EDMONTON, AB – Nova Cannabis Inc. (TSX: NOVC) released its audited annual consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2021.
“We launched Value Buds in 2021 to provide cannabis consumers in Canada with a better option, and the traction of our store format has been a resounding success. Once again, we delivered strong sequential and year over year sales growth for the quarter and we now have 78 stores open across Alberta, Saskatchewan and Ontario,” said Darren Karasiuk, CEO of Nova. “Following Sundial’s pending acquisition of our majority shareholder, Alcanna, we will gain a cannabis focused partner that is committed to supporting our value-based model with the infrastructure and financial resources to drive the expansion of our disruptive strategy at a much larger scale.”
FOURTH QUARTER 2021 FINANCIAL AND OPERATING HIGHLIGHTS
- Sales of $47.6 million, a 175.9% increase from the fourth quarter of 2020, and a 23.2% increase from the third quarter of 2021
- Gross profit of $8.4 million, or 17.7% of sales, a 58.0% increase from the fourth quarter of 2020 and a 29.0% increase from the third quarter of 2021
- Nova now has seventy-eight (78) stores open, an increase of forty-four (44) stores since December 31, 2020, and all legacy Nova branded stores have been converted to Value Buds
FISCAL YEAR 2021 FINANCIAL HIGHLIGHTS
- Sales of $134.4 million, a 112.2% increase from $63.3 million in 2020
- Gross profit of $24.9 million, or 18.5% of sales, a 19.7% increase from $20.8 million in 2020
- Cash increased by $9.3 million to $10.5 million as at December 31, 2021
SUNDIAL ACQUISITION OF ALCANNA
On October 7, 2021, Sundial Growers Inc. (“Sundial“) (NASDAQ: SNDL) entered into an arrangement agreement (the “Arrangement Agreement“) to acquire all of the issued and outstanding common shares of Alcanna Inc. (“Alcanna“), Nova’s majority shareholder (the “Sundial-Alcanna Transaction“). On February 25, 2022, Alcanna and Sundial mutually agreed to extend the outside date for closing the Sundial-Alcanna Transaction to March 30, 2022 in accordance with terms of the Arrangement Agreement to complete the required closing matters contemplated by the Arrangement Agreement.
FOURTH QUARTER AND YEAR END 2021 FINANCIAL RESULTS
For further information, refer to the Company’s annual financial statements and MD&A for the year ended December 31, 2021, which are available from the Company’s profile on SEDAR, at www.sedar.com, or on the Company’s website at www.novacannabis.ca.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements or information (collectively “forward-looking statements“) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “continue”, “anticipate”, “will”, “should”, “plan”, “intention”, and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to: the Company’s expectations regarding the impact the closing of the Sundial-Alcanna Transaction will have on Nova’s growth and business strategies.
With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the Company’s ability to identify locations for, construct and open new stores and the costs related thereto; the availability of hardware and equipment for those stores; government regulation and applicable laws will not change in a manner adverse to the Company; receipt of necessary regulatory approvals to open new stores; the Company’s ability to obtain leases for new sites and attract the necessary personnel to operate new stores; demand for the products the Company sells; other factors that will drive sales growth in the Value Buds banner; availability of acquisition opportunities; sustainability of competitors’ businesses and competition in the retail cannabis industry, including from the illicit cannabis market; consumer demands; and factors that influence consumer behavior.
Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, especially given the unprecedented uncertainty of the full extent and impact of COVID-19, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, the duration and severity of the COVID-19 pandemic on the business, operations and financial condition of the Company; the risk that Nova will be unable to execute its strategic plan and growth strategy, as planned without significant adverse impacts from various factors beyond its control; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the retail cannabis industry; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in Canada (including Alberta and Ontario), and globally; industry conditions, including changes in government regulations; fluctuations in foreign exchange or interest rates; unanticipated operating events; failure to obtain regulatory and third‐party consents and approvals when required; changes in tax and other laws that affect us and our shareholders; the potential failure of counterparties to honour their contractual obligations; stock market volatility; and the other factors described in the Company’s public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Nova does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
(This information is primarily sourced from Nova Cannabis Inc. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).