Novus Accomplishments in 2018 Are Precursor to Accelerated Growth for 2019


CEO Explains How 2019 is the Breakout Year

MIAMI, FL, Jan. 08, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Novus Acquisition and Development, Corp. (OTC Markets: NDEV), through its wholly owned subsidiary WCIG Insurance Services, Inc., is a diversified insurance entity in health, annuity and accident, and, the nation’s first carrier/aggregator offering a cannabis health plan, is pleased to provide a review of its accomplishments in 2018 and how they are expected to lead to accelerated growth and expansion to its cannabis health insurance business model for 2019.

Novus management has the distinct pleasure to share the Company's milestones to-date and provide new and existing shareholders insight regarding our plans for growth as we seek to expand our business model with a focus on increasing revenue and net asset value.

In reviewing this summary, we will focus on our accomplishments, how they impact the cannabis industry and how they are expected to drive an increase in market share and growth. 

Notable Accomplishments from 2018

The achievements are expected to be catalysts for accelerated growth in 2019.

a)  Professional Employment Organization (PEO):

PEO’s are companies that sell business insurance, employee benefits and administration services on the behalf of employers. During the third quarter of 2018, the emergence of interest from PEO’s saw the value proposition of where they can generate revenue by bundling our cannabis health plans. Our current contract with Alloy Insurance Services targets 50,000 employees looking for alternative benefit plans. We expect to enter into similar contracts with additional PEO’s making our future growth effort productive.

b)  FinTech Alignment:

We contracted with Revolution Insurance Technologies (RIT), a Silicon Valley FinTech that owns a proprietary digital platform that integrates benefit packages from the world’s top insurance carriers. This partnership assists insurance broker/agent to create customized packages from diverse carriers and bundle those products that meet the needs and price of the customer. To-date we have recruited 450 agencies/brokers/affiliates to educate and sell our cannabis health plans to the consumer and now with RIT, we send them to one platform that will assist them in efficiently adding our product in one bundled quote.  

c)  Increase Enrollments with CBD

In 2018, Novus experienced an increase by 20% of CBD enrollments. This was contributed to our contract with U.S. Hemp Wholesale, the country’s leading CBD provider with channels of distribution from the country’s top 20 CBD manufacturers that drop-ship to Novus’ patient /member network.

The growth potential of CBD could be worth $20 billion by 2022.  The future of CBD and its effectiveness is promising with the Federal Farm Bill that was signed into law before Christmas, permitting all states to cultivate hemp. On a regulatory level this is a complex issue since the new law eliminates hemp-derived products from its Schedule I status under the Controlled Substances Act but does not legalize CBD federally. The only exemption is GW Pharmaceutical’s Epidiolex, a pharmaceutical grade of CBD. This action now plays a key part to controlling the barrier of entry for many new CBD products with the cost of research and development contributing to a stronger new market. 

d)  Challenges From State And Federal Regulators

2018 reflected many challenges to Novus and the cannabis industry, particularly in the following areas:

  • Attorney General Jeff Sessions threatened to dissolve the Cole Memo 
  •  Local law enforcement shutting down numerous Michigan dispensaries, and
  •  Dramatic increase of taxation by state regulators in certain townships in California

However, all three detriments proved to be short-term and resulted in more positive outcomes by the end of 2018. Sessions left office without making any impact on the Department of Justice to enforce marijuana prohibition.

In Michigan, we lost 40% of our in-network dispensaries due to new regulations imposed by the state shutting down many retail locations. However, the state has since issued an additional 50 new licenses for the opening of dispensaries in and around the Detroit area, and they are rapidly becoming in-network providers. 

The California tax hike resulted in a positive favor for Novus with an increase of patient members enrollments by 5% in that state, showing that Novus has some resiliency to this adversity with the dexterity to adjust and adapt. 

e)  Expanding Co-Branding Contract: 

Marketing our cannabis health plan continues to be challenging with strict federal and state rules as well as restrictive social media platform guidelines making it a constant task to procure new patient/members. 

We overcame this obstacle by executing a contract with Enlighten, a well-known in-dispensary interactive advertising platform that educates the consumer at the point of sale with tailored offerings. Its technology platform is intended to increase revenue and awareness and keep customers engaged on Novus’ suite of health plan packages. Adding this venue to our marketing and advertising mix is estimated to increase patient/ members this year. You’re invited to review our revised benefits packages: http://bit.ly/2PjDvon.

f)  Third Quarter 2018 Highlights:

  • 9 consecutive quarters of revenue growth
  •  Quarterly Gross Revenue increased 27%, three months ended September 30, 2018, as compared to the three months ended September 30, 2017 
  •  Total Gross Revenue increased 30% for the nine months ended September 30, 2018, as compared to the nine months ended September 30, 2017 
  •  Demonstrated 58.5% profit margin pricing structure 
  •  Quarterly Net Income increased 21.1% for the three months ended September 30, 2018, as compared to the three months ended September 30, 2017 
  •  No dilution as total shares outstanding remained unchanged at 98,233,624 
  •  Shareholder equity increased slightly at $1,416,395 net asset value

We invite you to review the entire filing here: https://www.otcmarkets.com/stock/NDEV/filings

g)  Status Of Provider Network

2018 showed continued growth of cannabis cultivators, manufacturers and retail in our network, by a 12% increase, totaling 320 providers enrolled, of which 173 are actively participating. We believe to see more of these providers become active, as we develop enrollments in their respective areas.

