Captor Capital Reports 30 per cent Increase in Revenues and 56 per cent Increase in Gross Profits in Annual Audited Financial Statements for the Year Ended March 31, 2021 - Seite 2

Management Commentary

Captor has committed to increasing profit and has done so successfully through growth and expansion at an extremely challenging time. The Company entered fiscal 2021 with two retail dispensaries and has since successfully added seven new retail locations in the most difficult retail environment in memory. Captor has gone from a staff of 20 to more than 115 full-time and part-time employees and the executive team has proven fit in developing operational talent as the Company focuses on top line revenues and sustainable profitability.

Increasing the retail footprint from two to nine locations and subsequently increasing retail revenue has not come without an investment from the Company. Aggressive expansion and a continued commitment to revenue growth have resulted in a variety of one-time charges for the Company that include, but are not limited to, the cost of acquiring leases, salaries of those involved in expansion, organizational costs of such M&A activity and overall G&A. In addition, the Company endured the ever-present federal regulatory challenges that accompany the cannabis sector. Successfully growing from two to nine retail dispensaries, while managing new store construction, systems integration, and the hiring processes that seemed exacerbated with Covid-19 guidelines, is a testament to the leadership and management team that Captor has developed.

Captor remains confident in the ability of its growth strategy to increase purchasing power, streamline supply chains, and centralize business activities in the long-term. The growth-related expenses will support the development of operational efficiencies and economies of scale.

Operational Highlights

• In August 2020, Captor entered into a joint venture with Three Habitat Consulting Holdco Inc. (“Three Habitat”), which owned and operated a retail chain of dispensaries in California under the brand One Plant. Captor and Three Habitat formed Captor Retail Group Inc. (CRG), owned 51 per cent by Captor and 49 per cent by Three Habitat.
  
  
• CRG subsequently took over operation of a combined five-location California dispensary network consisting of CHAI Cannabis locations in Santa Cruz and Castroville and One Plant locations in Salinas, Atwater, and Contra Costa.
  
  
• In January 2021, CRG announced that the 6500 sq. ft. One Plant retail location in Antioch, California had received all operating licenses and was open for business, becoming CRG’s sixth operational dispensary.