PALM BEACH, Fla., Feb. 16, 2021 /PRNewswire/ — It seems that every new report concerning future revenues for the legal cannabis market, projects higher numbers that all previous reports. What they DO agree on is that the market has had several robust years of recent growth and shows every sign that the future will continue to outperform projections. A report from Arcview predicted that global legal cannabis sales will hit $42.7 billion by 2024, but it was quickly outpaced by a report from Grand View Research that said that the global legal marijuana market size is expected to reach USD 73.6 billion by 2027, and it is anticipated to expand at a CAGR of 18.1% during the forecast period. The increasing legalization of cannabis for medical as well as adult-use is expected to promote growth. The Grand View report said: “On the basis of type, the medical segment held the leading revenue share of 71.0% in 2019, owing to the growing adoption of cannabis as a pharmaceutical product for treating severe medical conditions, such as cancer, arthritis, and Parkinson’s disease, and Alzheimer’s disease among other neurological conditions. Moreover, the increasing need for pain management therapies along with the growing disease burden of chronic pain among elders is expected to boost the product demand. Based on product type, the legal marijuana buds segment accounted for the largest market share in terms of revenue… Buds are primary plant products and are readily available without any processing, which makes them relatively affordable for low-income patients. Moreover, the rapid onset of action of smoking buds compared to other types is anticipated to further fuel the segment growth.” Active Companies active today in the cannabis related markets include: Item 9 Labs Corp. (OTCQX: INLB), Tilray Inc. (NASDAQ: TLRY), Aphria Inc. (NASDAQ: APHA) (TSX: APHA), MedMen Enterprises Inc. (OTCQX: MMNFF) (CSE: MMEN), Curaleaf Holdings, Inc. (OTCQX: CURLF) (CSE: CURA).
Grand View continued: “Based on medical applications, the chronic pain segment dominate(s) the legal marijuana… owing to the presence of a large patient pool. On the other hand, mental disorder application is expected to witness the fastest growth over the forecast period owing to the growing number of patients suffering from mental disorders, such as anxiety disorder, depressions, and Alzheimer’s disease. Based on geography, North America held the largest revenue share at 88.4%… owing to the increasing legalization of medical marijuana and liberalism of government regulations regarding the same. The legalization of medical cannabis in Canada, Israel, and some countries in Europe and South America owing to its multiple therapeutic applications is expected to promote growth. Moreover, the recent legalization of cannabis for medical purposes in countries like Australia, Germany, and Poland is expected to create lucrative opportunities for market stakeholders.”
Item 9 Labs Corp. (OTCQX: INLB) Item 9 Labs Reports Record Revenue of $3.0 Million for First Quarter Fiscal Year 2021, Up 98% Year over Year – Revenue growth fueled by strong market demand and increases in cannabis production – Item 9 Labs Corp. (“Item 9 Labs,” or the “Company”), a vertically integrated cannabis operator that produces premium products, today reported operating and financial results for the three months ended December 31, 2020, the Company’s first quarter for fiscal year 2021 (“Q1 FY2021”). Company is poised for accelerated revenue growth in 2021, driven by adult-use legalization in Arizona, approved expansion plans for cultivation in Arizona, and additional distribution channels through merger with ONE Cannabis Group – parent company of national dispensary franchise Unity Rd.
Key Financial Highlights for Q1 FY2021 (compared with Q1 FY2020)
- Revenue increased 98% to $3.0 million
- Gross profit increased 195% to $1.4 million
- Gross margin increased 15% to 47%
- Operating loss decreased 70% to $0.4 million
- Operating expenses as a percentage of revenue declined from 110% to 59%
- Positive Adjusted EBITDA of $0.4 million increased by $1.1 million from a loss of $0.7 million
Key Business Highlights for Q1 FY2021
- Finalized merger agreement with ONE Cannabis Group (“OCG Inc.”), to add unique franchising capabilities and significantly enhance the Company’s retail distribution network, in December 2020; expected to close in early 2021
- Received approval for 45-acre marijuana cultivation site expansion in Coolidge, Arizona in November 2020
- Arizona’s Proposition 207 Adult-Use Cannabis Initiative successfully passed in November 2020
Management Commentary – “We are extremely pleased with our strong first-quarter performance, as we continued to grow revenues and improve margins and profitability,” commented Item 9 Labs Chief Executive Officer Andrew Bowden. “Our results exceeded our internal projections, with sequential quarter-over-quarter revenue growth rate of 21% and positive adjusted EBITDA of $0.4 million.”
With the successful passage of Proposition 207 for adult use in Arizona, it is expected that the state’s total legal marijuana market will near $1.5 billion in the next three years.
