VIVO Cannabis Inc (OTCMKTS:VVCIF) has posted revenues of $9.5 million in Q4 2019. It is an increase of 9% when compared to the previous quarter. The company has reported revenues of $31.8 million in 2019. It is an increase of 139% when compared to the previous year. The company’s marketing and sales expenses are higher in 2018 because of the inauguration of the adult-use market in October 2018. It has scaled the marketing efforts mainly because of restrictions imposed on promotional activities and advertising post-legalization.
Higher prices for adult-use and medical dry flower products
Vivo has maintained higher prices for its adult-use and medical dry flower products. The net average selling price per gram is $6.54 in Q4 2019 and $7.02 in 2019. Vivo has derived the majority of the revenues in 2019 from the sale of cannabis products to adult-use retailers, provisional wholesalers, and patients. Harvest medicines contributed to balance 15% to the company’s sales.
Capital spending for 2020
Vivo has paid for the facility expansion projects in 2019. It expects capital spending of $5 million in 2020. The company expects to accrue profits through market expansion overseas and by investing in product development.
Achieves significant progress in 2019
Vivo has achieved significant progress in 2019 in executing the four strategic priorities. Its achievements in 2019 include the introduction of innovative products, expanding the network of loyal customers, and improving production capabilities. The company expedited the initiatives in two high growth markets overseas. It will focus on these four priorities to improve value for the shareholders in the long-term and maintain profitability.
Improves production and supply capabilities
- The company has focused on capacity expansion, financial stability, and capital stewardship. It also scaled up the production to meet the growing demand from consumers and the patients. In 2020, its internal annual cultivation capacity will remain at 12,000 kg. The company converted some cultivation space in the new and existing facilities for post-harvest activities to meet the evolving needs in the market.
- It continues full-scale planting activities in Nipanee, Ontario’s seasonal air houses in the spring of 2020.
- Construction of Canna Farms phase 5, ethanol extraction on large scale, commissioning of pre-roll equipment, and high-speed packaging equipment to minimize unit costs and ramp up production.
- Achieved significant progress in addressing the observations after the EU-GMP inspection of Vanluven facility.