SLANG Worldwide Announces Letter to Shareholders
Editor Note: Thanks to Green Market Report for the reporting on this.
Toronto, Ontario–(Newsfile Corp. – March 22, 2022) – SLANG Worldwide Inc. (CSE: SLNG) (OTCQB: SLGWF) (“SLANG” or the “Company“), a leading global cannabis consumer packaged goods (“CPG“) company with a diversified portfolio of popular brands, today issued a Letter to Shareholders from its Interim CEO and Chairman of SLANG, Drew McManigle.
Since I was seated as Interim Executive Officer on November 15, 2021, the Company’s management team, working closely with its financial advisor, MACCO Restructuring Group, LLC, has undertaken many forward-looking and effective initiatives. These initiatives have been aimed at improving our operational and financial efficiencies while right-sizing the Company to advance a more defined growth strategy. I am pleased to report today, that within four (4) months, these rigorous initiatives have reduced our operating expenses by approximately USD $2.1 million and strengthened our position to advance both our near and long-term growth plans. We are already seeing positive impacts in our monthly budget to actual cash flow. We have also completed and approved a 2022 annual budget for the Company.
Before I dive into the details, I want our shareholders to know that all of our collective efforts have been to ensure that the Company can capitalize on future opportunities in the cannabis industry to drive shareholder value. And, importantly, I am personally optimistic about the Company’s future direction now that we are strategically advancing upon our refined growth strategy.
Listed below are several key accomplishments we have recently made in streamlining our operations to build stronger, sustainable revenue growth and profitable operations.
- Completed management restructuring
Beginning in November 2021, we undertook a rapid and comprehensive review of all aspects of the Company, including, operations; finance; controls and procedures; markets; logistics; sales, marketing, products, and brands; and consumer satisfaction. We also undertook a review of the organizational structure and effectiveness of the Company’s management team. We did all of this and more to reduce unmanageable overhead and conserve liquidity while working to drive growth in SLANG’s core operating markets. In effect, we have strengthened the Company’s position as a specialty focused, nimble and pragmatic organization.
- Implemented transformational strategic growth plan to focus on Vermont and Colorado
Under our newly streamlined, strengthened and cohesive management team, we began to focus our efforts on growth in platform regions and emerging markets that display the strongest demand for our cannabis brands which, would in turn offer the opportunity to lead to greater sustainable and profitable revenue streams. In late November 2021, we began executing upon our strategy for transformational growth by tapering our operations to Vermont and Colorado (our Core Markets), while essentially eliminating any unprofitable components, including our Oregon operations.
We continue to streamline operations, develop new products and branding, investigate opportunities for effective manufacturing out-sourcing and enhanced logistics, while consolidating our supply chain to create synergies and operating efficiencies to further strengthen our bottom-line. We have successfully reduced overseas freight costs. Most notably, we have sourced and contracted for distillate in Colorado at a significant reduction from the Company’s prior year average cost of distillate, which can strongly enhance both revenue and margins. Additionally, we assessed and are exploring opportunities to divest several licenses in the State, as well as, our costly cultivation facility.
In August 2021, the Company acquired High Fidelity/Ceres, Vermont’s largest medical cannabis company, and Vermont quickly became a key facet of our Core Market strategy. With this acquisition, the Company has two of the five medical cannabis licenses granted in Vermont with four dispensaries, including one that is strategically located in the Burlington area, with the ability to add two new retail dispensaries upon receipt of the requisite licenses. In addition, with the advent of recreational cannabis use in Vermont later this year, the potential for material revenue growth, at healthy margins, can occur while we work to further increase overall enterprise value for SLANG.Concurrently, in November 2021, with our management review of the Company, we conducted a similar comprehensive review of High Fidelity’s/Ceres’ management, operations, and finance, as we began the integration of these assets into SLANG.
- New Jersey Opportunity
Finally, in connection with a pre-existing agreement between High Fidelity and Woah Flow, Inc., who was provisionally awarded a medical cannabis license for Trenton, New Jersey in December 2021, the Company now possesses the rights to capitalize on a new business with potentially significant revenue opportunities.
- Completed share consolidation
In February 2022, we sought and gained shareholder approval, for a consolidation of our outstanding common shares (the “Common Shares“) on the basis of one (1) share for every six (6) shares (the “Consolidation“) to further support our efforts to improve shareholder value. The Consolidation was completed on February 28, 2022 and resulted in a total of approximately 70,409,448 Common Shares and 23,555,755 restricted voting shares being issued and outstanding. The Consolidation gives the enterprise a more manageable number of shares outstanding, while allowing for adequate daily trading volume.
- Deepened strategic partnership with Trulieve driving entry into new markets
As previously disclosed, Trulieve Cannabis Corp. (“Trulieve“), in combination with two existing shareholders, Seventh Avenue and Pura Vida, entered a term-loan financing of $17.3 million USD in November 2021 supporting the Company’s near and long-term transformation initiatives, as they related to the newly implemented strategic growth plan.In addition, the Company has partnered with Trulieve for entry into new and emerging markets such as Maryland, West Virginia, and other States.
In a very short amount of time, SLANG’s management, and employees, working collaboratively, have formed a distinct focus on the Company’s future success. We have made meaningful and significant progress transforming SLANG as we aim to capitalize on both current and future opportunities to generate stronger revenue growth, positive cash flow and profitability.
We all would like to thank our shareholders for their continued support as we continue to position SLANG Worldwide as a leading CPG player in the cannabis industry. I look forward to speaking with you on our next earnings conference call in April.
/s/ Drew McManigle
Interim Chief Executive Officer