Investor Ideas Potcasts, Cannabis News and Stocks on the Move; (TSXV: VLNS) (TSX: VFF) (NASDAQ: VFF) (CSE: HOLL) (CSE: AUSA)
Delta, Kelowna, BC - February 26, 2020 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site, www.potcasts.ca release today's podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
Listen to the podcast:
Investor Ideas Potcasts, Cannabis News and Stocks on the Move; (TSXV: VLNS) (TSX: VFF) (NASDAQ: VFF) (CSE: HOLL) (CSE: AUSA)
Today's podcast overview/transcript:
Good afternoon and welcome to another episode of Investorideas.com "Potcast" featuring cannabis news, stocks to watch as well as insights from thought leaders and experts.
In today's podcast we look at a few public announcements.
But first, With momentum building for the use of psychedelic substances in the treatment of mental illness, addiction and trauma, Vancouver-based Numinus Wellness Inc. is now one of the first in-market, fully integrated companies in the psychedelic space in North America.
Numinus is an operating company at the forefront of the transformative change in treating the growing prevalence of mental health issues and desire for greater wellness. The company was created from the merger of Salvation Botanicals and Numinus Wellness Inc. and aims to go public via an RTO with Rojo Resources in Q1 2020, subject to exchange approval. Psychedelic therapies have been designated breakthrough therapy status by the FDA due to their promising therapeutic potential.
"While we are excited about the future of psychedelics, these substances will not be approved for recreational use; this is not cannabis," says Numinus CEO and Founder Payton Nyquvest. "Psychedelics are therapeutic, where the application of these substances will only happen in safe, controlled treatment environments."
Through Salvation Labs (a Numinus subsidiary), Numinus has a dealer's licence which allows Numinus to test, possess, buy and sell MDMA, psilocybin, psilocin, DMT and mescaline. Numinus is seeking to expand the licence to include activities such as import/export, testing and R&D. The expanded licence will allow Numinus to support the growing number of studies on the potential benefits of psychedelic therapies through the supply and distribution of these substances.
Numinus is currently operating a stand-alone centre offering patients integrative health solutions to help heal, connect and grow. A purpose-built facility is planned for Vancouver in 2020.
The company's goal is to create and operate a network of wellness centres offering a unique set of treatments that can be specifically developed for each individual. In future and when approved for use by appropriate regulatory bodies, Numinus aims to guide suitable candidates in the use of psychedelics. Numinus would conduct these therapies working in partnership with various health and research organizations.
Numinus is led by Payton Nyquvest and Stacey Wallin, proven entrepreneurs and business leaders who have benefitted from transformative therapies in their own lives. The pair has built a strong network of executives, advisors and partners to take Numinus to the market.
"The societal costs of mental illness, addictions, trauma and unmet human potential are much too high," Nyquvest says. "New approaches, new treatments and new ways of thinking are required - solutions where the world of health care and technology collide - to help individuals and communities heal, discover meaning and make deeper connections."
Key Financial Highlights of the Fourth Quarter and Fiscal Year 2019
- Revenue increased to $58.1 million for the fiscal year 2019. For the fourth quarter of 2019 revenue increased to $30.6 million, an 86.0% increase over the third quarter and above the high-end of the guidance range announced on December 16, 2019.
- Revenue of $1.25 per gram of input in the fourth quarter of 2019, compared to $0.61 per gram of input in the third quarter of 2019.
- Gross profit increased to $41.4 million, or 71.2% of revenue for the fiscal year 2019. For the fourth quarter of 2019, gross profit increased to $22.6 million, or 73.8% of revenue, compared to $12.8 million, or 77.8% of revenue for the third quarter of 2019.
- Adjusted EBITDA (1) was $27.4 million for the fiscal year 2019. For the fourth quarter of 2019, adjusted EBITDA was $17.7 million, or 57.7% of revenue, compared to adjusted EBITDA of $9.8 million, or 59.4% of revenue, in the third quarter.
- Strong balance sheet with $58.7 million in cash and short-term investments and a net working capital position of $88.2 million as at November 30, 2019.
"In Fiscal 2019 we added significant scale to our operations and became the largest white label product development, manufacturing and third-party extraction company in Canada," said Tyler Robson, CEO of Valens. "Our multi-year extraction contracts with industry leading players positioned us as the partner of choice in the industry and drove significant revenue, gross profit and adjusted EBITDA growth. In the second half of 2019, we broadened our offering to include white label product development and we now produce a broad portfolio of safe, consistent and innovative products to help our partners build brands and differentiate themselves in the market. These white label product development initiatives contributed to record revenues in the fourth quarter of 2019 as new and existing customers pushed to roll out Cannabis 2.0 oil-based products into the market. Our margins in the fourth quarter also remained strong and were only slightly lower than our Q3 results. However, we do expect this type of margin contraction to continue in the coming quarters as we build out our infrastructure and execute on our strategic shift towards becoming a next generation product company which offers increased opportunity and greater EBITDA per input gram but a more conservative margin profile. This strategic shift is now well underway and our white label contracts now outnumber our extraction contracts, and include top-tier names such as BRNT, Shoppers Drug Mart and Iconic Brewing."
