Slang Archives - Green Market Report

Video StaffVideo StaffMarch 5, 2019

6min4330

Recorded at the Accelerate Cannabis event in Newark NJ.

Debra Borchardt, Editor, GMR

Slang and Organa Brands just recently did a merger/acquisition. How is it?

Chris Driessen, President, Organa Brands

Oh, it’s been great. It’s been great. It’s been an absolute dream come true. So Slang acquired Organa Brands, so now we’re part of Slang, and it’s been awesome. Our partners, Billy Levy and Peter Miller are great capital markets guys, a lot of experience coming out of Canada, plugged in with us, obviously on the cannabis distribution side, and so far it’s been a match made in heaven.

Borchardt: Now, Organa was already killing it. You guys did over $100 million in sales since 2014, so already a really strong company. What is Slang going to do for you at this point?

Driessen: You know, the ultimate reason we decided to go public and move forward with the transaction, when you looked at what was happening in Canada, and the multiples on these businesses, we really had an honest conversation between myself and my partners to say, “Gosh, we could run the best cannabis business in the world, and you’re just not going to be able to keep up with what’s happening in the public markets.” It was also something that gave us a lot of trepidation, because it’s something we knew little, if nothing, about. So we wanted to identify who was likely going to give us the best opportunity at success in that world. We were very confident, obviously, in what we do, and getting merged up with the partners we did, and Peter and Billy, as I said, it’s just been … it’s been great. It just allowed us really to capitalize yourself to execute on a strategic growth plan and continue expanding our empire.

Borchardt: And, you just signed a deal with Trulieve which is going to get you guys into Florida. So, this seems like a really great combination, because Trulieve already their flag planted in Florida, and you guys have the product, so …

Driessen: Yeah. They are the 800-pound gorilla in the room in Florida. They have, according to the Department of Health, a 60+% market share. And as you know, we go and we really do a lot of due diligence in vetting on our partners when we want to enter into a relationship, and over time it was just clear that their culture, their vision for the Florida market, the infrastructure, just the passion they share for bringing products to the patients in Florida really aligned with what we were trying to create. So it just seemed like a great fit, and over time I think that’s going to bear itself out.

Borchardt: So, do you have any new products on the pipeline, for Organa?

Driessen: We do. We’ve got a lot of fun stuff lined up for this year. One of the newest things that we’re going to be releasing is actually the week after next is the new reiteration of our reserve line. It’s a botanical and terpene-based value-based cartridge. Craft Reserve does great cannabis-derived dominant market share in pretty much every market we’re in. What we’ve identified is that there’s a huge section of the population out there that, you know, wants a quality product at a great price. So being able to provide that to patients and consumers everywhere is something we hold near and dear to us, and I feel really good about it. It’s a winner of a product.

Borchardt: Absolutely. With taxation so high in so many places, it’s really important for the cannabis companies to recognize that for the consumers that are already going to have to have this added expense on top of their purchase.

Driessen: Yeah, no doubt about it. We spend a lot of time segmenting out our products into different tiers, and then obviously doing different pricing segmentation within those tiers. But it’s all about the business of how do I match you up with the best product for what your individual situation is, and we do a pretty good job of that.

Borchardt: Alright, well, I’m excited. I can’t wait to see this new reserve product.


Debra BorchardtDebra BorchardtFebruary 19, 2019
openvape.jpg

4min6650

Fresh off its successful IPO, SLANG Worldwide (CNSX: SLNG) has formed a strategic partnership with Florida-based Trulieve Cannabis (OTC: TCNNF) to offer cannabis patients in Florida access to leading cannabis brands in Trulieve’s dispensaries across the state. As part of the agreement, Trulieve will have an exclusive license to SLANG’s extensive portfolio through its U.S. subsidiary, National Concessions Group, Inc. better known as Organa Brands.

Florida is quickly establishing itself as a significant cannabis market in the U.S.  The state has registered over 180,000 medical cannabis patients, a number that has tripled since 2017. According to the Florida Department of Health, Trulieve is responsible for consistently producing and distributing between 60% and 80% of cannabis in the state. The company has 24 dispensaries and home delivery available throughout the state.

“Great partnerships and collaboration are foundational to SLANG’s culture, scalability, and growth strategy,” said SLANG’s CEO Peter Miller. “Not only does Trulieve operate one of the most impressive cannabis cultivation and distribution businesses in Florida, they also share SLANG’s commitment to bringing leading cannabis products to consumers. Every year, SLANG products deliver millions of high-quality cannabis experiences to consumers around the world and, in partnership with Trulieve, we look forward to providing those same exceptional cannabis products to Florida’s patients.”

As a result of the partnership, SLANG will introduce the O.penVAPE, Bakked, District Edibles, and Magic Buzz product lines to Florida medical patients. The company said that the availability of edible products will be subject to regulatory approval by the Florida Department of Health. As part of the agreement signed by the two groups, SLANG will collaborate with Trulieve with regard to the production and distribution of the SLANG portfolio of products, offering in-house training to staff in preparation for production and distribution exclusively through Trulieve.

“SLANG operates with the same goals as Trulieve, working to expand patient access and create products that are high-quality, consistent, and reliable,” said Trulieve CEO Kim Rivers. “SLANG’s expansive portfolio ranges from vaporizer cartridges to edibles to concentrates, all products that will provide Florida’s patients with the effective, natural relief they’re seeking in ways that are innovative and fresh.”

