Vertically integrated consumer cannabis company 1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) delivered its third quarter results for the three months ended April 30, 2019, in Canadian dollars. Revenues of $4.6 million increased 40% over last year’s $3.7 million for the same time period. The rise was a 28% increase sequentially.
The net loss rose to $7.2 million versus last year’s net loss of $2.9 million. The company attributed the increase in losses to the investment in the company’s consulting arm, Spire Global Strategy. 1933 said that it acquired Spire on the basis of an independent valuation, a strong team, and a solid business plan to provide services to the burgeoning cannabis sector in Canada. The company added that the expected revenue and future market development of Spire were not realized. 1933 said that its strategy has since shifted to consolidate its focus on the nation-wide growth of its consumer branded goods and supporting cultivation and extraction assets, where the value proposition of these sectors to the business provides a better return on investment.
CEO Chris Rebentisch said, “Overall, we are pleased to report strong growth comparatively to our last quarter, driven by rising consumer demand for our AMA cannabis products in Nevada and the impressive growth of our Canna Hemp line throughout the United States, which is one of the largest growing cannabis markets globally. Since becoming a publicly-listed issuer two years ago, we have focused on building one of the most valuable and respected CBD brands in the market and in successfully growing THC market share in Nevada, where we continue to be one of the largest suppliers of wholesale branded products in the State, with a major presence in every dispensary. We have spent significantly on the expansion of our infrastructure to support the future growth of our brands and have increased spending in product development, inventory build-out and sales and marketing efforts”.
1933 closed a non-brokered private placement of 10,000,000 units at $0.45 per unit for total proceeds of $4.5 million, which was fully subscribed by one investor. After the end of Q3, the company reported it closed a sale-leaseback transaction for the land and cultivation facility under construction in Las Vegas, Nevada. The company sold the assets for C$14,027,035 or $10,450,000 less various adjustments for title fees, commission, and transfer taxes, which resulted in a net sale price to the company of C$13,328,701 or $9,862,700.
1933 has a portfolio of over 250 SKUs of THC and CBD-infused products. It has signed three significant licensing agreements over the period with household brand names such as OG DNA Genetics, Birdhouse Skateboards, and Gotti’s Gold.
AMA signed a licensing agreement with OG DNA Genetics, a globally recognized leading cannabis brand, for the exclusive license to cultivate, manufacture, sell and distribute co-branded cannabis products for a two-year term in the State of Nevada.
Infused announced a partnership with Birdhouse Skateboards™ for the exclusive launch of co-branded hemp and CBD products geared towards the growing action sports market. The collaboration between one of the most respected skateboarding names in the world and Infused aims to develop several co-branded products, including CBD recovery creams and lotions, as well as hemp-only recovery creams and lotions which will be sold under Canna Hemp, Canna Hemp X and Birdhouse Skateboards names.
AMA strengthened its partnership with hip hop artist Kurupt for the launch of Gotti’s Gold in Nevada, an exclusive premium collection of fine cannabis products intended to appeal to adult-users of all demographics, in order to meet the rising demand for cannabis products in the state.
AMA and Infused continued developing and creating unique brands with the launch of Canna Fused, a line infused with CBD and THC in a variety of ratios, featuring vape pens, cartridges, lotions, and lip balms. Infused subsequently launched Endurance and Recovery Elixirs, under the Canna Hemp X™ line of sports action products and engaged professional athlete and mixed martial arts fighter Sarah Moras as a Brand Ambassador and sponsored-athlete.