Hollister Biosciences Inc. (CSE: HOLL) (OTC: HSTRF), a vertically integrated cannabis branding company with products in 220 dispensaries throughout California, announced that the Company signed a Letter of Intent on February 20th, 2020 to acquire Venom Extracts, one of Arizona's premier extract brands and one of the state's largest producers of award-winning medical cannabis distillate and related products.
For the year ended December 31, 2019, Venom Extracts reports having generated CDN$ 16.4 million in revenue and CDN$ 2.48 million in EBIDTA from its product line of Cannabis Concentrates, P.H.O Concentrates and Cartridges. Hollister cautions that revenue and EBITDA figures have not yet been audited and are based on reports prepared by Venom management. Though Hollister believes the figures to be highly reliable, their audit will be part of the due diligence before closing.
The all stock purchase price is anticipated to be CDN$ 20,000,000, with 70% to be paid upfront and 30% to be paid upon milestone achievements. The acquisition is expected to close by March 31, 2020 subject to normal course due diligence.
"Venom has established itself as a leading extraction operation with a prominent brand in the Arizona marketplace", said Carl Saling, Founder and CEO of Hollister Biosciences Inc. "We feel this acquisition will present a great deal of opportunity for synergy between Hollister and Venom, providing avenues for both companies into the Arizona, California and additional marketplaces for cannabis products. Venom Extracts has a highly skilled and experienced management team with a track record for operational excellence. This transaction is highly accretive and represents a fundamental part of the future growth of both companies."
Village Farms International, Inc. (TSX: VFF) (NASDAQ: VFF) announced its majority-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms, has begun shipping branded, packaged dried cannabis products to Alberta Gaming, Liquor & Cannabis ("AGLC"), the provincial wholesaler of recreational adult-use cannabis products to private retailers in Alberta and the only authorized online retailer in Alberta (AlbertaCannabis.org). Pure Sunfarms expects its products to be available to retail customers in Alberta beginning next week.
With the launch of Pure Sunfarms' products in Alberta, Pure Sunfarms' products will be available in three of Canada's four most populous provinces (Ontario, British Columbia and Alberta) and accessible to nearly two-thirds of the Canadian recreational cannabis market1.
Alberta represents approximately 12% of Canada's population, however with a network of more than 400 retail stores (by far the largest retail store network of any Canadian province) generated 22% of total retail trade cannabis sales (dollars) in Canada for the 12-month period ended December 31, 2019 (2), making it the second largest provincial market for cannabis products in Canada. As a result, Alberta has by far the highest per capita sales of legal recreational cannabis amongst the four most populous Canadian provinces during that same period.
"At Pure Sunfarms, we aim to bring high-quality cannabis at an accessible price to recreational consumers across Canada - that's why we are so excited to expand our footprint into Alberta," said Mandesh Dosanjh, President and CEO, Pure Sunfarms. "With the province's extensive network of licensed retail outlets and strong retail sales, the Alberta cannabis market presents a substantial opportunity for Pure Sunfarms as we continue to share our high-quality BC bud with even more Canadians."
Pure Sunfarms continues to advance discussions with other provincial distributors for potential supply agreements to further expand its presence in the Canadian cannabis market.
Pure Sunfarms was also the top performing brand of dried flower by both kilograms sold and dollar sales with the Ontario Cannabis Store (OCS) for the three-month period ended December 31, 2019, achieving 13% market share (by kilograms sold). For the same period, Pure Sunfarms' Afghan Kush was the top selling dried flower product (by dollar sales) with the OCS and two of the top five selling dried flower products (by dollar sales) with the OCS were Pure Sunfarms products (Afghan Kush and White Rhino).
"Pure Sunfarms' reputation for quality products that customers want at the right price point is resonating well with Canadian consumers," said Michael DeGiglio, CEO, Village Farms. "2020 promises to be a year of significant growth for retail cannabis sales across Canada, and now, with access to nearly two-thirds of the Canadian population and a thriving brand, Pure Sunfarms is well positioned to participate in this market growth based on its leading market share performance."
Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) announced that Cocoon Technology, LLC is in the final phase of development and completing testing for the platform's deployment and initial launch with Thrive Cannabis Marketplace, Nevada's largest independently owned Cannabis Retailer, in April 2020. THRIVE has ordered 32 CocoonPod™ kiosks for their eight locations in Nevada, starting with the pilot location at 2755 W. Cheyenne Ave. #103, North Las Vegas, Nevada and will roll out to the other locations over the following six months. Cocoon expects to generate $1.4 million in annual recurring net revenue year one with net revenues exceeding $7.1 million over the four-year exclusive term with THRIVE.
"Our customers expect an elevated and streamlined experience when shopping at THRIVE," said Mitch Britten, CEO of THRIVE. "A self-service option provides customers an opportunity to experience the dispensary in an interactive and innovative way while streamlining operations. Customers are offered privacy, product education, recommendations, and loyalty offerings while completing their transaction at their leisure."
"We're excited to launch the Cocoon platform in Las Vegas," said Max Aceituno, SVP, Marketing & Product Development at AUSA. "As the world's most robust Platform-as-a-Service specifically designed for dispensaries, Cocoon enables customers to research products, place orders, and make payments directly through their desired point-of-interaction. THRIVE's high-traffic locations are the perfect environment for the initial launch of this platform and we're happy to collaborate with Mitch and team in crafting this unique feature set."
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