The Green Organic Dutchman Reports First Quarter 2021 Results, Turnaround Plan Well Under Way

• Revenue of $8.98 million increased 194% compared to Q1-2020
• Gross profit of $3.13 million increased 83% compared to prior year
• G&A reduction of 53% compared to the same period in 2020
• Net income of $12.46 million, due to reversal of impairment charges

TORONTO, May 12, 2021 /CNW/ - The Green Organic Dutchman Holdings Ltd. (the "Company" or "TGOD") (TSX: TGOD) (US: TGODF), a leading producer of premium certified organically grown cannabis, reports its unaudited interim financial results for the quarter ended March 31, 2021. These filings are available for review on the Company's SEDAR profile at www.sedar.com.

Management Commentary:

"This quarter's improving financials demonstrate how we are strengthening TGOD's foundations by executing our turnaround plan. From monetizing under-utilized assets to streamlining our organizational structure and strengthening our balance sheet, our new leadership team is making great strides towards completing the transformation of TGOD into a profitable and agile organic cannabis producer that stands to benefit from accelerated growth in Canada and abroad with opportunities in Germany, Mexico, Australia, and the United States," commented Sean Bovingdon, TGOD's CEO and Interim CFO. "The achievement of net income reflects the positive outlook for our cashflows in relation to our right-sized operations.  We look forward to the potential lifting of COVID restrictions as vaccinations increase, which will allow for better access for consumers to our organically grown quality products, that are now consistently achieving THC levels greater than 20%."

First Quarter 2021 Financial Highlights:

• Earned quarterly revenues of $8.98 million in Q1-2021 compared to $3.06 million in Q1-2020, and $10.92 in Q4-2020. This represents a year-over-year increase of 194%, and quarter-over-quarter decrease of 18%. Sales from cannabis products in Canada of $6.67 million for Q1-2021 and hemp-derived product sales in Europe of $2.31 million for Q1-2021. The quarter-over-quarter decrease in revenue is in line with the Company's forecast and can be mainly attributed to store restrictions and stay-at-home orders related to COVID-19, combined with some provincial listing mandates being revised at the start of the year. The decrease appears to be within the range of what has been observed and reported by many peer companies to date in 2021, and the Company expects growth to rebound for the remainder of 2021 with restrictions anticipated to be lifted as vaccination rates increase and retail stores reopen.
• Experienced a gross profit of $3.13 million compared to $1.71 million in previous year, and a loss of $0.89 million in Q4-2020. This reflects the increased volumes of sales in Canada from the prior year, partially offset by $0.6 million of non-recurring property tax reassessments included in Q1-2021 costs of goods.
• Continued to benefit from its cost control initiatives with further reductions in G&A expenses, down by 53% year over year. Compared to Q4-2020, G&A expenses decreased by $0.99 million, reflecting reductions in personnel costs and third-party professional, consulting, and legal costs, including listing costs and expenses related to the AGM held in Q4-2020. Management continues to proactively manage costs to correlate with sales activity levels.
• Recorded a net non-cash reversal of previous impairments of $21.81 million triggered by its Quebec Facility being classified as assets held for sale. By committing to a plan to sell the Quebec Facility, which represented significant excess growing capacity, the Company significantly improves its working capital and the expected return on the Company's remaining assets is expected to improve. This resulted in the non-cash impairment reversal, representing improved returns on discounted future cashflows generated from the Ancaster Facility and remaining assets.
• Registered a net income of $12.46 million for the quarter compared to a loss of $73.44 million for the same period during the prior year, comprised primarily of the reversal of impairment, and a loss from operations of $5.89 million. On a per share basis, the Company recorded a net income of $0.02 compared to a loss of $(0.23) for Q1-2020 and $(0.05) for Q4-2020.

Key Updates Subsequent to the Quarter:

Sale of Quebec Facility

On April 29, 2021, the Company provided an update on the potential sale of its Quebec Facility, stating that it had received multiple viable bids. Management and its advisors are currently working through the details of the bids and anticipate progressing towards signing a definitive purchase and sale agreement and closing by the end of June 2021. Many of the offers received include the ability for the Company to lease back the small portion of the Quebec Facility that is currently in use, such that the Company anticipates minimal disruption to current operations and no requirement for the Company to expend capital for any relocation.

