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Ventura Cannabis (VCAN) Updates Investor Presentation After Reaching Several Milestones; Adds Senior Managers to Support Growth Plan; Announces Investor Meetings in Toronto
LOS ANGELES, May 27, 2019 (GLOBE NEWSWIRE) — Ventura Cannabis and Wellness Corp. (CSE:VCAN) (“Ventura Cannabis”, “VCAN”, or the “Company”) is pleased to announce it has posted an updated investor presentation to its investor website www.venturacanna.com
In connection with the presentation, members of the management team will meet with bankers and investors in Toronto starting May 28th. Institutional investors and wealth advisors are invited to ask for a meeting by emailing firstname.lastname@example.org.
The presentation covers the next steps to generate cannabis revenue growth in the immediate term now that Ventura Cannabis has secured the Cannastar brand asset, a vertically integrated California cannabis product company with projected annual sales of $750,000 and estimated EBITDA of $150,000.
On March 1, 2019, the Board outlined its most pressing milestones:
- Successfully completing the shareholder vote to change business lines from addiction treatment to cannabis. Shareholder vote results announced April 23, 2019.
- Securing, through acquisition or application, three types of state and city-issued licenses: a manufacturing license, a distribution license, and a cultivation license in California. Purchase agreement announced May 8, 2019.
- Closing the previously announced acquisitions, which include dispensing licenses, totaling an estimated $2.1 million per year in annual cannabis revenues. * First closing announced May 6, 2019.
- Build a large and growing pipeline of dispensary acquisition targets, continually looking to reduce the pre-closing revenue multiple price. Pipeline announced May 27, 2019 in investor presentation.
- Divesting the two inpatient/detox addiction treatment centers while retaining the rights to supply cannabis to patients to generate additional cash to invest in cannabis assets. First LOI announced May 14, 2019.
Now that the Company has successfully pivoted from an addiction treatment business to a cannabis company and accomplished its initial major milestones that provide a platform for cannabis revenue growth, Ventura Cannabis is pleased to announce it has promoted Jacob Gamble to Vice-Chairman.
“When I was asked to be an agent of change in this company in August of last year, I thought our transition might take up to 18 months to complete,” said Mr. Gamble. “I am pleased that the Board and the management team backed the transition plan and adopted a sense of urgency. Just ten months ago, this company was struggling with a growth plan in a low multiple and stagnant business and needed a direction that could increase the share price and create a sustainable growth business. Today, as we look back, we took many steps very quickly to change our momentum and our accomplishments culminated this month, far sooner than I originally anticipated, with the agreement to acquire a fully integrated California cannabis product company with brand potential.”
“With this acquisition, and once we close the additional dispensary deals we have under contract or LOI, we can target rapid quarterly growth. Again, it took many steps and we arrived far sooner than expected. This was primarily due to the hard work and my close partnership with Chris Heath. I am pleased I decided to transition from a consultant to the CEO in January, that is when I became a large shareholder, and I am even more pleased that I have been appointed to Vice-Chairman now that we have our strategy and have a platform for growth set. I am looking forward to my involvement and ownership in the next phase of our business – revenue growth.”
Further, the Company has appointed Chris Heath as President as the focus turns to dispensary acquisitions under the owner-operator model Mr. Heath implemented for Ventura’s past rehab businesses. Mr. Heath’s owner-operator model increased revenues and cash flow and reduced expenses two years ago in the addiction treatment business when implemented, providing the opportunity and cash to change the Company to a cannabis business without any financing.
“Now that we have successfully completed our transition into a fully vertically integrated California cannabis company with the last announced purchase agreement, we need to focus on executing on our dispensary acquisition growth plan,” said Mr. Gamble. “We plan to do this in a way that really only Chris Heath has shown success and expertise in – generating revenues and cash flow through an owner-operator model for dispensaries. I have worked with Chris daily for ten months now. He is the perfect choice to execute on our dispensary growth plan. He is surrounded by a capable group of board members and Craig Lipsay as our capital markets advisor. He has adopted our sense of urgency and I am looking forward to working with him to continue our success.”
