Simply Solventless Provides Update on Humble Grow Co. Retrofit & Status of Past Acquisition Integrations and Cost Savings
Executive Summary
- SSC announced a $1.5 M net capital investment to retrofit its Humble Grow Co. indoor cultivation facility with LED lighting and related upgrades, targeting 100 % production capacity by early Q3 2026.
- The retrofit is projected to lift annual gross revenue by $17.5‑$29.5 M (to $53.5‑$65.5 M) and adjusted EBITDA by $6.5‑$14.5 M (to $10.7‑$18.7 M), representing a payback period of less than one year.
- Integration of four recent acquisitions is now substantially complete, delivering $7.8 M annual payroll cost savings (≈44 % reduction).
Key Details
- Retrofit Scope & Cost
- LED lighting, table re‑layout, additional irrigation, dehumidifiers, and air‑circulation upgrades at the 98,000 sq ft Winnipeg facility.
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Capital cost ≈ $2.5 M (net of expected government rebates = $1.5 M).
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Production & Revenue Impact
- Expected increase in annual cultivation output: +17.5 M to +29.5 M USD in gross revenue.
- Pro forma gross revenue scenarios (Low/Base/High): $53.5 M / $58.5 M / $65.5 M.
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Corporate growth vs. pre‑retrofit: +49 % / +63 % / +82 % in gross revenue.
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Adjusted EBITDA Impact
- Base adjusted EBITDA (Q3 2025 annualized) remains at $4.2 M; retrofit adds $6.5 M‑$14.5 M, yielding pro forma adjusted EBITDA of $10.7 M / $14.2 M / $18.7 M.
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Adjusted EBITDA growth vs. pre‑retrofit: +155 % / +238 % / +345 %.
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Financial Metrics (per share, based on 115,502,799 weighted‑average shares)
- Gross revenue per share: $0.46 / $0.51 / $0.57.
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Adjusted EBITDA per share: $0.09 / $0.12 / $0.16.
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Sales Mix & Pricing Assumptions
- Post‑retrofit sales mix assumed 50 % B2B, 50 % consumer packaged goods (CPG).
- Per‑gram pricing: CPG – $3.00, Canadian B2B – $1.60, International B2B – $1.90.
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Excise tax applied only to CPG sales at ~21 % of related revenue.
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Cost Structure
- Variable packaging costs: $0.35/g for CPG flower, $0.05/g for all B2B flower.
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No material increase in overhead or salaries; incremental marketing expenses reflected as a reduction in the effective per‑gram price for CPG sales.
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Acquisition Integration
- Four acquisitions completed over the past 18 months; integration substantially complete as of Dec 2025.
- Headcount reduced from 319 to 175 (≈45 % decrease).
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Annual payroll lowered from $17.7 M to $9.9 M, saving $7.8 M (≈44 %).
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Forward‑Looking Statements
- Projections are subject to market conditions, execution risk, regulatory changes, and other uncertainties disclosed in the release.
Notable Quotes
“All Humble retrofit LED lights have now been ordered… Preliminary schedules suggest 100 % retrofit production by early Q3 2026… This $1.5 M net capital investment is expected to provide material increases to revenue, adjusted EBITDA, and cash flow, with a payback period of less than one year.” – Jeff Swainson, President & CEO
“SSC has achieved an estimated $7.8 million in annual payroll cost savings (44 %)… We are encouraged by the impact that these cost savings will have on our future operations.” – Jeff Swainson