United States Market Entry

With the continued regulatory progress in the US towards the decriminalization and legalization of cannabis in some form in various states, and the SAFE Banking Act passing through the US House of Representatives, the Company is accelerating its exploration of strategic options towards a potential US entry.  Specific actions underway include discussions with investment advisors on potential acquisition and partnership opportunities, the potential expansion of the board to seven directors for the upcoming annual and special meeting of shareholders of the Company to add an additional nominee with US capital markets experience, and consideration of applying for a listing on the Canadian Stock Exchange which would allow for cannabis investment into the US.

Other Strategic Initiatives

The Company continues to review other strategic initiatives to maximize shareholder value. This includes the potential sale or spin-off for an Initial Public Offering of HemPoland, its wholly owned subsidiary, for which the Company has retained Canaccord Genuity as an advisor, and the potential for mergers and acquisitions in the Canadian cannabis LP sector.  The Company also continues to pursue other international opportunities specifically focusing on Germany, Mexico, and Australia.  The Company is one of very few licensed producers with access to the Mexican market, with 4 SKUs already well into the review process by the COFEPRIS.  In Australia, the Company continues to make progress with its in-country partner for medical cannabis, LeafCann, and expects to move towards exporting product in the next few months.

The TGOD Promise

On May 4, 2021, the Company unveiled the TGOD Promise and relaunched its portfolio of premium organic flower.  It developed CleanCraft™, a set of enhanced cultivation and processing methods to deliver on its promise that any core TGOD flower SKUs delivered to stores will offer an organically grown craft quality product with a THC level of at least 20% in every jar.  As part of its commitment, older product stored in provincial warehouses that did not meet the Company's strict quality standards can be replaced with the new higher-quality flower, with any returned product being redirected for extraction purposes. TGOD's new premium flower products are available nationally.

Investor Conference Call to Discuss First Quarter Results

Management will host a conference call with analysts on May 13 at 10:00 a.m. Eastern Time to discuss the results. Participants may access the call by dialing 416-764-8688 (Toronto) or 1-888-390-0546 (North America); Conference ID 19888977. For those unable to participate on the live call, a playback will be available for one week after the conference call using this URL: 
https://produceredition.webcasts.com/starthere.jsp?ei=1461248&tp_key=d815ed6d48.

About The Green Organic Dutchman Holdings Ltd.

The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (US–OTC: TGODF) is a premium certified organically grown cannabis company focused on the health and wellness market.  Its organic cannabis is cultivated in living soil, as nature intended.  The Company is committed to cultivating a better tomorrow by producing its products responsibly, with less waste and impact on the environment. Its two Canadian facilities have been built to LEED certification standards and its products are sold in recyclable packaging.  In Canada, TGOD sells dried flower and oil, and recently launched a series of next–generation cannabis products such as hash, vapes, organic teas and dissolvable powders.  Through its European subsidiary, HemPoland, the Company also distributes premium hemp CBD oil and CBD-infused topicals in Europe. By leveraging science and technology, TGOD harnesses the power of nature from seed to sale.

TGOD's Common Shares and warrants issued under the indentures dated December 19, 2019, June 12, 2020, October 23, 2020 and December 10, 2020 trade on the TSX under the symbol "TGOD", "TGOD.WS", "TGOD.WR", "TGOD.WA", and "TGOD.WB" respectively, and TGODF trades in the US on the OTCQX. For more information on The Green Organic Dutchman Holdings Ltd., please visit www.tgod.ca.

Forward-Looking Information Cautionary Statement

This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward looking statements in this release includes, but is not limited to, statements about future revenue, statements about production timing, efficiencies, sale of assets, statements about future production, statements about achievement of positive cash flow and value for shareholders, statements about reduction in general and administrative expenses, statements about the offering of any particular products by the Company in any jurisdiction and statements regarding the future performance of the Company. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of Toronto Stock Exchange) accept responsibility for the adequacy or accuracy of this release.

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SOURCE The Green Organic Dutchman Holdings Ltd.