“The high penetration of our award-winning products in existing Arizona dispensaries, coupled with operational expansion, puts us in strong position to capture additional market share,” said Bowden, adding that the first phase of cultivation site expansion will increase the Company’s operational footprint by more than 300% and create 60 jobs in the next 12 months. He continued, “Our expansion plans and streamlined production process have us well-prepared for the year ahead.”
“Outside of Arizona development, we look forward to closing our pending merger with ONE Cannabis Group and their cannabis franchise Unity Rd.,” said Bowden. “The business combination is expected to increase our branded product footprint via national distribution through the Unity Rd. dispensary franchise platform. It will also add a predictable recurring revenue stream through franchise royalty fees.” The Company filed its Form 10-Q on February 16, 2021. Click here to view. Read the full Press Release that includes more Financial Results details for INLB at: https://www.financialnewsmedia.com/news-inlb
In other active company news in the markets this week:
Tilray Inc. (NASDAQ: TLRY), a global pioneer in cannabis research, cultivation, production, and distribution, recently announced it has established an agreement with Grow Pharma to import and distribute Tilray’s medical cannabis products into the United Kingdom (UK). This agreement allows Tilray to provide authorized UK patients in need with a locally maintained supply of medical cannabis solutions.
Tilray expects to have a range of GMP-certified, medical cannabis products available for patients in the UK by March 2021. Patients looking to use medical cannabis will have access to Tilray products in the UK by obtaining prescriptions through private practice or the National Health Service (NHS). Brendan Kennedy, Tilray’s Chief Executive Officer, said, “This partnership with Grow Pharma provides patients in need access to a sustained supply of GMP-certified, high-quality medical cannabis and is an important step in improving access in the UK. Tilray will continue to advocate for reasonable patient access to medical cannabis in Europe and countries around the world.”
Aphria Inc. (TSX: APHA) and (NASDAQ: APHA), a leading global cannabis-lifestyle consumer packaged goods company inspiring and empowering the worldwide community to live their best life, recently announced Denise Faltischek, Aphria’s Chief Strategy Officer, will also assume the role of Managing Director of Aphria Germany, effective January 23, 2021, reporting to Irwin D. Simon, Aphria’s Chairman and Chief Executive Officer. Ms. Faltischek joined Aphria in September 2019with extensive consumer-packaged goods experience and expertise leading over 50 acquisitions. She leads Aphria’s global business strategy and oversees Aphria’s medical and international business segments as well as quality function.
Irwin D. Simon commented, “Denise has been instrumental in leading our strategic initiatives in Canada and internationally as we’ve scaled our operations. We are excited for her to further expand her role by also leading our day-to-day operations in Germany where she has worked closely with the team since joining Aphria. In Germany, we are leveraging our strong medical platform and our multifaceted international operation, which combines in-country cultivation, import permits and large distribution infrastructure to increase access and availability to high-quality, consistent medical cannabis for patients. In establishing our international footprint in Germany, we invested in the completion of our in-country cultivation facility and distribution network in Neumünster, Germany.”
MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) recently announced the relaunch of its signature house brand, MedMen Red in all California and Nevada locations. The line, first introduced in November 2019, is the intersection of premium quality and value, providing our customers with exceptional cannabis products at very compelling prices. Cultivated locally in each state through a meticulous growing process, which takes about 14 weeks from seed to sale, every product is carefully considered.
“MedMen is proud to relaunch its popular MedMen Red products in California and Nevada. MedMen is committed to providing high quality products for our customers,” said CEO and Chairman of the Board Tom Lynch. “And through MedMen Red we can guarantee our customers the standard of product they have come to expect from the MedMen brand.”
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) a leading U.S. provider of consumer products in cannabis, recently announced the opening of Curaleaf Jacksonville San Jose, the Company’s 100th dispensary nationwide.
The opening of Curaleaf Jacksonville San Jose, located at 9760 San Jose Blvd, follows the recent opening of Curaleaf St. Petersburg North, and is the second of four new dispensaries that Curaleaf plans to open this month in Florida, one of the country’s fastest-growing medical cannabis markets. By the end of February, Curaleaf’s planned footprint will include 37 dispensaries in Florida and 102 nationwide. “Reaching 100 dispensaries nationwide is a remarkable milestone and Curaleaf is honored to be a trusted source for high-quality cannabis products and education for patients in Florida and communities across the country,” said Joe Bayern, CEO of Curaleaf. “As the Florida medical program continues to grow, Curaleaf’s expansion in the state will create jobs and better serve patients by providing more convenience and access to the critical services and products they need.”
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