Should you Invest in VIVO Cannabis? Stock Up 35% in 2019
Napanee, Ontario-based VIVO Cannabis Inc. (OTCQX: VVCIF, TSX-V: VIVO) a cannabis producer serving Canada’s medical and adult-use markets, announced its wholly-owned subsidiary, ABcann Medicinals Inc., was approved to begin cultivation in the expansion of its Vanluven Road facility in Napanee. The expansion will begin cultivating immediately, doubling its Ontario cultivation capacity.
VIVO’s stock trades at $0.75, up 35% in 3 months. It had revenue of $2.3 million in Q3 2018—up 217% from Q2—reflecting an annual revenue pace of about $10 million per year.
VIVO’s price to sales ratio is 31, a high stock valuation compared to other industries, but not unusual in the cannabis industry. It means investors are pricing it for significantly higher revenue in the future.
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It currently has 290 million shares outstanding, also on the high side for the industry, but far below some major players such as Aurora Cannabis.
The facility expansion comprises production and product development space, including a CO2 extraction suite to produce concentrates that should be online in mid 2019.
VIVO’s current production capacity is 5,000 kilograms per year and will increase to 11,000 kgs later in 2019 after completion of fully-funded expansions in Hope, BC and Napanee, Ontario. They will also buy and re-sell several thousand kilograms from third-party cultivators to augment sales.
Producing 11,000 kgs could generate $55 million in revenue at $5 per gram, a modest price.
“Through our expansion projects…we are positioned to increase our offering…including launching edibles, concentrates and precisely-dosed medical products…” said Barry Fishman, CEO of VIVO. He added, “The GMP certification of our Vanluven expansion, expected later this year, will enable us to service the growing international medical cannabis market…”
VIVO is expanding its production capacity and pursuing partnership and product development opportunities domestically, as well as in select international markets, including Germany and Australia.
VIVO holds production and sales licenses and operates indoor cultivation facilities with proprietary plant-growing technology. It has premium brands targeting different customer segments, including Beacon Medical™, FIRESIDE™, Canna Farms™ and Lumina™.
In August 2018, VIVO acquired Canna Farms, a cannabis company based in Hope, BC. Canna Farms was BC’s first Licensed Producer and has several years of craft cultivation experience and expertise, as well as a significant patient base and positive cash flow.
VIVO also operates Harvest Medicine, a scalable network of medical cannabis clinics with a free telemedicine app.
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Source VIVO press release
Should you Invest in VIVO Cannabis? Stock Up 35% in 2019
