Novus Acquisition and Development Corp (OTCMKTS:NDEV) shares rose 21.41% on Wednesday to $0.840 and were flat in after-hours trading. Share prices have been trading in a 52-week range of $0.01 to $1.51. The company has a market cap of $1.33 million at $1.92 million shares outstanding.
Through its subsidiary WCIG Insurance, Novus Acquisition and Development Corp is a company that provides health insurance and related insurance solutions within the wellness and medical marijuana industries in states where legal programs exist. It has developed its infrastructure within many lines of the insurance business such as, health, property & casualty, life, accident and fixed annuities. Its 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.
In its management discussion and analysis for 2017, Novus Acquisition and Development Corp emphasized its plans to continue to expand the availability of the Novus MedPlan in additional legal cannabis states. After the November 8 vote, there are now 29 states that have approved legalized medical cannabis of which 23 million potential patients qualify for some sort of legal cannabis nationwide. Among the states that can sell the Novus MedPlan are California, Oregon, Michigan, Massachusetts, Connecticut, Washington, Colorado, Arizona, New York, and Vermont.
However, management did note that the process is arduous since it involves dealing with each State Department that regulates insurance laws, cannabis laws, securities laws and fiduciary requirement laws. Another barrier to entry is engaging with cannabis cultivators, manufacturers and dispensaries called Provider Networks.
Still, being the first to bring health coverage to the legal cannabis segment gives Novus Acquisition and Development Corp a competitive advantage over other insurance companies. It also noted that it the company has been able to overcome impediments in 2016 by stabilizing depository relationships with banking entities. The company also stated that their optimization curve on their digital ad placement platform is still being tweaked and access to this digital marketing technology will give them the ability to increase to approximately 5-6 million viewers per month within the next 30-45 days.
Novus Acquisition and Development Corp added that it implemented a Beaconing technology, which allows the creation of a beacon over certain locations targeting the consumers location through their mobile device. It can then pick up that data and create a cross device digitization for re-targeting purposes once the consumer returns to their location of business or residence.
Our core business is health in legal cannabis, liability, annuities and accident insurance lines. It is our contention that we believe that smart money focuses on diversity and the competitive advantage of being an insurance company. It is imperative to let shareholders know that our focus is the cannabis sector, but understand as our popularity grows, we are being approached by other entities that grant us opportunities in diversified insurance lines that cant be ignored,” the company’s press release indicated.
In terms of insurance diversification, Novus Acquisition and Development Corp projected that the next five years insurance lines will increase by triple digits in legal cannabis, freight trucking, and full healthcare. After all, the Trump administration’s proposed repeal of Obamacare could create a more competitive market for health insurance companies all over the country.