BevCanna Enterprises Inc (CSE:BEV) (OTCMKTS:BVNNF) said the rationale behind its acquisition of e-commerce group Pure Therapy Products Corp, announced in September this year, was paying off, and the group has recognised the first revenue since its inception.
Pure Therapy, now a wholly-owned subsidiary of the company, reported C$1.53 million in unaudited gross revenue for the first nine months of 2020 and a net profit of C$104,000.
"Our goal with the Pure Therapy acquisition was to stimulate strong revenue growth and accelerate our Q4 sales by adding new products, investing in customer acquisition and retention programs and leveraging the platform's current mix of subscription-based and traditional sales revenue models to build a strong recurring revenue stream," John Campbell, the chief strategic officer for BevCanna said in a statement.
"We're very pleased with the progress that we've made over our first month of ownership and we are on track for a very strong Q4 and 2021," he added.
Capital constraints under Pure Therapy's previous ownership resulted in an interim revenue shortfall in early 2020 but BevCanna said its strategic investments and improvements have positioned the platform to be on track to deliver strong revenue in the fourth quarter, with a forecasted annualized run rate of C$6 million
Pure Therapy is a direct-to-consumer e-commerce company selling various natural health products and has also gained over 3,000 new customers over the same period, providing BevCanna with a growing revenue stream.
The deal also gives the firm a platform to expand and launch its own proprietary hemp-based products directly into the global market, including the burgeoning US CBD market, it noted.
Pure Therapy already boasts around 23,000 customers that it has acquired since 2017 and the brand achieved unaudited calendar year 2019 gross revenues of C$4.78 million. BevCanna is forecasting gross revenue of C$7.28 million for the brand in 2021.
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