Harvest One Cannabis Inc (CVE:HVT) (OTCMKTS:HRVOF) announced that revenue for the last six months of 2019 increased slightly year-over-year.
The company brought in $5.8 million in revenue as of December 31, compared to $5.4 million in 2018.
Harvest One said its cultivation division was negatively affected by some setbacks such as reduced provincial orders. But the company noted that “our consumer division continued to show steady results with 11% revenue growth over the previous quarter.”
READ: Harvest One to raise C$2.3M by selling interest in British Columbia cannabis retailer and a property stake
The company also provided an update on its strategic plan to refocus its core strengths of product development, brands and distribution, while also committing to significant cost reductions and a targeted approach to capital investment.
"In light of industry challenges, Harvest One realigned its strategy to focus on our core strengths of brands and distribution and undertook significant cost-cutting initiatives to rightsize the organization. We anticipate a strong rollout of our Cannabis 2.0 products, specifically our LivRelief cannabinoid-infused topical creams, which are in strong demand from retailers" said CEO Grant Froese in a statement Monday.
Froese continued: "We remain focused on solidifying our balance sheet with additional sales of non-core assets and continuing to evaluate various financing alternatives. We are confident that we are taking all the necessary steps to reduce costs and move the company towards profitability."
Since November 2019, the company has undertaken a number of initiatives that are expected to contribute to a 30% reduction in selling, general and administrative (SG&A) expenses on an annualized basis.
These initiatives include:
- an overall reduction in the workforce by over 20%;
- a comprehensive salary reduction program at the senior management level;
- the downsizing and consolidation of corporate offices; and
- the implementation of remote workforce programs.
These cost reduction efforts have already positively impacted cash SG&A expenses in the second quarter of 2020. The company expects cash SG&A expenses to continue to decrease throughout the remainder of the 2020 fiscal year.
Harvest One noted that sales volumes to date in Q3 2020 have improved significantly from Q2 2020, most notably at United Greeneries.
Both dried and bulk flower sales have increased significantly and Cannabis 2.0 sales are expected to be reflected in the company's Q3 2020 results as a result of strong demand from both its retail and provincial cannabis store partners. Revenues from its consumer and medical divisions are also expected to show steady quarter-over-quarter growth.
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