HempFusion (TSX:CBD.U, OTCQX:CBDHF) Wellness Inc has unveiled an initiative starting next year aimed at driving annual savings of $4 million and planting the business on the path to profitability.
Project OPTIMIZE will focus on the firm's large family of brands and on three major areas - the optimization of workforce, supply-chain and marketing, the company said in a statement, in which it also updated on its retail growth expectations for 2022.
"This past year included several significant milestones for HempFusion (TSX:CBD.U, OTCQX:CBDHF), including the acquisition of two very strong brands in Apothecanna and Sagely Naturals. As we progressed through the integration process, we identified several optimization opportunities to drive efficiencies and help achieve our goal of near-term profitability,” said CEO Jason Mitchell.
In terms of workforce, a new organizational alignment will eliminate several redundant positions in a move expected to drive over $2.5 million of annual cost savings, the company said.
HempFusion (TSX:CBD.U, OTCQX:CBDHF) added that it was also in the final stages of consolidating and optimizing its supply chain, which is expected to drive over $1 million of annual savings.
The company also plans to unify its marketing, branding and digital efforts and drive an enterprise-focused approach to growing the business, expected to drive over $500,000 of annual cost savings.
READ: HempFusion Wellness reports year-over-year, triple-digit increase in 3Q revenue
In the retail update, HempFusion (TSX:CBD.U, OTCQX:CBDHF) highlighted the firm had already exceeded its 2021 target for new doors of 2,000, adding over 3,000 doors and counting.
That includes its subsidiary Sagely Enterprises, which now has up to seven stock-keeping units (SKUs) carried across 1,200 stores of Kroger, as well as distribution in around 1,200 Target stores.
"During 2022, HempFusion (TSX:CBD.U, OTCQX:CBDHF) anticipates acquiring between 3,000 and 4,000 new retail doors, with the focus remaining in the Food, Drug and Mass (FDM) channel. This would put total company estimated retail distribution to just over 18,000 retail doors across the United States," the company told investors.
Jon Visser, HempFusion’s chief operating officer added: "Our new enterprise-focused approach should provide immediate benefits for our retail expansion initiatives, and we expect active discussions with several large FDM retailers across the US to contribute to our 2022 goals.
"Our leading position on the regulatory side has provided us credibility with large national US retailers. As the regulatory environment continues to evolve, we anticipate our significant distribution presence will set the company up for continued significant future growth."
Contact the author at giles@proactiveinvestors.com