MMJ Group Holdings Ltd (ASX:MMJ) (OTCMKTS:MMJJF) (FRA:2P9) investee WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) (FRA:4WE) predicts 2021 will be a “banner year” for the business as it focuses on increasing revenue maximising production efficiencies.
WeedMD is based in Ontario, Canada, and is a producer and distributor of cannabis products for both the medical and adult-use markets.
In a letter to shareholders, WeedMD chairman and interim CEO George Scorsis – former CEO Angelo Tsebelis has moved into an advisory role – outlined the company’s steps towards profitability in 2021.
“With the infrastructure improvements and ramp-up of our cultivation, we are now producing and shipping more product than we ever have before at a lower cost to produce, while maintaining the quality for which WeedMD is known,” he said.
“This year we will continue to make operational improvements in the best interests of our shareholders with a focus on increasing revenue, while maximising margins and taking the necessary steps needed through optimisation measures to get us closer to profitability,” Scorsis said.
“We are taking steps to ensure our state-of-the-art, fully-licensed cultivation and production sites in Strathroy and Aylmer, Ontario, are fully utilised and operations are efficiently centralised.”
One of those steps was to close the company’s Bowmanville facility, which previously was used for medical packaging, labelling and distribution activities, instead centralising all activity at the Strathroy and Aylmer sites.
Scrosis said WeedMD was a stronger company heading into 2021, following the merger of its medicinal cannabis arm, Starseed Medicinal, under the WeedMD branding.
The COVID-19 pandemic saw the Canadian cannabis market fall under economic pressure, impacting equity valuations, but in spite of the downturn WeedMD made several impressive fiscal gains.
Net revenue for the fiscal third quarter rose 59 per cent year-on-year – and 8 per cent growth quarter-on-quarter – and the first nine months of 2020 saw a two-fold sales increase on the corresponding period in 2019.
“We are starting 2021 with increased brand recognition and retail engagement across Canada for our premium adult-use brand, Color Cannabis,” Scorsis said.
“Recently, our Color Cannabis cultivar, Pedro’s Sweet Sativa, was awarded Top Sativa Flower in Canada at the inaugural awards for KIND Magazine, Canada’s pre-eminent premium cannabis lifestyle magazine.
“In fact, within its first week of availability, our Color vapes landed in the ‘Top 5’ status when compared to over 30 available vape brands according to Ontario Cannabis Store data.”
WeedMD also entered a range of commercial agreements and strategic partnerships in late 2020, which can be read about here.
- Daniel Paproth