With Q2 financials due yesterday for a number of Canadian LPs, Maricann Group (CSE: MARI) (OTC: MRRCF) issued its results on Sedar.com, with sales of C$661,602 declining by 27% from year ago levels and 42% compared to Q1. The company also posted a news release to its own site, “Maricann Group Inc. Earnings Explanation, Operation Update.”
Maricann attributed the shortfall to a windstorm on March 8th, with sand entering its greenhouses and ultimately causing it to destroy all of the plants impacted. The company, which has taken action to prevent a future wind-related event by “sealing the HVAC system and installing additional perimeter safeguards,” expects the situation to impact the results through mid-August as well.
Given the long period between the event itself and the disclosure of its impact, we reached out to CEO Ben Ward for an explanation of the timing.
The end damage of the windstorm was not immediately apparent the day after, with attempts to salvage product, third party analytical testing and spot inspections coming back with no adverse results. We contemplated extracting the product to remove all potential toxins that could have been carried in the sand from nearby fields, and gained expert advice over the period of months as to potential risk.
Ben Ward, Maricann CEO
Our first desire was to buy in wholesale flower and bolster our oil inventory if the product could be purified. After months of investigation and expert opinion, we finally decided recently to destroy the product that had been quarantined as there was no way we could eliminate the risk of a potential spot contamination of product.
According to the news release, Maricann, which produced sales of C$1.8mm, expects that the natural weather event will reduce its 2017 projected revenue from C$6.7mm to C$4.3mm. The company also provided details of its European operations, its capacity expansion in Canada and several new hires.