These verticals are experiencing the ever-increasing competitiveness as the cannabis retail market expands. Our goal is to build bridges for those verticals that once turned down to participate in our provider network; these same entities are now seeing Novus’ value by driving a customer base with higher than average monthly cannabis purchases. With proper development this expansion may cover an area that encompasses approximately 30 million people in the United States and another 15 million people in Canada, making Novus Cannabis MedPlan a fundamental to health plans in North America.

h)  Novus Stock:

Wall Street experienced increased market volatility and downward pressure toward the end of 2018 that has impacted many sectors, and cannabis is no exception.  Of the top 12 cannabis stocks that have market caps of $400 million or more, only 3 are profitable. Even though Novus trades at a much lower market cap, our sustainability in the public markets is proficient and we trade in what could be considered below valuation despite our profitability and net asset value, in fact we are essentially debt free, aside from the $102,000 that is owed to our CEO.

The outlook for 2019 as the cannabis market continues its acceptability and value in the eyes of retail investors: we are seeing institutional investors entering the market and soon will be a driving force in this sector.

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In Summary

Cannabis is in focus from Main Street to Wall Street and around the globe with many countries grasping at the prospects within this lucrative industry. It has been reported large consumer brands partnering with cannabis companies to be able to enter the emerging market opportunity in cannabis, Scott Miracle-Gro, Altria and Constellation Brands to name a few. 

Also, there is a confidence in the cannabis sector by many prominent entrepreneurs, by joining public company Boards or forming new company ventures. Irwin Simon of Hain Celestial and the Schottenstein Family by joining Aphria and forming Green Growth Brands. Growth and consolidation will continue as this newly-regulated industry becomes a fixture of the global economy. 

Since 2015 the business model has gone from getting proper licensing to now performing profitably with limited overhead. The next level of the playing field to be winner in this sector is increase enrollments and expand our business model internationally. We look forward to the continued development of our success and we invite you to join us in that journey.   

Novus Capital Structure:

  • No Convertible Notes
  • 98,233,624 common shares issued and outstanding
  • No sales of insider shares since the third quarter of 2015
  • Leak Out Provisions on all shares issued 

We invite you to do your due diligence here: 

About Novus

Novus Acquisition & Development Corp. (NDEV), through its subsidiary WCIG Insurance, provides health insurance and related insurance solutions within the wellness and medical marijuana industries in states where legal programs exist. Novus has developed its infrastructure within many lines of the insurance business such as, health, property & casualty, life, accident and fixed annuities. 

Operating under the d/b/a Novus Cannabis MedPlan the business model is divided into three components: 

  1. Medical Cannabis (THC-based meds) can render risk and non-risk insurance models in Oregon, Hawaii, Michigan, Arizona, Colorado, California, Washington, New York, Massachusetts, Florida and Vermont. 
  2. CBD MedPlans are available nationwide. 
  3. Traditional Benefit Packages: Novus also sells benefit packages nationwide in medical marijuana CBD concentrate, dental, vision, diabetic supplies, prescriptions and hearing

Novus medical cannabis benefits package will work as outside developers and will not cultivate, handle, transport grow, extract, dispense, put up for sale, put on the market, vend, deliver, supply, circulate, or trade cannabis or any substances that violate the United States law or the Controlled Substances Act, nor does it intend to do so in the future and will continue to follow state and federal laws. The statements made about specific products have not been evaluated by the United States Food and Drug Administration (FDA) and are not intended to diagnose, treat, cure or prevent disease. All information provided on these press releases or any information contained on or in any product label or packaging is for informational purposes only and is not intended as a substitute for advice from your physician or other health care professional. Once a push notification is competed the transaction is solely between the state-licensed dispensary and the registered patient.

The state laws conflict with the federal Controlled Substances Act. The current administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state designated laws, allowing the use and distribution of medical marijuana. However, there is no guarantee that the current administration, nor any future administration, will not change this policy and decide to enforce the federal laws strongly. Any such change in the federal government's enforcement of current federal laws could cause significant financial changes to Novus Medical Group. While we do not intend to harvest, distribute or sell cannabis or cannabis related products, we may be harmed by a change in enforcement by federal or state governments.

Forward-Looking Statements

This release includes forward-looking statements, which are based on certain assumptions and reflects management's current expectations. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of these factors include: general global economic conditions; general industry and market conditions and growth rates; uncertainty as to whether our strategies and business plans will yield the expected benefits; increasing competition; availability and cost of capital; the ability to identify and develop and achieve commercial success; the level of expenditures necessary to maintain and improve the quality of services; changes in the economy; changes in laws and regulations, includes codes and standards, intellectual property rights, and tax matters; or other matters not anticipated; our ability to secure and maintain strategic relationships and distribution agreements. Novus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



            

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