VENTURA CANNABIS ANNOUNCES EARLY RELEASE OF QUARTERLY FINANCIALS; POSTS 341% IN QUARTER-OVER-QUARTER CANNABIS REVENUE GROWTH WITH 38% GROSS MARGINS; INCREASED CASH TO $4.5 MIILION; BOLSTERS BOARD WITH SALES AND MARKETING EXPERT
LOS ANGELES, October 28, 2019 (Global Newswire) –Ventura Cannabis and Wellness (CSE: VCAN) (“VCAN”, “Ventura”) announced it posted financial statements for the period ending August 31, 2019, its second fiscal quarter. Additionally, it has added Lloyd Kaplan, a seasoned sales and marketing executive to the Board as a non-executive Director.
- 341% growth in Cannabis revenues with as compared to the previous quarter, rising from $92,000 for the quarter ending May 30, 2019 to $402,000 for the quarter ending August 31, 2019.
- 38% Gross Margins on Cannabis revenues.
- Cash increased to $4,531,340 for the quarter ending August 31, 2019.
- Improved several aspects of the cannabis business (acquired during the quarter ending May 30, 2019) to increase revenue and margins including:
- Increased revenues by extending operating hours, adding new digital marketing and holding a monthly festival like event with outside vendors and food trucks to encourage spending and engage the community.
- Broadened the product offerings to include a robust array of cannabis and non-cannabis products to increase individual transaction size.
- Improved margins by increasing the prices of certain products, expanding the availability of higher priced and higher margin product tiers. Reduced overall product costs by rationalizing supply change management.
- Reduced staffing and associated costs by more than 25% by streamlining the staffing model and outsourcing key business functions.
- As expected, addiction services revenues continue to decline as those assets are divested and resulting cash collected. This trend is expected to continue until these assets are fully divested and associated revenues eliminated by the end of the fiscal year.
- The Company has no debt other than mortgages associated with the real estate assets.
A Review of the Growth Strategy
Ventura Cannabis and Wellness Corp. is focused on brand ownership and targeted market demographics as its revenue growth strategy. It plans to operate primarily on the west coast of the U.S. and has the balance sheet and flexibility to acquire or build cannabis assets that meet its core requirements: growing revenue, sustainable cash flow generation and a unique market position.
In the first fiscal quarter of 2020, shareholders approved the disposition of the rehab addiction centers and overwhelmingly affirmed a new direction for the acquisition and development of revenue generating cannabis assets. In the seven months since, management has generated two quarters of growing cannabis revenues as well as finalizing the disposition of the rehab assets. While the net cash from disposition is difficult to calculate, management expects most of the cash collected can be used to acquire or develop cannabis assets.
Additional Board Member
Lloyd Kaplan has been added to the Board of Directors as a non-executive Director. Residing in California, Mr. Kaplan acts as an investor and consultant to fast growing businesses, including those in the California cannabis market.
Previous to his most recent involvement in the California cannabis market, Mr. Kaplan was a senior executive and founder of iSuppli Corporation, working for almost ten years building the company with marketing partnerships including Goldman Sachs. iSuppli was acquired by HIS, Inc., a NYSE listed company (NYSE:IHS) in 2010 for $100 million USD. Prior to starting iSuppli, Lloyd was an Executive Vice President at Avnet, the world’s largest Electronics Distributor and was responsible for marketing and managing global supplier relationships. He was also the Director for Avnet Design Services, the distributor’s technical support model for ASIC designs, systems engineering and design-win sales. His career also includes senior technical sales and marketing positions at Phillips Electronics and Hughes Aircraft.
“We saw a considerable percentage increase in cannabis revenue growth this quarter,” said Chris Heath, President of Ventura. “For the better part of a year, we have been working on investing time and energy in targeted markets to build our business and we are starting to see the financial results. While we are still a very small business, we are just getting started. We have cash in the bank and no debt. We are working on many different paths to increase our cannabis revenue growth, both in terms of acquiring existing assets as well as developing assets from the ground up. We will remain disciplined on how we invest our cash to ensure our investment in any deal provides measurable returns.”
“As for the current quarter ending November 30, while I expect to see growth, we are continuing to await the process of regulatory approvals for our projects that will generate significant additional revenue,” continued Mr. Heath. “Once these approvals are granted, I expect our future quarters will reflect the kind of growth we saw this quarter. We will spend the next few quarters wrapping up the rehab disposition and finalizing the projects currently underway, including an application to be one of just fourteen licenses in Utah. Finally, I would like to welcome Mr. Kaplan to the Board. I believe his business experience and expertise will benefit us greatly as we turn the corner into a fast-growth mode.”
For more information contact:
Ventura Cannabis and Wellness Corp.
Certain statements contained in this presentation constitute “forward-looking information” as such term is defined in applicable Canadian securities legislation. The words “may”, “would”, “could”, “should”, “potential”, “will”, “seek”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect”, “confident” and similar expressions as they relate to the Company. Such statements reflect the Company’s current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties, and assumptions. The forward-looking information included are made as of October 28, 2019, and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. VCAN holds or is acquiring marijuana assets in the United States. Previously disclosed acquisitions are still subject to closing. Marijuana is legal in each state VCAN is looking to operate, however marijuana remains illegal under US federal law, and the approach to enforcement of US federal law against marijuana is subject to change. Shareholders and investors need to be aware that adverse enforcement actions could affect their investments and that the Company’s ability to access private and public capital could be affected and or could not be available to support continuing operations.