COVID-19The weed wireLA’s NUGS sells $400K worth of cannabis in 1 day

Company credits current success to aggressive expansion during Covid-19
Michelle Gamage Michelle GamageJune 25, 20205 min

June has been a banging sales month for Cannabis Strategic Ventures (OTCQB: NUGS).

The Californian producer sold US$400,000 worth of weed June 4, its largest day in sales ever.

June is now on track to beat out the company’s previous record-setting month of May, where it sold US$929,000 — up 7 per cent from April’s sales.

So far in June the company has sold US$900,000, NUGS said in a statement.

For comparison, net revenue for Canopy Growth Corp. (TSX: WEED), the world’s largest cannabis company, was around US$26.4 million for each month in Q1.

Read more: Canopy Growth shares sink after reporting another billion-dollar loss

CEO Simon Yu credits the company’s success to the strategic decision to aggressively expand as the Covid-19 pandemic set in, rather than to slash spending.

“The cannabis shortage we have seen in California since that time has afforded us a golden opportunity to sharply expand our distribution footprint and nurture a widening network of key distributor relationships,” Yu said. “June is on pace to be our third consecutive record sales month. Given our strong positioning and expanding production capacity, we anticipate continued robust growth ahead.”

Part of that robust growth could be a new greenhouse.

NUGS released a letter of intent June 17 to acquire a 300,000 square foot cannabis greenhouse to more than double the company’s production capacity. In a press release Yu said this acquisition is anticipated to grow total sales by more than 100 per cent and position NUGS to develop partnerships with major distributors.

The current demand for cannabis in California guarantees people will buy as much weed as the company can produce, which means it’s a good time to expand, Yu said.

“We have seen recent strong improvements in output, pricing and sales volume, and we are aggressively interested in expanding capacity to capitalize on micro and macro factors to drive more value for our shareholders,” he said.

The Los Angeles-based company says it’s one of the largest publicly traded cannabis cultivators in the U.S., without considering its potential new greenhouse.

“We are scaling up in healthy response to signals from the market telling us loud and clear that we are on the right track,” Yu said. “We anticipate all these trends will continue to characterize our operational performance during the second half of the year.”

Top image of the Los Angeles skyline by BrianLiao via Wikimedia Commons

 

michelle@mugglehead.com

@missmishelle

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