INDVR Brands Inc (CSE:IDVR) (OTCMKTS:CAAOF) (FRA:3YX) said Thursday that its definitive acquisition target Cannabis Corp saw healthy increases in both its retail and cultivation revenue during its third quarter.
Retail revenue increased 25% year-over-year to US$1.5 million and cultivation revenue came in at US$672,000, a 42% increase over last year’s levels – both record sales, according to INDVR.
Colorado-based INDVR announced in June, its plans to merge with Cannabis Corp, its licensed partner in Colorado. The deal is expected to close in the first quarter of 2021.
INDVR, which is focused on creating and distributing cannabis brands to sell in the US, owns the Joint retail store in Colorado, which is operated by Cannabis Corp. Sales at the Joint grew steadily throughout the year, and store-level gross margins for the quarter to end September 30 was 54%, compared to 45% in the same year-ago quarter.
INDVR said it expects revenues and gross margins to grow, thanks to new delivery services on offer and as corona virus-related restrictions begin to ease.
Update on Honu acquisition
Separately, INDVR gave shareholders an update on its Honu brand, which it acquired in 2019. Honu is produced and sold in Washington and Oregon, where INDVR uses licensed partners to manufacture and distribute the products and collects a fee amounting to around 12% of revenue. The company said it has continued to see increased sales in the two states, with its third-quarter revenue coming in just under US$988,000, a 29% increase from the same quarter a year ago.
INDVR currently derives its revenues from owning and leasing all the equipment, facilities and brands to Cannabis Corp as well as revenues generated from the Honu brand sales in Washington and Oregon, it said in a statement. Once the acquisition of Cannabis Corp closes, INDVR will also see the revenues and profits from operating the grow facilities and the retail operations.
“With the legalization of cannabis in many states following the election in the USA, the company continues to explore opportunities to increase awareness in and introduction of the Honu brand into current and new markets, as well as new opportunities to find partners to further enhance operations,” INDVR told shareholders in a statement.
The firm added it is also exploring new options for delivery.
Contact Angela at firstname.lastname@example.org
Follow her on Twitter @AHarmantas