Delta 9 Cannabis Inc. expansion receives conditional approval from Health Canada

WINNIPEG, Nov. 16, 2017 /CNW/ – DELTA 9 CANNABIS INC. (TSXV: NINE) (“Delta 9” or the “Company“) is pleased to announce that Health Canada has issued its conditional approval for the next phase of the Company’s planned expansion of its Winnipeg, Manitoba production facility. The approval covers an additional 143 of the Company’s self-designed “grow pods”, each of which management anticipates will produce an average of 31.5 kilograms of medical cannabis per year. The Company plans to build a total of 600 grow pods in its current building by the second quarter of 2020. The indication of approval to proceed with the construction of the grow pods was received from Health Canada yesterday after Health Canada completed its “paper-based review” of the Company’s application to amend its production and sales license.

“We are anticipating a dramatic surge in demand for cannabis, so this is an important milestone in our journey to adequately supply the market for recreational cannabis once legalization occurs in July next year,” said CEO John Arbuthnot.

Health Canada will continue its review of Delta 9’s expansion as the project goes through the construction phase, including ongoing inspections for security, odour control measures, Good Production Practices (GPP), and other requirements under the Access to Cannabis for Medical Purposes Regulations (ACMPR). Full approval will not be granted until construction has been completed and confirmed to be in compliance with all of the regulations and requirements of the ACMPR.

Management of Delta 9 estimates that each grow pod will cost approximately $40,000 to produce and install, and will offer 320 square feet (29.7 square meters) of growing space with 15 lights, producing an average of 31.5 kilograms of cannabis per year, depending on the strain being grown.

“The grow pods allow us to expand our production capacity at a very low capital cost and they also have several other advantages,” says Arbuthnot. “If there is a problem with the crop in one grow pod, it doesn’t spread to the other crops we’re growing. They allow us to compartmentalize risk of crop failure due to pests or disease. We are also finding that the quality and potency of our cannabis products have increased greatly since adopting the new hydroponic grow pods.”

Of the 143 grow pods being built, 20 will be reserved as “support pods” for use as cloning and mothering rooms. The remaining 123 grow pods are anticipated by management to produce approximately 3,875 kilograms of dried cannabis per year once they are fully operational.

The Company also wishes to announce that it has launched its new corporate website at www.delta9.ca, including a new section for investors.  The Company plans to launch an updated and more sophisticated online portal for sales of medical cannabis within the next few weeks.