the poor quarterly earnings.
The company’s revenue for the quarter rose to $2.525 million, which reflects a rise of 34.3% from the $1.88 million it generated in revenue in the prior-year period.
However, the loss per share widened from $0.04 in the prior-year quarter to $0.07 in the latest quarter. In the third quarter, the company made total losses of $20.1 million, and out of that, $4.3 million was made up of amortization, depreciation, and stock-based compensation.
The company did, however, provide some important updates with regards to the future of its business. It has devised a plan to reduce operating losses by as much as $3 million in each quarter next year. If it is successful in doing so, then The Green Organic Dutchman will manage to have positive operating cash flow.
It should also be noted that TGOD stepped into the recreational marijuana market with a pilot project in Ontario, and the project helped in generating as much a $600,000 in sales in the third quarter. The company wants to scale up production at the location and will also target the ‘legalization 2.0’ opportunity in Canada later this year.
TGOD stock has suffered considerably due to the recent issues in the industry, but it needs to be pointed out that much of those problems are due to regulatory issues. The slow rollout of stores has been blamed by many companies.
What do you think of TGOD’s latest plans?
Featured image: Canva