The Board has outlined the next two milestones that are intended to increase quarterly revenues:
- Building out VCAN’s network of dispensaries with an owner-operator model, as well as immediately placing the first generation Cannastar product in VCAN owned dispensaries.
a. Closing current California Purchase Agreements, LOIs and Term Sheets (totally $11.3M in potential annual revenues).
b. Submit additional applications for “de novo” dispensaries, targeting locations where deals already under Term Sheet/LOI/Purchase Agreement are located, to put pricing pressure on deals pre-closing.
c. Where possible, close less expensive deals to achieve $10M run rate target by February 2020 with as little cash deployment as possible.
d. Continue to build acquisition pipeline to reduce pre-closing multiples.
- Finalizing the second generation Cannastar branded product line for launch into the California market with particular focus on the four identified segments:
a. Ages 65+ seniors
b. Ages 40-55 upwardly mobile professional women
c. Ages 40-55 upwardly mobile professional men
d. Sufferers of opioid addiction
“First, I want to thank Jacob for his work in developing our vision and instilling a sense of urgency and communication. He has created a culture of urgency and leadership this company was lacking. We are now very different and our achievements to date reflect that change,” said Chris Heath, President of Ventura Cannabis. “As we near the end of our first quarter, our new team and new board has made tremendous progress on our initial milestones we set out for ourselves in March. We held our shareholder vote to change into a cannabis business. We secured a California license to be a vertically integrated cannabis company. We closed our first dispensary deal, bringing in an estimated $900,000 in annual revenue and $100,000 in contributing EBITDA. We have another $7.4 million in revenues under contract or LOI, including the product company with an estimated $750,000 in annual revenues and $150,000 in contributing EBITDA. We have a large pipeline of acquisition and application targets. We have also found opportunities to reduce acquisition pricing even after we execute a purchase agreement, supported in part by competitive pressures from sellers or cities willing to grant applications in similar locations. Additionally, we gain a management team with the product company that is focused on a second generation product and brand development.”
“Our next two milestones are first to expand our California dispensary network through acquisition or application all while pushing our product line through the network and, second, to finalize our second generation CannaSun product line, including next generation branding, design and dosage control,” continued Mr. Heath. “I am confident we can execute on these two milestones with the same urgency we had with our previous milestones, and the expected result in the next several quarters will be excellent growth in our cannabis revenues in our reported quarterly statements.”
Ventura Cannabis has also appointed Andrew Cross as Chief Financial Officer. Mr. Cross has finance experience in several sectors of the global economy ranging from EIC Education, an education company based in Shanghai, to a multi-billion dollar medical device company Don Joy Orthopedics (DJO), which was a publicly traded company before being acquired by Blackstone. Mr. Cross has also served as an advisor in the areas of audit, regulatory accounting and financial structure for several international financial and banking businesses. Before coming to Ventura Cannabis Mr. Cross advised several cannabis companies on 280E tax matters and other regulatory issues facing cannabis companies in the U.S. Mr. Cross has a Bachelor’s of Science (B.S.) degree from the University of California at Los Angeles (UCLA).
“I would like to welcome Andrew to the team,” finished Mr. Gamble. “He has been consulting with us for a few months now and has shown a very good command for both public securities accounting and California cannabis finance with its significant regulatory complications. As we move into the operational part of our strategy, Andrew will be a strong asset to the team.”
*Closing of binding purchase agreements is dependent upon regulatory approvals, lease amendments and satisfaction of other conditions.
Nitin Kaushal: Non-executive Chairman
Mike Hynes: Non-executive Board Member
Jacob Gamble: General strategy and timelines for execution – Vice Chairman
Chris Heath: Execution of owner-operator acquisition model – President (CEO)
Andrew Cross: Financial accounting and regulatory compliance for California cannabis – Chief Financial Officer
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 the date of this release 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 VCAN’s ability to access private and public capital could be affected and or could not be available to support continuing operations.