Novus Cannabis MedPlan Reports Third Quarter 2021 Results Future Of Employer-Sponsored Health Plans Pave Way To Added Revenue
Miami FL
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October 28, 2021 09:03 AM Eastern Daylight Time
Novus Acquisition and Development, Corp. (OTC Markets: NDEV), through its wholly-owned subsidiary WCIG Insurance Services, Inc., is a hybrid health insurance entity and, the nation’s first health carrier offering cannabis in health plans to recreational and medicinal users, today reported its third-quarter financial results for the three months ended September 30, 2021, and update on the progression of its business model.
Employer-Sponsored Health Plans
As Novus comes out from under the COVID crisis we’re experiencing a breakthrough development in our effort to penetrate “Insurance Group Sales” in the small to midsize businesses (SMB) market. As SMB’s desire to compete and expand, it is essential to attract and retain their talent pool with competitive health benefits, but affordability remains an issue as healthcare costs rise faster than inflation.
According to the Bureau Of Labor Statistics, more than half (57%), of SMB workers did not have employer-sponsored health benefits. The top perks employees seek are employer-sponsored, dental, vision, and Health Savings Account (HSA).
Novus cannabis benefits packages fit into this niche, with the desirability of cannabis and the affordability of premiums with additional benefits. SMB’s continue to contact us, and their views on employee legal cannabis use have become more relaxed. And rightly so, when precedence was set in the New Jersey Supreme Court ruling, where employees who legally use cannabis as permitted by the state’s Compassionate Use of Cannabis of Medical Marijuana Act[i] cannot be fired.
The authenticity of cannabis benefits in employee health plans gives Novus the ability to capture more value from selling individual policies to the economics of selling to the multitudes.
Expansion Of Partnerships
Partnerships continue to increase with agreements with Health Carriers , Third-party Administrators, Pharmacy Benefits Managers, Professional Employment Organizations, and Brokers in Group Sales. These partnerships encompass adding cannabis benefits as a rider and/or as a supplement bundle to consumer health plans. They see how Novus benefit packages are an enticement to acquire new clients and up-sell existing ones.
The unique characteristics of our business model is based on the acceptance of cannabis being a benefits package to health plans. According to Forbes“by 2025, 5.4 million Americans, or 2.4% of U.S. adults, will be registered patients in medical cannabis states.”
However, that 2.4% will considerably increase as the price of cannabis proliferates with added state/federal taxation to recreational products, alluring rec users to seek health plans that include cannabis. The success of our business model is making cannabis affordable to our patient /members by reducing the cost of the plant by 30%-35% combined with a 15%-17% abatement in taxes at the point of sale.
Illicit Cananbis Market
Recently California authorities eradicated 509,453 plants from 135 sites in the past 13-weeks with an undisclosed report of how much the operation cost the state government. We continue to advise cannabis verticals and state officials on using Novus insurance plans to cost-effectively combat illicit cannabis which will top $4 billion by 2025 as reported by New Frontier Data.
These entities will quickly understand that by utilizing Novus insurance plans how compliantly we will corral med and rec users towards legal brands, we are confident that it is clearly discernable that this methodology is far superior to expensive law enforcement measures.
Provider Network
Our Provider network covers over 20,000 zip codes. The expansion of our Provider network is a continuous effort to develop underserved markets despite the slow down due to COVID. The procurement of reliable cannabis verticals as a Provider is the most arduous and nonlinear undertaking in our business model and it will be the same for any new competition. Having a head start as far back as 2016, we believe, we will leave very little resources to potential rivals in this department.
Financial Highlights
Financial milestones within the third quarter of 2021:
- No Dilution: No common stock was issued
- Three Month Revenue Increase: $6,656 or 9.8% to $67,955 for the three months ended September 30, 2021, as compared to $61,299 for the three months ended September 30, 2020.
- Six Month Revenue Increase $11,477 or 8.8% to $132,686 for the six months ended September 30, 2021, as compared to $121,209 the six months ended September 30, 2020.
- Profit Margin: Demonstrated a 36% profit margin pricing structure in its business model for the three months ended September 30, 2021
- Net Income Increase: $4,202 or 17% to $24,888 for the three months ended September 30, 2021, as compared to $20,686 three months ended September 30, 2020
- Shareholder Equity Increase: $1,481,889 on September 30, 2021, from $1,465,967on September 30, 2020
- Cash and Cash Equivalents Increase: Moderately from $157,888 on September 30, 2020, to $158,195 three months ended September 30, 2021. Due to the cost of integrating Novus and PRAM back-office data to support their newly acquired clientele.
- Cash Flow: Increased 16% to $48,968 for the six months ended September 30, 2021, as compared to $41,270 the six months ended September 30, 2020.
Conclusion
Frank Labrozzi, CEO states, “We are fervent as we make cannabis health insurance mainstream. The acceptance of cannabis in employer-sponsored health plans combined with the inclusion of our benefits into health carriers plans makes the first-mover advantage of our infrastructure a successful perspective towards the value of our insurance model.”
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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.
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 completed the transaction is solely between the state-licensed dispensary and the registered patient.
The state laws are in 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 reflect 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.
Contact Details
Novus Acquisition & Development Corp.
Frank Labrozzi
+1 855-228-7355
Company Website
