Abacus Health Products Inc (CSE:ABCS) (OTCMKTS:ABAHF) posted third-quarter results Thursday that saw revenue leap 97.4% year-on-year, driven by the company’s strong position within the topical CBD medications market.
For the third quarter ended September 30, the Toronto-based company reported revenue which jumped 97.4% to $4.1 million, compared to the same period a year earlier.
Abacus offers two product lines which include CBD CLINIC, sold exclusively to healthcare practitioners, and CBDMEDIC, sold over-the-counter to customers.
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The company said CBD CLINIC revenue jumped 42.7% to $2.9 million in the third quarter from $2 million in the same period a year earlier. The total number of health care practitioners in the CBD CLINIC network grew from 12,000 to 14,500.
Meanwhile, CBDMEDIC revenue shot up 71.9% to $1.2 million in the third quarter from the previous quarter. In a sign of traction, purchase orders poured in from over 7,000 retail locations, more than double the 3,000 locations it had in the previous quarter.
The company said CBDMEDIC will now be carried by the three largest US national retail pharmacy chains, representing nearly 22,000 locations across America.
Growing pharmacy presence fuels profits
Thanks to its growing pharmacy presence, gross profit soared 100% year-on-year to $2.4 million in the third quarter, compared to the same period in 2018. Gross margin also improved year-on-year to 60.1% from 59.3%, said the company.
Abacus Health disclosed it received a purchase order from a major national pharmacy chain in the US, which will be offering its CBDMEDIC product line. Under this new supply agreement, the products will be available across 2,400 retail stores.
“Abacus recently achieved a major milestone in securing the second and third largest national retail pharmacy chains for the distribution of CBDMEDIC products. This milestone marks the beginning of an inflection point and the accelerated adoption of our products by the food, drug and mass channel,” said Abacus Health Products CEO Perry Antelman in a statement.
“Our investment in brand awareness, including our partnerships with Rob Gronkowski, Gillette Stadium and Patriot Place have provided a powerful platform to further develop the CBDMEDIC brand and launch a new nutrition and wellness brand, which will mark our entry into the larger market of ingestible CBD products in the first half of 2020,” he added.
With accelerating consumer adoption of CBD products, Abacus Health expects strong growth in 2020 for both its CBDMEDIC and CBD CLINIC brands.
“Based on existing and anticipated purchase orders we expect fourth-quarter revenue to result in quarterly sequential growth of 20-25%, and in particular driven by CBDMEDIC,” said Antelman.
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