Novus Acquisition and Development, Corp. (OTC Markets: NDEV), through its wholly owned subsidiary WCIG Insurance Services, Inc., is a diversified insurance entity in health, liability, annuity and accident, and, the nation’s first carrier/aggregator offering a cannabis health plan, today reported financial and operational results for its third quarter ended September 30, 2018.
Third Quarter 2018 Highlights:
- 9 consecutive quarters of revenue growth
- Quarterly Gross Revenue increased 27% to $46,395 for the three months ended September 30, 2018, as compared to the three months ended September 30, 2017 which was $34,204
- Total Gross Revenue increased 30% to $130,816 for the nine months ended September 30, 2018, as compared to the nine months ended September 30, 2017 which was $92,522
- Demonstrated 58.5% profit margin pricing structure in its business model for the third quarter of 2018
- Quarterly Net Income increased 21.1% to $27,161 for the three months ended September 30, 2018, as compared to the three months ended September 30, 2017 which was $21,689
- No dilution as total shares outstanding remained unchanged at 98,233,624 at September 30, 2018
- Shareholder equity increased slightly at $1,416,395 as of September 30, 2018 from $1,415,968
- Cash Balance of $111,184 as of September 30, 2018 which was increase of 2% since last quarter
Management Discussion and Analysis
Novus and Cannabis Industry Outlook
Exit of Jeff Sessions
Since the exit of U.S. Attorney General Jeff Sessions, the victory for cannabis in the Mid-Term Elections, cannabis stocks have risen to new highs by more than 9%. Sessions was obstinate and his determination to put a federal ban on monetary transactions and depository processors. Even though there has been ease on transactional payments the issue remains on banks being disinclined to provide deposits made from cannabis transactions. With Sessions’ departure, it is more likely that banks might initiate a positive but cautious pace towards a depository relationship with business that utilize cannabis in their business model. As for the Trump Administration they have voiced an optimistic attitude toward the federal legalization of cannabis. If the new Attorney General of the Justice Department trails the president’s example, federal legalization may very well be a reality before the next 2020 election.
Midterm Elections and Other Notable Cannabis Victories
The first week of November 2018 has shown an unprecedented week for the cannabis industry. Voters came out in record number to champion the cannabis effort and courts as well as the judiciary system:
1. Democrats Take The House: Considered as an optimistic inclination since this party has voiced its willingness to reforming federal cannabis laws.
2. New Mexico: Santa Fe judge ruled in favor of Nicole Sena, to provide medical cannabis to her epileptic infant daughter.
3. Michigan: Proposition 1 was approved by Michigan voters for recreational cannabis sales. Novus has a presence in this state.
4. Utah: The passage of Proposition 2 makes Utah the thirty-second state to legalize medical cannabis thanks to the Utah Patients Coalition. Novus has initiated filing to conduct business in Utah.
5. Missouri: Missourian voters charting a medical marijuana plan governed by the Missouri Department of Health approved Amendment 2. Novus has initiated filing to conduct business in Missouri.
6. Massachusetts: The state will begin recreational sales, with the clearance of two licensed cannabis-testing laboratories. Novus has a presence in this state.
7. Iowa: Dispensaries will commence their dispensaries to conduct business with medical CBD. Novus has initiated filing to conduct business in Iowa.
Novus’ Chief Executive Officer, Frank Labrozzi, commented, “What does this do for Novus? Having a new head of the U.S. Justice Department and Democratic House of Representatives will initiate passing bipartisan legislation to allow national banks to take deposits on legal cannabis transactions, offering auto draft and credit/debit card transactions streamlining the effort to procure new patient/members as opposed to taking in cash/check deposits. We believe these recent political changes place the U.S. on the path of federally legalizing cannabis, after which, Novus will benefit and increase its shareholder value.”
During the third quarter of 2018, continued to sign up to their Provider Network additional legal medical cannabis dispensaries. Cannabis dispensaries are experiencing the ever-increasing competitiveness as the cannabis retail market expands. As Novus continues to build bridges for those dispensaries that once turned down to participate in our Provider Network, these same entities are now seeing Novus’ value by driving a customer base to their storefronts with higher than average monthly med purchases and gratuitous local advertising effort.
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