Canna Farms captures 68% of extracts market share with Ontario retailers
Initial shipment of Fireside X shatter sold out in BC in first week of sales
NAPANEE, ON, June 29, 2020 /CNW/ – VIVO Cannabis Inc. (TSX: VIVO) (OTCQX: VVCIF) ("VIVO" or the "Company"), a leading provider of premium cannabis products and services and holder of licenses under the Cannabis Act through its wholly-owned subsidiaries, Canna Farms Limited ("Canna Farms"), ABcann Medicinals Inc. ("ABcann") and Harvest Medicine Inc. ("Harvest Medicine"), is pleased to provide an update on its adult-use cannabis products.
VIVO recently made initial shipments of its Fireside X shatter product to several provincial wholesalers. Fireside X shatter represents the second significant concentrates product format launched by VIVO and is expected to make a significant contribution to the Company’s revenue. VIVO is the first licensed producer to sell shatter in the Canadian adult-use market. This launch is aligned with the commissioning of VIVO’s ethanol extraction suite at its Napanee, Ontario facility (NCC). VIVO expects to use high-quality cannabis grown in its Kimmetts airhouses as low production cost input for concentrate products.
"I am pleased to announce that our early shatter sales have exceeded our expectations. We have shipped to the Alberta and Ontario markets, as well as to British Columbia where the provincial wholesaler sold its entire inventory within the first week," said Gary McMullen, President of NCC. "Being first-to-market has been a strong focus for us." It is expected that NCC will be adding several other provinces and formats to its concentrate distribution portfolio in the coming months.
Cannabis Solvent-less Extracts
Solvent-less extracts are extracts produced by processes that do not involve the use of solvents. VIVO currently produces solvent-less extracts at its Hope, British Columbia facility (CFL) marketed under the Canna Farms™ brand. These include hash, bubble hash, rosin, kief and live rosin. The most recent publicly available information provided in the Ontario Cannabis Stores Annual Report for the year ending March 31, 2020 indicates Canna Farms™ had a market-leading 68% share of the concentrates at the Ontario retail stores. "We are pleased that our focus on the concentrate market is currently yielding strong results. Demand for these products in the illicit market is high compared to other categories and we have been able to take advantage of that opportunity early," said Brian McDonald, Vice President of Canna Farms™.
It is the Company’s belief that no other licensed producers currently produce solvent-less extracts. These products have been launched in several provinces and VIVO now sells adult-use products in eight provinces, with expansion to additional provinces expected in the second half of 2020.
VIVO continues to move forward on its recently announced territory rights deal with Vertosa, developer of a patent-pending infusion technology currently used in hemp and cannabis products across the US and the EU. Their customized water-compatible solutions are reported to accelerate onset time, prolong shelf-life, increase bioavailability, and improve the taste profile of cannabis-infused products. Working within current COVID-19 restrictions, arrangements are being made for Vertosa’s equipment to be shipped to NCC and for the Vertosa team to travel to NCC to oversee on-site equipment installation and commissioning. Once commissioned, VIVO believes it will be well-positioned to respond to demand for active emulsion in the cannabis beverage market.
Michael Torrey, Vertosa’s Director of Brand Strategy, said "After a careful review of the Canadian landscape, we at Vertosa are thrilled to have established this partnership with VIVO, a seasoned licensed producer well-known for premium cannabis products and services. Together, I believe we will help drive the Cannabis 2.0 movement in Canada by providing the necessary technology for trusted, high-quality, and reliable infused products."
Vertosa creates industry-leading active ingredients for infused product makers. Their patent pending nano- and micro-emulsions are carefully designed for the specific needs of each customer, with pre-suspended aqueous solutions that create homogeneous and stable products while maximizing bioavailability, clarity, and taste. Vertosa works closely with their lab partners and clients of all sizes throughout the manufacturing process to achieve target potency and accelerate products to market. Learn more about Vertosa at vertosa.com.
About VIVO Cannabis™
VIVO Cannabis™ is recognized for trusted, premium cannabis products and services. It holds production and sales licences from Health Canada and operates world-class indoor and seasonal airhouse cultivation facilities with proprietary plant-growing technology in Hope, British Columbia and Napanee, Ontario. VIVO has a collection of premium brands, each targeting different customer segments, including Canna Farms™, Beacon Medical™, Fireside™, Fireside X™, Lumina™ and Canadian Bud Collection™. The Company is expanding its production capabilities and distribution network. Harvest Medicine, VIVO’s patient-centric, scalable network of medical cannabis clinics, has serviced over 100,000 patient visits. VIVO is pursuing several partnership and product development opportunities and is focusing its international efforts on Germany and Australia. The Company has a healthy balance sheet and is well-positioned to accelerate its path to profitability. For more information visit: www.vivocannabis.com
Information in this news release with respect to Vertosa’s products and the properties and benefits thereof have been provided by Vertosa and have not been independently verified by VIVO. 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 VIVO and its management regarding the future. Forward-looking statements in this news release include statements: that Fireside X shatter is expected to make a significant contribution to the Company’s revenue; that VIVO expects to use cannabis grown at its airhouses as low production input for concentrate products; that it is expected that NCC will add several other provinces and formats to its concentrate distribution portfolio in coming months; that VIVO is expected to expand adult-use product sales to additional provinces in the second half of 2020; and that the relationship with Vertosa will well-position VIVO to respond to demand for active emulsion in the cannabis beverage market and help drive the Cannabis 2.0 movement in Canada. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the forward-looking statements, including: that the Company may not be able to increase the sales of its products in the current domestic market or successfully develop and launch new product lines in the time expected or at all; that the COVID-19 pandemic may last longer and have a more significant impact on the Company’s operations, the Canadian cannabis industry, or the global economy generally, than currently expected; that the Company may not be able to achieve competitive margins; that new products, if launched, may not be accepted by the market or may become subject to product liability claims; that the Company may not be able to obtain necessary licences; that demand for the Company’s products may not meet management’s expectations; that the timing of delivery and/or commissioning of the Vertosa equipment may be delayed, due to travel restrictions related to the COVID-19 pandemic or otherwise; that the Company may be unable to retain its key talent; that the Company may not be able to execute on its strategic partnerships; that the Company may not obtain any other necessary regulatory approvals as required from time to time; that the Company may be unable to protect its intellectual property; and other factors beyond the Company’s control. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors, and the more extensive risk factors included in the Company’s management’s discussion and analysis for the three months ended March 31, 2020, which is available on SEDAR, carefully in evaluating the forward-looking statements contained in this news release, and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements in this news release are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE VIVO Cannabis Inc.