- Net revenue of
$5.5 million – a decrease of 11% over Q4 2020 - Vanluven facility received EU-GMP certification allowing
VIVO to export cannabis products for sale inEurope andBeacon Medical Germany GmbH received an import license to allow imports of medical cannabis - Released brick hash as part of
VIVO's Cannabis 2.0 product lineup and expect to release a new line of topicals in Q2 2021,VIVO's 9th and 10th product formats, respectively - Closed an
$8 million equity offering inFebruary 2021 , including the full exercise of the over-allotment option
Management Commentary
"In the first quarter of 2021,
Financial Summary
The Canadian Cannabis industry continues to face strong headwinds caused by retail price compression and customer inventory rationalization.
Net revenue for Q1 2021 was
Sales, general and administrative expenses were
The Company's adjusted EBITDA(1) was
Key Performance Indicators
KPI (P&L amounts in millions) | Q1 2021 | Quarter-over- | Q4 2020 |
Net Revenue | -11% | ||
SG&A | -20% | ||
Adjusted EBITDA (1) | ( | -50% | ( |
Cash and equivalents | 197% | ||
Active patients (2) | 17,200 | -23% | 22,200 |
Net flower price per gram | 5% |
(1) | Adjusted EBITDA is not a measure of financial performance under IFRS. For the Company's definition of Adjusted EBITDA, see the Company's management's discussion and analysis for the three months ended |
(2) | Represents active patients (as of the end of the quarter) who purchase medical cannabis directly from the Company. Note the six-month extension on expired authorizations by |
Business Update
1. Enhance Supply and Production Capabilities
VIVO continues to advance the integration of itsNapanee , Ontario andHope, BC operations in response to the streamlining of its Napanee operations in October 2020. The Company'sNapanee operations focus on extraction, product formulation and EU-GMP related processes. The Company'sHope operations focus on indoor cannabis cultivation, packaging and solventless extracts and concentrates.VIVO continues to expand its premium dry flower cultivar offering with the addition of two new Canna Farms™ listings inPrince Edward Island : Pink Kush large format flower and multi-pack of pre-rolls.VIVO anticipates these will be available for purchase by the end of Q2.VIVO continues to expand its product portfolio inQuebec with the addition of three new Canna Farms™ listings: CBD Critical Mass flower, CBD Canna Bliss flower and pre-rolls.VIVO anticipates these to be available for purchase in Q3.VIVO is focused on developing new cultivars and continues to invest in phenotype hunting to provide unique genetics to cannabis markets across its entire portfolio of brands.- Although the airhouses at the Kimmetts Facility in Napanee suffered damage during a powerful winter storm, the Company has assessed the situation and has repaired and inflated one airhouse to be used in 2021. In 2020, the airhouses provided better than expected growing conditions. The cannabis plants cultivated in the airhouses grew much larger than anticipated, and much larger than was ideal. Due to the low price of biomass following the 2020 growing season,
VIVO will use the 2021 growing season to determine the optimum protocol to follow to harness the airhouses' ideal environment to cultivate premium flower. - The Company's ethanol extraction suite at the Vanluven Facility continues to produce high quality cannabis extracts and distillates for use in many of
VIVO's products as well as for use in producing the Company's emulsions made under its partnership with Vertosa. The Vanluven Facility's focus is on the processing and manufacturing of quality oils, distillates, concentrates and more advanced formulations of VIVO's current and anticipated portfolio of medical products, as well as edibles and topicals.VIVO has invested in automated packaging and labelling equipment which are expected to increase its finished goods throughput and lower manufacturing costs.
2. Create a Broad and Loyal Customer Network
VIVO continues to focus on supplying quality premium cannabis products, allowing the Company to maintain high prices for its medical and adult-use dry flower products, with a net average selling price of$6 .28 per gram for the three months ended March 31, 2021.- Canna Farms™ Pink Kush and Girl Scout Cookies flower and pre-rolls received 'Craft Cannabis' designation by
Ontario Cannabis Store (OCS) as one of 20 Licensed Producers. Craft flower is hand-trimmed, hang-dried, hand-packaged, and grown in a facility that produces less than 10,000 kg of dried cannabis (or equivalent) a year. - In
January 2021 , VIVO entered theQuebec market with Canna Farms™ BC Kief as the province's first in the kief category.Quebec is the third largest market inCanada and the ninth province whereVIVO products are available. In May,VIVO obtained new listings with Société Québécoise du Cannabis (SQDC) for CBD Canna Bliss flower & pre-rolls and CBD Critical Mass flower and expects them to be available for purchase in Q3 2021.VIVO is proud to be one of a handful of participants permitted access to theQuebec market. - VIVO continues its supply and its clinic services agreement with Medical Cannabis by Shoppers™. Over the first quarter of 2021, Medical Cannabis by Shoppers™ continued to grow its selection of
VIVO Cannabis products. VIVO's family of brands, each targeting a specific market segment, include Canna Farms™, Beacon Medical™, Fireside™, Lumina™, Harvest Medicine™ and CanadianBud Collection™ . The Company currently sells over 100 stock keeping units.VIVO launched an updated Canna Farms™ website in May with refreshed branding, improved user design and overall consumer experience. Updates to the Canna Farms™ Instagram channel, internal patient newsletters and trade materials were also implemented for an omnichannel approach to drive traffic to the website as part of the integrated marketing strategyVIVO's Fireside™ brand launched a new store locator to help consumers gain access to retailers in their province that carry Fireside™ products.VIVO expects the store locator to help consumers and retailers alike, as local retailers and small businesses have faced numerous challenges over the past year given the continued changes to market dynamics as a result of COVID-19. Visit https://www.firesidecannabis.com/shop/ for more information.Canna Farms operates an industry-leading online medical cannabis platform, (https://www.cannafarms.ca). Combining the Company's Beacon Medical™, Fireside™, Lumina™, Canna Farms™ and CanadianBud Collection™ brands, with products from third-party cultivators in one on-line medical store is believed to offer a distinct benefit for patients looking for a single location to access a broad selection of medical cannabis products.Canna Farms' platform represents one of the largest medical cannabis suppliers in Canada.
