1933 Industries Gets C$5 Million Private Placement

1933 Industries Inc.  (CSE: TGIF) (OTCQX: TGIFF) reported that it has agreed upon a non-brokered financing of up to C$5,000,000. 1933 said that the offering will consist of the sale of up to 66,666,666 units at a price of C$0.075 per Unit. The offering is expected to close on or about August 14. The stock was lately selling at C$0.07. The proceeds will be used for ongoing business development and general working purposes.

1933’s CEO Paul Rosen said, “1933 Industries has the assets in place to build a self-sustaining and profitable business. Our new cultivation facility in Las Vegas is now running at full capacity and we have launched new hemp and CBD wellness products and opened up new sales channels, including through Amazon and Walmart. We have cut our public entity expenses by 68% and our non-operating expenses by 46% since November 2019, and we continue to move aggressively to control costs. This financing will strengthen our balance sheet and provide additional cash reserves to manage COVID-19 related uncertainty while we execute on our strategy.”

The company has two subsidiaries and controls all aspects of the value chain with cultivation, extraction, processing, and manufacturing assets supporting its diversified portfolio of cannabis brands and licensing partners. 1933 owns 91% of Alternative Medicine Association, LC (AMA), and 100% of Infused MFG LLC.

Brands include: AMA flower and AMA concentrates, as well as CBD-infused Canna Hemp™, Canna Hemp X™, and Canna Fused™ products. Partners under licensing agreements include: Birdhouse Skateboards™, Blonde™ Cannabis, Bloom™, Denver Dab Co., Grizzly Griptape, OG DNA Genetics, The Pantry Company, PLUGplay, and The Original Jack Herer®.

Wal-Mart

1933’s Canna Hemp announced earlier this week that it has made its products available for sale through the retail giant, Walmart.com. Walmart currently occupies one of the top spots in the hierarchy of online retail, as one of the largest online retailers for supplements and natural health products. Health products have been a major seller within Walmart.com’s online marketplace, and Walmart expects online sales to grow by more than thirty percent by the end of 2020.

“Walmart has been the next natural move for Canna Hemp, as the brand continues its expansion throughout 2020. Understanding the online marketplace and maintaining a stable e-commerce presence is vital for success in today’s web-based economy. Currently, Canna Hemp’s products are available through its website, cannahemp.com, as well as a host of other e-commerce sites, with more to come as the brand continues to grow.”

Deal Terms

Each Unit will consist of one common share of the Company and one half of one transferable share purchase warrant. Each whole share purchase Warrant will entitle the holder to acquire one Common Share at an exercise price of C$0.125 per share for a period of 24 months following the closing date of the Offering. The net proceeds of the Offering will be used to fund the Company’s ongoing business development and general working capital.

Each Warrant is subject to an accelerated expiry. If the closing price of the company’s common shares exceeds C$0.25 per share for a period of 10 consecutive trading days, the company may provide notice of acceleration, after which holders of the Warrants will be entitled to exercise their Warrants for a period of 30 days. All securities in respect of the Offering will be subject to a four month and one day hold period commencing on the Closing Date.

The company recently announced amendments to its convertible debentures, including the deferral of interest payments to the maturity date in September 2021 (refer to news release dated June 29, 2020).

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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