1933 Industries Archives - Green Market Report

Debra BorchardtDebra BorchardtJuly 17, 2020
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5min3730

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 BorchardtDebra BorchardtNovember 29, 2019
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3min9190

1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) reported that its revenue increased 44% to $18.1 million in Canadian dollars for the fiscal year ending July 31, 2019. The revenue for 2018’s fiscal year was $12.5 million. Still, the company reported that it had a net loss of $19.1 million.

1933 noted that $5.0 million was attributed to a one-time non-cash impairment write-down of a non-performing subsidiary, $3.4 million in biomass purchases, non-cash share-based compensation of $2.2 million, $1.5 million in interest payments, a one-time non-cash loss on disposal of property and equipment of $1.9 million and a non-cash accretion expense of $1.2 million. The company also delivered an adjusted EBITDA loss of $10.1 million, compared to $3.1 million in 2018.

The total revenue for the fourth quarter was $5.4 million versus last year’s $3.8 million for the same time period. The net loss for the quarter was $5.6 million versus last year’s net loss of $3.8 million.

“Our second year of operations was met by a surge in market volatility, challenging capital markets and a changing regulatory environment,” said Chris Rebentisch, Chief Executive Officer. “Although not immune to sector-wide stock pressures and volatility, the Company remains positioned with growth and profitability in mind and we continue on target on this path. We are razor-focused on continuing to ensure the long-term viability of the Company. We have implemented cost-cutting measures aimed at reducing our current operating expenses, improving efficiencies and strengthening our product offerings while building a sustainable foundation.”

Gross margins fell dramatically to $815,690 (16%), compared to $2,197,803 (57%) during Q4 2018. Gross margins for fiscal 2019 were $5,296,980 (29%), compared to $6,351,466 (51%) during fiscal 2018, a decrease of 17% The decrease in the gross margin percentage from the prior year is primarily due to increased purchases by AMA of third-party biomass to produce concentrates and final products. The company said it expects to be producing sufficient amounts of biomass from its new facility, which is expected to significantly improve the realized gross margins. Partially offsetting the increased costs of AMA, Infused has significantly increased its customer base which has resulted in improved economies of scale in the production of CBD-based products, positively impacting overall gross margin.

Rebentisch added, “We forecast strong revenue growth in 2020 as we expand our proprietary portfolio of AMA branded THC flower and concentrates, continue innovating our unique, differentiated, quality-based CBD Canna Hemp portfolio and as our recently added licensing partnerships bear fruit. We anticipate significant margin improvements as we complete the build-out of new cultivation and production facilities in Nevada and become less reliant on wholesale biomass suppliers. With our focused vision on delivering the highest quality consumer branded goods, we have a disciplined growth path to scale up operations in 2020 and beyond.”

 


Debra BorchardtDebra BorchardtOctober 2, 2019
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8min20780

Vape products, once considered the rising stars of the legal cannabis marketplace have struggled under the weight of the vaping crisis. Massachusetts banned all vape products for four months in order to err on the side of caution while the issue is investigated. Around the middle of August, vape product sales began dropping according to data from Headset, however, it seems the group may be slowly recovering. The following table was provided by Headset.

Sales in Nevada and Washington both began to pick back up, while California seems to have stabilized. Most consumers are learning that the issues with vapes stemmed from products purchased outside the regulated channels. 

A report from the CDC (Center for Disease Control) stated, “In addition, the report from Illinois and Wisconsin showed that nearly all THC-containing products reported were packaged, prefilled cartridges that were primarily acquired from informal sources such as friends, family members, illicit dealers, or off the street.”

It seems illicit market and unregulated vape producers were using thickening agents like Vitamin E with disastrous results. The industry, in general, has suggested that regulation will solve this issue and many are trying to convince the consumer that they can trust a regulated brand.

“The widely publicized public health issue relating to the use of liquid vapes is something that SLANG takes extremely seriously,” said SLANG Worldwide (OTC: SLGWF) CEO Peter Miller. “We encourage investigation and research into the causes of this issue and hope that our collective understanding of the results leads to more thorough and effective regulation of the industry.”

SLANG said it is not aware of any of its products being identified as a contributor to any of the recent illnesses associated with vaping technology. SLANG is not currently operating in Massachusetts and had postponed plans to enter that state. It doesn’t expect to be adversely impacted by Massachusetts’ temporary ban on vaping products.

1933 Industries (CSE: TGIF) (OTCQX: TGIFF) said, “All our branded THC and CBD vape products do not contain vitamin E acetate, vegetable glycerin, or propylene glycol. All our products are made with ingredients that are known to be safe for consumers. All packaging contains our product ingredients, which are also listed on our website. Each and every product is third-party lab tested, and the results can be tracked via a QR code.”

Testing Boom

Of course, in order to be sure testing is the best way to go and this crisis could present an opportunity for the lab group to capitalize. CannaSafe, California’s leading accredited cannabis testing laboratory said it will expand contaminant testing to Vitamin E additives, in response to ongoing concerns around consumer vaping safety. CannaSafe is the first laboratory to offer this service and will also provide testing for additional additives including medium-chain triglycerides, vegetable glycerin, and propylene glycol in the coming weeks.

“Trusted cannabis companies are taking it upon themselves to impose high-quality standards on consumer products, and we are ready to work with any business that wants to show customers that their products are free of toxic additives,” said Aaron Riley, CEO of CannaSafe. “We also urge brands and retailers to share test results with their customers as a gesture of good faith.”

