Avicanna Launches into Adult-use Cannabis; Revenue Growth to be 5-10x Greater

Toronto-based biopharmaceutical cannabis company Avicanna announced that its advanced cannabinoid formulations will be available through retail channels in Canada for the first time in its history early next year, and its shares will rise to 30% on Wednesday.
Expand to retail sales to give consumers easy access to the same industry-leading formulation of medicinal cannabis products. It has been shown that many consumers looking for cannabis for medicinal purposes do not go through medical channels. Almost 44% buy from legal (adult) stores.
“Given the increasing exposure of consumers and especially the low barriers to entry (i.e. no registration of medical cannabis / 'prescriptions' required), we expect Avicanna (AVCN) revenues to increase significantly from Q1 21 and the first sales to distributors in the provinces begin January 2021, ”said Rahul Sarugaser and Michael W. Freeman, equity analysts at Raymond James.
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“Given the strong adoption of Avicanna (AVCN) by doctors and, interestingly, by older medical cannabis patients (47% of shoppers aged 51 to 75 and 55% women), the medical cannabis market has grown in size relative to consumption exacerbated in adults due to the much larger (and rapidly growing) adult use market, we expect the potential revenue from sales from adult use to be 5 to 10 times higher than revenue from medical sales Cannabis by AVCN via buyers. "
According to the 2020 Canadian Cannabis Survey, 76% of medical cannabis users do not have a medical document - such as a prescription - from a healthcare professional.
The easy access to store fronts and the systemic barriers to connecting with a healthcare professional who may be presenting a medical document have impacted the number of medical users year after year, which has been largely the same since then, with around 350,000 active registered medical users in Canada since then stayed in 2018.
"The existing stigma surrounding medical cannabis and the barriers to obtaining a medical record make it particularly difficult for some patients to access medical cannabis through the appropriate channels with the assistance of a doctor," said Aras Azadian, chief executive officer of Avicanna.
“We believe that by expanding the RHO Phyto portfolio to include retail distribution channels, we will give consumers easier and more accessible access to standardized medical products they are looking for. For a biopharmaceutical company like Avicanna, expanding our medical devices to retail channels is in many ways similar to accessing over-the-counter medical devices. "
According to Tipranks, analysts who offered Avicanna 12-month price targets over the past three months are forecasting an average price of $ 2.49 with a high of $ 2.50 and a low of $ 2.50. The average target price corresponds to an increase of 164.93% compared to the last price of 0.94 CAD.
The stocks of the biopharmaceutical cannabis company closed 17.02% higher at CAD 1.1 after rising 30% to CAD 1.21 on Wednesday. However, the stock has fallen over 50% so far this year.
Avicanna's (AVCN) entry into the Canadian adult cannabis market at a rate of $ 3.2 billion comes following the successful launch of its RHO Phyto products through shoppers, where the company is growing sales in all product categories > 100% from the previous month, "added Sarugaser and Freeman.
“According to our channel checks, AVCN brands have been the best-selling products for shoppers in the past few months. AVCN remains committed to its medical cannabis patients and will maintain its exclusive, preferential supply relationship with Shoppers Drug Mart, which is slowly but surely building a powerful nationwide medical cannabis platform. "
This article was originally published on FX Empire
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