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ANAHEIM, Calif., Feb. 25, 2019 (GLOBE NEWSWIRE) -- GreenGro Technologies, Inc. (OTC: GRNH), a provider of eco-friendly green technologies for the cannabis industry, today announced a restructuring and cost savings plan to improve efficiency and profitability that should position the Company for long-term success. The restructuring will enhance the Company’s flexibility to invest in new growth opportunities from the cannabis industry with the goal to achieve positive cash flow and earnings in fiscal 2019.
“I want to thank you for your ongoing support and confidence in us over the past 12 months. We have made great strides in developing our new business plan and building the team to execute them,” said James Haas, Chairman and Chief Executive Officer of GreenGro Technologies, Inc. “In an effort to capitalize on the numerous growth opportunities that have emerged from the multi-billion dollar and growing cannabis industry, we have restructured the company’s operations to create a more agile, streamlined and efficient core business that should position us for long-term success, with our goal to achieve profitability, as early as possible,” continued Mr. Haas.
GreenGro’s Extraction Operations Key to Profitability
Management contracts currently being negotiated for GreenGro’s new extraction operations should contribute nicely to the Company’s bottom line in fiscal 2019. These contracts, while still in negotiations, once finalized could represent the majority of the Company’s recurring earnings due to their high margins which typically range between 70%-80%.
“Potential Management contracts for our new developing extraction abilities should enable us, in the very near future, to dramatically accelerate the production of high-margin cannabis derivatives under favorable terms,” continued Mr. Haas. “The market for non-smoked derivative cannabis products is reported to be growing at a remarkable pace, and through our anticipated agreements, we should have a cost-effective and scalable means to help meet this demand,” concluded Mr. Haas.
According to Leafly, marijuana "flower" sales still dominate the market, but extracts make up the fastest-growing segment of the cannabis industry. In some markets, the share of flower sales has declined to 50%, with derivatives making up the balance.
Restructure of Unprofitable Operations
As part of the restructuring efforts, the Company restructured its unprofitable operations, including limiting its Vertical Hydrogarden business to appointment only sales and divested its North Hollywood retail outlet. The Company is also in the process of replacing contractors for its Cathedral City facility investment. These actions should enable the Company to save significant development expenses that it can be diverted to more promising ventures.
The Company also restructured its new CBD Ventures division to focus on the design, production and distribution of a new line of hemp-based products developed from a proprietary formula of ultra-high quality CBD, nutraceuticals and vitamins that promote energy and focus for wellness seekers.
The CBD market is reported to be experiencing dramatic growth and is predicted to grow to $2.1 billion in consumer sales by 2020, with $450 million of those sales coming from hemp-based sources. Demand for CBD has also increased rapidly due in large part to the wide variety of ways it can be used in products, ranging from food and cosmetics to beverages and a myriad of health supplements.
Company to Host Investor Conference Call
The Company today also announced that Jim Haas, Chairman and CEO, will host a conference call with its shareholders to provide a more detailed update on its operations and to answer any questions from the investment community. A specific date and time will be announced shortly.
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About GreenGro Technologies
GreenGro Technologies (OTC :GRNH ) is a vertically-integrated provider of eco-friendly state-of-the-art technological solutions to the cannabis industry. The Company is a trusted partner to the cultivation, extraction, production and retail aspects of the cannabis market through a combination of three operating divisions that encompass extraction, CBD production and Genobreeding development. Each division is able to leverage the strengths of the other, creating a synergistic, efficient and highly profitable business model. Additional details can be found by visiting the Company’s website at www.greengrotech.com.
(Disclaimer: The Company relies upon the Safe Harbor Laws of 1933, 1934 and 1995 for all public news releases. Statements, which are not historical facts, are forward-looking statements. The company, through its management, makes forward-looking public statements concerning its expected future operations, performance and other developments. Such forward-looking statements are necessarily estimates reflecting the company’s best judgment based upon current information and involve several risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such statements. It is impossible to identify all such factors. Factors which could cause actual results to differ materially from those estimated by the company include, but are not limited to, government regulation; managing and maintaining growth; the effect of adverse publicity; litigation; competition; and other factors which may be identified from time to time in the company’s public announcements).