Modern wellness company, dosist, is the first brand to voluntarily undergo Vitamin E testing with CannaSafe. Other brands that will utilize Cannasafe’s testing technology include Orchid Essentials, Select, Heavy Hitters, Stiiizy, King Pen, Lowell Herb Co., Pure Vape, Tikun, and Raw Garden. The Vitamin E test is available to brands and manufacturers across the state for an additional $225.

 


William SumnerWilliam SumnerMay 15, 2019
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4min8210

It’s time for your Daily Hit of cannabis financial news for May 15, 2019.

On the Site

CNBC’s Tim Seymour Goes One On One With SLANG’s CEO Peter Miller

Miller talks about the early days of cannabis legalization in Canada, the fast growth of SLANG and new products being launched by Firefly. Watch Now

Illinois’ Cannabis Rules Dissected at the Green Market Summit

The Governor of Illinois recently released details of the state’s proposed rules for adult-use cannabis. The Green Market Summit had organized a panel that took place just days after the announcement in Chicago. Watch Now

The Green Organic Dutchman

After the markets closed yesterday, The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCMKTS: TGODF) reported their first quarter financial results for the period ending on March 31, 2019. Quarter-over-quarter revenue rose by 28% to $2.4 million. Much of that revenue was generated from the recently acquired HemPoland. The company experienced a net loss of $14.1 million.

In Other News

Aurora Cannabis

Late yesterday, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) announced their third quarter financial results for the period ending on March 31, 2019. Net revenue was $65.14 million, up from $54.17 million in the previous quarter. Adjusted EBITDA was $36.6 million, down from $45.52 million in the previous quarter. The company incurred a loss of $158.35 million.

Cannara Biotech

Cannara Biotech (CSE: LOVE) (OTCQB: CNBTF) announced today that it has commenced trading on the OTCQB® Venture Market under the symbol “CNBTF”. “Cannabis and hemp-CBD markets are global markets, with customers, vendors and investors domiciled across all major industrial nations,” said Zohar Krivorot, President and CEO of Cannara. ” Having a listing in the U.S. not only provides easier access for U.S. and international investors to our story, it supports our mission of being a North American premium provider of health and wellness products in large and growing product categories.”

1933 Industries

1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) announced that its subsidiary, Alternative Medicine Association, has completed a sale and lease back for its cannabis cultivation facility in Las Vegas, Nevada. The purchase price for the transaction was $10.45 million, which the company has received minus a $500,000 hold back to be released upon the completion of the facility and issuance of permanent occupancy permits, and a $250,000 hold back to be released upon issuance of state and local permitting for the facility. The transaction included a lease-back agreement for 10 years, with an option to renew for two additional five year periods.

 


StaffStaffApril 8, 2019
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4min7230

It’s time for your Daily Hit of cannabis financial news for April 8, 2019.

On The Site

POSaBIT

Seattle-based fintech company, POSaBIT began trading this morning on the CSE under the ticker PBIT.  The company that serves cannabis retailers by delivering bitcoin-enabled payment processing and point-of-sale systems, with built-in compliance features customized to the state each retailer operates in.

For the nine months ending Sept. 30, 2018, the company generated $1.39 million in revenue, a 266% increase over the prior year for the same time period. The company said that pursuant to private placement financings undertaken in conjunction with the listing, POSaBIT generated gross proceeds of $1.3M. The company’s footprint includes California, Nevada, Oklahoma, Colorado, and Washington.

In Other News

1933 Industries

Cultivator and producer of cannabis flower 1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) signed a licensing agreement dated April 3, 2019 between House of Hawk, LLC and the company’s subsidiary, Infused MFG, LLC for the launch of several co-branded CBD wellness products for a two-year term in North America.

Chris Rebentisch, USA COO and Founder of Infused stated, “It’s truly an honor to be working with Tony Hawk’s Birdhouse Skateboards™ brand and their incredible organization. Birdhouse team members Clive Dixon, Ben Raybourn, David Loy and Clint Walker will help support the new partnership via social media. The opportunity of offering our sports recovery products under a partnership with Hawk’s brand Birdhouse adds credence to our brand. Tony is an internationally recognized action sports figure and responsible for fuelling the growth of skateboarding as a professional sport.” Mr. Rebentisch added, “Infused recognizes that the action sports vertical is an underserved market. Our mission is to offer the best of breed recovery products in the market today and we look forward to working with Birdhouse in this endeavour.”

Mr. Tony Hawk remarked, “We’re excited to be a part of this new movement that is becoming more recognized as a healthy alternative to recovering from the aches and pains that we regularly incur in the action sports world. And we couldn’t be happier to join forces with Canna Hemp™, an established and trusted partner with an expertise in this market.”

Greenlane

Greenlane Holdings, Inc.  has commenced an initial public offering of 5,333,333 shares of its Class A common stock, of which Greenlane will be offering 4,666,666 shares and the selling stockholders will be offering 666,667 shares. In addition, the selling stockholders will also grant the underwriters a 30-day option to purchase up to an additional 800,000 shares. The price range for the initial public offering is currently estimated to be between $14.00 and $16.00 per share. Greenlane has applied to list its Class A common stock on the Nasdaq Global Market under the ticker symbol “GNLN.”

Cowen and Canaccord Genuity are acting as joint-lead bookrunners for the proposed offering. Ladenburg Thalmann & Co. Inc., Roth Capital Partners and Northland Capital Markets will act as co-managers for the proposed offering.



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