Ventura Cannabis shares path to C$10 million revenue target, posts first financials as cannabis company

Ventura Cannabis and Wellness Corp (CSE:VCAN) outlined its plans to increase revenue generation as it reported its financials for the first quarter following the company’s transition into cannabis.

Los-Angeles based Ventura is a vertically integrated, California-focused cannabis company currently building its distribution channels via revenue sharing agreements with dispensaries.

The firm launched into the cannabis industry after a shareholder vote in April 2019 approving the change in business from addiction treatment to cannabis.

READ: Ventura Cannabis secures license to operate Sacramento dispensary

In a note to shareholders, Ventura put forward a path to achieve C$10 million in annual cannabis revenues for the first full year of operations, which will begin after the closing of five dispensaries and a vertically integrated product business currently under contract.

The first C$7 million will come from the five dispensaries, including Amberlight, a Portland dispensary that will provide a model for its California dispensaries. The remaining C$3 million will come from sales targets of $600,000 per year or $50,000 per month from each of the five retail locations.

Chris Heath, president of Ventura, said he was “pleased” with the company’s first quarter as a cannabis company.

“We held a shareholder vote to transform ourselves into a cannabis company, closed our first cannabis deal, executed purchase agreements to add seven million dollars in annual revenue and built a significant pipeline of acquisition targets,” he said.

“We also improved many marketing and operational aspects of our first acquisition, Amberlight, giving us the confidence to increase our quarterly cannabis revenue projections for the second fiscal quarter.”

First quarter revenue

Revenue during the quarter was largely driven by Ventura’s acquisition of Amberlight, with total cannabis revenue for the period ended May 31 reaching C$93,000.

Since closing the Amberlight deal and implementing several operational improvements, Ventura’s management increased the total estimated cannabis revenue guidance for the next quarter from C$225,000 to over C$300,000, it said in the results release.

The company also told shareholders that revenues associated with addiction services decreased, due in part to the disposition of certain assets in the business unit in exchange for cash. It posted C$4.3 million in revenue from its addiction treatment business during the first quarter.

Total cash on hand at the end of July was C$4.4 million.

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Story by ProactiveInvestors