Vancouver, British Columbia–(Newsfile Corp. – August 10, 2022) – FinCanna Capital Corp. (CSE: CALI) (OTCQB: FNNZF) (“FinCanna“) (“the Company”), an investment company focused on the U.S. licensed cannabis industry, regrets to announce that its portfolio company, QVI Inc., a cannabis-infused product manufacturer located in Sonoma County, California, doing business as “West County Brands” intends to suspend operations indefinitely.
Earlier this year, QVI initiated its “manufacturer to retail” revenue model featuring its own branded line of cannabis infused, edible products. This new model was intended to be the foundation of a profitable business based on West County Brands’ streamlined manufacturing capabilities to produce its own branded products in higher volumes and with superior margins. Notwithstanding all of the efforts and substantial capital invested to produce high quality, attractively packaged and very competitively priced branded products, and months of concerted sales effort, QVI was unable to generate the critical threshold of revenue required to operate their business profitably. As a result and after due consideration, FinCanna will no longer continue to fund QVI and is in discussions with its secured debenture holders about a go-forward plan.
Despite being the largest single cannabis market in the world, conditions in California have proven to be too challenging. Currently, cannabis businesses in the State are facing overproduction, falling wholesale prices, retail sales contraction, and stiff competition at the brand and dispensary levels as well as competition from a very robust black market. The combination of these tough market conditions has greatly impacted QVI’s ability to build a sustainable business with no clear prospect of being able to overcome these entrenched problems.
Andriyko Herchak, CEO of FinCanna Capital, said, “When launched earlier this year, we believed QVI’s new manufacturer to retail revenue model would be the foundation on which a sustainable and thriving enterprise could be built. We are disappointed to announce that even with substantial capital investment from FinCanna, including significant amounts that FinCanna’s executives have personally invested, and continued efforts from the QVI and FinCanna teams, the business has been unable to generate enough sales revenue to fund its ongoing operations. The cannabis market in California has been extremely challenging. With no clear path to financial sustainability in the foreseeable future, FinCanna has made the difficult decision to no longer fund QVI. We are currently in discussions with our secured debenture holders about a go-forward plan and will provide updates as additional information becomes available.”
FinCanna Capital Corp.
Andriyko Herchak, CEO & Director
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