Green Organic Dutchman
Holdings Ltd (OTCMKTS:TGODF)
has introduced a new strategic plan, which will
not only help the company lower its financing requirements, but will also help
achieve its profitability targets. Brian Athaide, the CEO, expressed that these
actions mark as the next logical measures towards the firm’s road to
profitability. Their strategy has always focused on an unparalleled scale, but
they will not shy away to focus on operational efficiencies where the scale
will fail.

Increase production,
lower costs

Green Organic is scaling back SG&A to bring its emphasis on
operational readiness in sales, production, and Cannabis 2.0. The company will
advance its project in Valleyfield in smaller phases. Six rooms are finalized in
Valleyfield hybrid greenhouse.

The focus is also on Ancaster processing facility, which is
approaching material completion. The Ancaster site is expected to be fully
completed by the close of the fourth quarter, including the Ancaster processing
facility. Green Organic is expected to achieve a production of 20,000 kg to
22,000 kg, both facilities combined, in 2020. Ancaster is expected to achieve an annual
production of around 12,000 kg in 2020.

The current market conditions have made Green Organic opt for new
construction and operating strategy. This new plan will lower cash
requirements, with a production increase, which will eventually help the firm
to record positive operating cash flow in the second quarter of 2020.

The firm will need around $70 million to $80 million until Q2 2020 to implement the
plan. Green Organic has appointed an advisor to evaluate different options for
getting the expected funding. The funds may be arranged either from lower-cost
financing, or operating cash flow, provided they achieved planned production
and revenue from the company’s Ancaster and the smaller initial phase of Valleyfield.

The existing legal market in Canada is still growing at a sluggish
pace, mainly following a slow launch of retail sites in major provinces. As a
result, the new strategy will enable Green Organic to right-size its production
that will help capture the organic segment. Further, it will maintain their
option to accelerate and grow quickly as more retail sites begin to open.