The Los Angeles-based company has secured a manufacturing and distribution location in Santa Rosa, California and received regulatory approvals from the state government. Ventura added that its THC vaping product will be available for sale in the state as early as June.
CEO Chris Heath said he was “pleased” that Ventura accomplished its goal of becoming a vertically integrated California cannabis product company and is now assessing the trade-off between revenue growth and cash burn.
“As most of our shareholders and market participants know, because of US federal tax laws, namely 280(e), it is nearly impossible to generate cash flow from a cannabis operation,” Heath told investors in a statement.
“Therefore, the funding that drives any serious revenue growth in any cannabis company continues to be from capital markets rather than internally generated cash flow or debt. As we are no different, we will focus on operating our business primarily with an eye to minimize losses and preserve cash until the capital markets re-open to our industry where we can refocus on growth."
Ventura is debt-free and has a healthy balance sheet to sustain it in the meantime, according to Heath. It has nearly finished divesting its addiction business, with most assets having been sold, collected or liquidated.
Ventura said it believes the total amount of proceeds from the sale of the addiction business will be “positive.”
“We will be far better off financially having disposed of the addiction business units, rather than if we kept them, given the current economic conditions,” Heath said.
The cannabis company's strategy is to focus solely on the massive California market, where it plans to establish a network of dispensaries with owner-operators.
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