In VIVO's cannabis clinic segment, Harvest Medicine ("HMED") operates a portfolio of four education focused, patient-centric, cannabis discovery clinics, including a 3,500 square foot clinic located in
As noted below under the heading "Current Outlook – COVID-19 Pandemic", the Company temporarily suspended in-clinic visits at its Harvest Medicine clinics but the Company's HMED Connect telemedicine platform is proving to be of increased service to the medical cannabis market as the general public has become increasingly conscious of social distancing and more patients are choosing to remain at home. HMED's telemedicine platform brings medical cannabis information and services to patients across Canada, allowing them to access the same patient-centric services they would receive in HMED clinics, on-line.
3. Build an
- After the signing of an exclusive agreement with
Vertosa Inc. (an infusion technology company based inOakland, California ), for Canadian production rights, Vertosa's equipment was installed at the Vanluven facility. VIVO continues to build on its emulsion supply agreements with multiple cannabis beverage bottlers with others pending.VIVO expects to have a record year in 2021 given the number of recognized brands that will leverage Vertosa emulsions. VIVO continues to advance its product development with partner,Pharmascience Inc. , a global pharmaceutical company based inMontreal, Quebec , for a unique line of specific medical cannabis formulations produced under pharmaceutical quality standards.VIVO believes that a significant catalyst to increased medical cannabis use is the introduction of new medical-grade, precise-dosed, stable formulations, which the partnership withPharmascience is intended to target.Pharmascience recently received its highly anticipatedHealth Canada license to produce cannabis products; the first products from this partnership are expected to be introduced to the Canadian market by Q4 2021.- Canna Farms was BC's first licensed producer and proudly holds itself to the highest cultivation standards. In 2020 it was recognized by Brightfield Group as the brand with the 4th highest Brand Awareness.
VIVO is committed to pursuing innovation throughout its value chain. The Company uses data insights gained from Harvest Medicine's clinics and fromCanna Farms' medical cannabis platform as a foundation for the development of novel products that meet patients' needs and giveVIVO a competitive edge.
4. Accelerate International Medical Business Growth
- On
March 11, 2021 VIVO's Vanluven facility inNapanee Ontario received EU-GMP (European Union Good Manufacturing Practices) certification fromGermany's Brandenburg health authority, the Landesamt für Arbeitsschutz, Verbraucherschutz und Gesundheit ("LAVG"). The certification took effect immediately and will enableVIVO , through its ABcann Medicinals subsidiary, to export product for sale into European and other markets requiring products to be manufactured under the rigorous EU-GMP standards. ABcann has harvested its first lot of whole flower slated for EU-GMP production. Australia's Therapeutics Goods Administrator (TGA) continues to report a record number of new patient approvals and triple digit growth in patient approvals year-over-year. The growth in the market has been matched by the growth inVIVO's Beacon Medical Australia business. Data released by Stats Canada show thatVIVO exported a record 18% of dry flower shipped toAustralia in 2020. VIVO is well positioned to capitalize on this rapidly growing market and currently sells 5 products under the Beacon Medical Brand.
The Company is selectively expanding its international medical footprint, to enter new high-growth markets. The Company is following a capital-light approach owning no properties or major assets overseas, with an intense focus on go-to-market execution, leveraging strategic partnerships and pharmaceutical experience to ensure success.
COVID-19 Update
In 2020 and early 2021, the global economy, and society generally, has been in a state of upheaval as a result of the COVID-19 pandemic. This crisis continues to have an unprecedented impact on the markets, employees, customers, patients, and business partners.
These impacts include less demand for premium cannabis, downward pricing pressure, lower than expected adult-use market growth, production inefficiencies due to staffing challenges and enhanced safety procedures, travel limitations, and limited sales interactions.
Harvest Medicine continues to limit in-clinic visits while expanding the use of its HMED Connect telemedicine platform for phone and video consultations. Harvest Medicine continues to monitor and assess the reopening of its locations.
Q1 2021 Results Video
An earnings overview video will be available on the
About VIVO Cannabis™
VIVO Cannabis™ is recognized for trusted, premium cannabis products and services. It holds production and sales licences from
Disclaimer for Forward-Looking Information
All dollar amounts in this news release are in Canadian dollars. Certain statements in this news release are forward-looking statements, which are statements that are not purely historical, including statements regarding the beliefs, plans, expectations or intentions of
SOURCE
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