FinCanna’s QVI Looks to Become California’s Premier Contract Manufacturer
June 13th, 2019
App, Exclusive, Top News
California’s cannabis industry is projected to reach $7.7 billion in revenue by 2021, according to *BDS Analytics and Arcview Group, driven by the legalization of adult-use cannabis. Within this market, manufactured products, edibles, and concentrates have outpaced cannabis flower to become the *fastest growing segment of the market. Concentrates can be incorporated into many different value added product formats, including but not limited to vaporizers, topicals, tinctures, edibles and beverages.
One of the effects on the industry is that many cultivators and brands don’t have the expertise or facilities to create their own value added products. As companies look to expand their offerings to meet growing consumer demand they find themselves needing to outsource their manufacturing to meet their product requirements .
FinCanna Capital Corp. (CSE: CALI) (OTCQB: FNNZF) a royalty company focused on the burgeoning U.S. licensed cannabis industry, plans to take advantage of this rapidly emerging trend through its royalty investment in, QVI, Inc.. QVI is a cannabis infused product manufacturer located in Sonoma County, California that conducts its business under the brand “The Galley”.
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State of the Art Facility
QVI is building a state-of-the-art, production facility that’s capable of producing edibles, topicals, tinctures, chocolates, hard candies, gummies, beverages and more, on a contract basis for licensed cannabis cultivators and brands. The Galley will be differentiated from its peers by its automated capabilities to produce virtually all high-value cannabis products under one roof. This one-stop production capability is attractive to top tier in-state and out-of-state brands and positions QVI as a go-to producer for many cultivators and brands looking to capitalize on the rising demand for value added products.
The company is nearing completion of its of its Santa Rosa, CA, based, 8,300 sq. ft. commercial manufacturing facility and looks to be in production shortly subject to final licensing and permitting.
“We are very pleased with QVI’s ability to continue to move its business forward in strategically located Sonoma County,” said Andriyko Herchak, CEO of FinCanna Capital. “The demand for their manufacturing and over all fulfillment services is exceptionally strong and bodes well for their future success. FinCanna shareholders, along with QVI co-founders, look forward to The Galley’s successful transition to commercial operations in the near future.”
Significant Royalty Potential
QVI has already vetted more than 100 potential cannabis operators that require contract manufacturing services for a wide range of products. Based on existing MOUs, the company expects to generate upwards of $5 million in revenue during its first 12 months once operational. The company anticipates that these revenues will increase as operations and marketing efforts commence leveraging the co-founders’ extensive industry network.
In addition to producing third-party products, the company plans to manufacture its own line of products under the name “Big Fish Brands”. These products could offer the potential to generate higher profit margins than contract manufacturing. QVI is also submitting for a distribution license to help brand customers package and fulfill their products.
FinCanna will receive a tiered corporate royalty, adjusted based on revenue levels, ranging from 15% to 6% of QCI’s total revenue, with a top royalty rate of 15% on the first $20 million in annual sales until cumulative royalties reach $10 million. This revenue could have a significant impact on the company’s top-and bottom-line over the coming quarters as the facility is built out and goes into production.
FinCanna Capital Corp. (CSE: CALI) (OTCQB: FNNZF) is well positioned to capitalize on rising demand for edibles, topicals, tinctures and other products in California’s nascent cannabis industry. In addition to QVI, the company holds stakes in other U.S. based cannabis companies to learn more click Here to view the Fundamental Research Report
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