Indiva Limited, the Canadian producer of cannabis edibles and other cannabis products, is pleased to announce that it expects record net revenue in fiscal Q4 2020 in the range of $6.9 to $7.2 million. This represents greater than 2,000% year-over-year and 128% sequential quarterly net revenue growth at the low end of the revenue guidance range, when compared with net revenue previously reported of $0.32 million and $3.03 million in fiscal Q4 2019 and fiscal Q3 2020 respectively.
The acceleration in net revenue in fiscal Q4 2020 was driven primarily by the growth in sales from Wana™ Sour Gummies. New SKUs and wider distribution increased unit sales of Wana gummies in the quarter to greater than 1.2 million units versus approximately 328,000 in Q3 2020, where Wana was also only in the market for the last month of Q3 2020. Distribution of Wana™ Sour Gummies expanded to six provinces and one territory in the fourth quarter. Additionally, Indiva signed a distribution agreement with Medical Cannabis by Shoppers™ in Q4 2020, which will soon see Bhang® Chocolate and Wana™ Sour Gummies listed on its online platform.
Indiva further increased its leading market share in the edibles category in the fourth quarter. As previously announced on January 7th, 2021, Indiva is the national leader in edibles, with market share exceeding 40% in the category for the month of December 2020, according to Hifyre data.
Adjusted gross margins in fiscal Q4 2020 are expected to be above fiscal Q3 2020 levels of 22%, due to improved efficiencies, higher fixed cost leverage and lower distillate costs, offset by a mix shift in the quarter to higher cannabinoid SKUs.
Indiva expects continued year-over-year and sequential net revenue growth to continue in fiscal Q1 2021, based on continued market and category growth, strong consumer acceptance of Indiva products, and the expected introduction of new products and SKUs, including quick-onset gummies. The Company also expects significant gross margin improvement in Q1 2021, due to significantly lower distillate costs. The Company anticipates continued improvement in Adjusted Gross Margins.
“The sharp sequential improvement in quarterly revenue and continued gross margin expansion reflects the hard work and dedication of the Indiva team, as well as the strength of our partnerships and quality of our products,” said Niel Marotta, President and CEO of Indiva. “We are excited to bring further award-winning and innovative products to market in 2021. Of-age Canadians can rely on Indiva’s continued dedication to quality and innovation.”
The Company has granted 300,000 incentive stock options (the “Options”) to certain consultants and advisors. The Options have an exercise price of $0.40 per share and will be valid until January 12, 2024. The Company’s Stock Option Plan allows for issuances of up to 10% of issued and outstanding share capital in the form of incentive stock options. As a result of the grant, the company has a total of 8,458,333 stock options issued, representing approximately 7.7% of the issued and outstanding share capital.
Indiva is also pleased to announce that it has entered into agreements with Simone Capital Ltd. (“Simone”), located in Ontario and principally owned and operated by Anthony Simone, and Lock Consulting Corp. (“Lock”), located in British Columbia and principally owned and operated by Neil Lock, to provide Indiva marketing services to advisors, brokers and institutional investors in North America. Under the terms of the agreements, Indiva will pay Simone a monthly retainer of approximately CAD$5,000 and it has been granted 100,000 options. The initial term of the agreement is three months, with an automatic extension for three additional three month terms. An additional 100,000 options have been issued to Lock (all options are included in the above total). The agreement expires on December 31, 2021. Each of Simone and Lock hold less than 1% of the Company’s issued and outstanding common shares. Other than the retainer payable under the agreements, the Company does not anticipate any costs related to the engagement of Simone and Lock.
Indiva sets the standard for quality and innovation in cannabis. As a Canadian licensed producer, Indiva creates premium pre-rolls, flower, capsules, and edible products and provides production and manufacturing services to peer entities. In Canada, Indiva produces and distributes the award-winning Bhang® Chocolate, Wana™ Sour Gummies, Ruby® Cannabis Sugar, Sapphire™ Cannabis Salt, Artisan Batch, and other Powered by INDIVA™ products through license agreements and partnerships. Click here to connect with Indiva on LinkedIn, Instagram, Twitter and Facebook, and here to find more information on the Company and its products.