Indiva Limited the leading Canadian producer of cannabis edibles, is pleased to provide a corporate update and recap of fiscal 2023, including improved quarterly guidance, as the Company now expects record net revenue in the fourth quarter of 2023.
“2023 was an extremely busy year at Indiva and our results reflect our intense efforts. The growth of the Pearls by Grön brand, our successful launch of No Future gummies and vapes, and the resulting record net revenue for Q4 2023, is a testament to the dedication and hard work of the Indiva team,” said Niel Marotta, President and Chief Executive Officer of Indiva. “Driven by Indiva’s best-in-class distribution and store penetration, which exceeds 3,000 stores nationwide, Indiva continues to hold leading market share in the edibles category. By the end of November 2023, Pearls gummies captured the top market share by dollars and units in the edibles category in B.C and Ontario, with results in Alberta continuing to improve since Pearls launched in that market in May 2023. Additionally, Indiva has already sold more than two million No Future gummies and over 100,000 No Future vapes since the initial brand launch in B.C. and Alberta in August 2023. Further, the No Future gummies hit this sales volume in half the time it took Pearls to achieve similar volumes, despite only launching the brand in the largest provincial market, Ontario, in October 2023. The strength of the Pearls and No Future brands is expected to drive higher revenue in 2024. Finally, Indiva’s profitability in 2023 benefited from investments in automation and process improvement, which are expected to continue to drive our costs lower in 2024, further strengthening our position as the low-cost producer of edibles.”
Improved Q4 2023 Guidance
Continued strength in the Pearls by Grön and No Future brands has resulted in fourth quarter 2023 net revenue results, which are set to exceed the initial expectations and guidance provided in our third quarter results press release, dated November 21, 2023. The Company now expects aggregate Q4 2023 net revenue to improve both sequentially, and year-over-year, to a new quarterly record, exceeding $10 million in net revenue for the three-month period ended December 31, 2023.
2023 Highlights
- Expanded Indiva’s innovation team and intensified new product development efforts, which resulted in new brands and products including Indiva Blips, No Future gummies, No Future vapes, No Future Fatty Patty (launching in 2024), and a robust pipeline of innovations in development.
- Recovered revenue lost due to Health Canada’s order to halt production and sale of lozenges in Q2 2023, and have since more than replaced it with revenue from new innovations.
- Signed a five-year contract manufacturing agreement with Canopy Growth and completed a $2.1 million private placement of common shares in the capital of Indiva (the “Common Shares”) as part of a $4.25 million transaction.
- Launched No Future gummies and vapes, achieving listings in Ontario, B.C., Alberta, Manitoba and Saskatchewan, already resulting in adding more than $1 million in monthly net revenue.
- Extended the maturity on our senior debt with SNDL Inc. by 2 years to February 2026, and did so without any incremental cost, while concurrently entering into an exclusive distillate supply agreement.
- Brought Pearls to the #1 market share position in edibles (dollars and units) in Ontario, making Pearls the 4th brand in Indiva’s corporate history to lead a subcategory.
- Sold more than 2 million No Future gummies since the brand launched in July 2023.
- Regained the #1 position in national market share in the edibles category by dollars, despite losing all contributions from the Wana brand to this metric.
- Ranked 4th nationally in aggregate across all categories in monthly units sold in November 2023.
- Ramped production to record levels, lowered unit costs and improved margins with the benefit of the implementation of additional automation and process improvement, while decreasing waste and out-of-spec product as a percentage of revenue.
- Grew net revenue and expanded gross margins to a record in Q3.
- Achieved record EBITDA and positive income from operations in Q3 for the first time in corporate history.
- Achieved record net revenue for Q4 2023.
New Product Introductions for 2024
- No Future: The Company is launching four additional No Future 1.2g 510 vapes including Grape Ape Indica, Peach Punch Sativa, Tropical Island Haze and Pink Grapefruit Kush Indica, bringing total No Future vape SKUs in market to seven. Additionally, the Company is launching two new No Future gummy flavours, the Red One and the Pink One, bringing total No Future gummy SKUs in market to six. Also coming in 2024, No Future will launch an innovative chocolate covered cookie dough product called Fatty Patty.
- Pearls: The Company is launching Pearls Lemon Dream CBN 25-pack, which follows on the success of Marionberry CBG 25-pack and Peach Mango CBD 25-pack.
- Indiva Blips: Since the Ontario launch of Indiva Blips 25-pack in the second half of 2023, this product has gone on to consistently rank in the top ten of all Ontario capsule SKUs based on dollar sales. Blips have effectively reduced the cost of consuming 10mg of THC for medically focused consumers, and in 2024 Indiva is planning on launching a 55-pack size to bring down that cost even further.
Equity Incentive Grants
The Company’s board of directors (the “Board”) has approved the grant of an aggregate of 3,645,836 restricted share units (the “RSUs”) and 3,624,778 options (the “Options”) to certain directors, officers, employees and consultants of the Company pursuant to its amended and restated omnibus incentive plan (the “Plan”). The RSUs have a vesting period of one year. Subject to the Plan and applicable policies of the TSX Venture Exchange (the “TSXV”), each vested RSU entitles the holder thereof to receive, on settlement, a cash payment equal to the closing price of the Common Shares on the last trading date prior to settlement, or at the discretion of the Board, one Common Share, or a combination of cash and Common Shares. 3,524,778 Options vest over a period of three years, at a rate of one third of the total vesting each year on the anniversary of the grant, while 100,000 Options vest over a period of one year, at a rate of one quarter of the total vesting every three months from the date of grant. Each Option is exercisable into one Common Share at a price of $0.095 per Common Share and expires five years from the date of grant.
The maximum number of Common Shares reserved for issue pursuant to the Plan pursuant to the exercise of Options granted under the Plan is equal to 10% of the number of Common Shares outstanding and the maximum number of Common Shares reserved for issuance, in the aggregate, pursuant to the settlement of RSUs granted under the Plan is 12,000,000. Upon completion of the grants referred to herein and certain other grants to employees of the Company, there will be 3,645,836 RSUs and 11,853,112 Options granted under the Plan, representing 8.3% of the outstanding Common Shares as of the date hereof.
About Indiva
Indiva is proud to be Canada’s #1 producer of cannabis edibles. We set the gold standard for quality and innovation with our award-winning products, across a wide range of brands including Pearls by Grön, Bhang Chocolate, Indiva Doppio Sandwich Cookies, Indiva 1432 Chocolate, and No Future Gummies and Vapes, as well as other Indiva branded extracts. Indiva manufactures its top-quality products in its state-of-the-art facility in London, Ontario, and has a corporate workforce remotely distributed across Canada. Click here to connect with Indiva on LinkedIn, Instagram, and here to find more information on the Company and its products.