According to an Arcview report titled the State of Legal Marijuana Markets, Florida is estimated to have 550,000 legal potential consumers by 2022. It is projected to reach $1.7 billion in legal spending by the year 2022. The report also stated that medical cannabis sales are expected to reach $456 million in 2018, up from $192 million in 2017.

 

 


Video StaffVideo StaffFebruary 1, 2019

3min9511

SLANG Worldwide went public this week using the symbol SLNG and trading on the Canadian Securities Exchange. The shares were priced at $1.50 and jumped 33% on the first day of trading to $1.99. The company is a merger between Slang and Organa Brands, the vape powerhouse that has done over $100 million in sales since 2014. Firefly is also included in the new company.

Organigram Holdings Inc. reported its first fiscal 2019 quarter results with net sales for the three months ending November 30, 2018, of $12.4 million, up 419% from $2.4 million in Q1’2018.  Sales rose 287% sequentially as the impact of legal adult use sales in Canada continues to be felt on the income statement. Net income for the quarter was $29.5 million

Sproutly Canada, Inc. announced financial results for the quarter ending November 30, 2018. The company reported a net loss of C$2.8 million or $0.02 per diluted share for the quarter versus last year’s net loss of C$473,405 for the same time period. In the filing, Sproutly noted that it has not generated any revenues from operations and has incurred losses since inception. The company has an accumulative deficit of $12,312,832

Innovative Properties Inc. d/b/a Nabis Holdings entered into an agreement with Canaccord Genuity Corp. and Eventus Capital Corp. for a brokered private placement of debenture units of up to C$30,000,000.

Dixie Brands Inc.  (CSE: DIXI.U) and Khiron Life Sciences Corp. (OTCQB: KHRNF) have signed a binding letter of intent to establish a 50/50 joint venture to introduce a full line of cannabis-infused products to the Latin American market.

Israel is set to pass a law allowing exports of medicinal cannabis, the Finance Ministry said last week, as the county ramps up its attempt to woo more investment and bolster state coffers. The bill passed its third reading in the Israel parliament in December and is now waiting for the cabinet and Prime Minister Benjamin Netanyahu to sign it into law.

 


StaffStaffJanuary 28, 2019
openvape.jpg

6min17230

“When a brand is so successful that its name becomes ubiquitous with the product (Kleenex / facial tissue), it becomes “Slang” for the product,” said Peter Miller, CEO of SLANG Worldwide. “We are aiming high for our branded products, and their names will be slang for their categories.”

Slang will be going public this week on Tuesday on the Canadian Securities Exchange in an IPO with an implied market value of $541 million using the ticker SLNG. The company was previously known as Fire Cannabis Inc.

Slang is a combination of National Concession Group, better known as Organa Brands and Firefly vape pens. Organa is based in Denver, CO and is best known for its product called O.penVAPE. In addition to the O.penVAPE line, Organa makes the Magic Buzz cannabis beverages, District Edible gummies and a line of dab products called Bakked.

The real key to the company though is Organa Labs, the part of the company that houses its custom extraction process. The company earns royalty payments through its ability to turn other company’s cannabis products into premium vape pens.

Organa’s revenue for the nine months ending September 30, 2018, was $11,699,259  versus last year’s $8,820,455 for the same time period. Total operating expenses for those same nine months was $4.3 million in 2018 versus $4.6 million in 2017. The company reported net income in 2018 of $4.7 million for those nine months. The O.penVAPE brand is the highest selling brand in Colorado with over $170 million in retail revenue generated since 2014.

SLANG is paying upwards of $200 million for Organa, but Billy Levy, the President of Slang said he considered it more of a merger than an acquisition. Levy and Miller decided that the licensed producer side of the business wasn’t a place for big growth in the cannabis industry. They believe that brands and distribution will be the key places for growth. Organa was the way for them to accomplish this goal.

Miller and Levy are very experienced when it comes to LP’s. The two co-founded Mettrum Health, which was acquired by Canopy Growth Corp. (CGC)  for $430 million. Levy co-founded Virgin MEGA with Sir Richard Branson which was acquired by Nike (N). Miller is also the CEO of Agripharm.

As they built Mettrum, Miller and Levy said they came across Organa. The two companies developed a mutual respect for each other ’s businesses. Organa went from selling its products in Colorado to its current count of ten states. Mettrum was sold and Slang became the new plan. “Our goal was to acquire great brands and pair that with distribution,” said Levy. Organa became a founding partner in Slang.

In addition to the Organa acquisition, Slang is also acquiring NWT Holdings, which is also known as Firefly. This is a dry material vape pen that competes with PAX. Miller said he was most impressed with Firefly’s co-founder Mark Williams who was a design manager at Apple leading the Mac OS X interface. “His design expertise is truly blue chip,” said Miller. “We want to leverage his expertise of industrial design across the whole portfolio as well.” He said that the next generation of Firefly vape pens is going to occupy a super-premium segment of the market.  Firefly will also be launching its own oil products this year.

The purchase price for Firefly is $16 million,  50% in cash and 50% through the issuance of approximately 7,450,870 shares issued at a deemed price of $1.50 per share. The company reported $3.1 million in revenue for the nine months ending September 30, 2018, but reported a net loss of $440,000 for that time period.

Slang will also have the right of first refusal to license the Green House Brands, which includes the Green House Seed Co. and Strain Hunters. The Green House Seed Company has produced over 60 award-winning cannabis strains and was founded by Arjam Roskam.  Green House also holds an exclusive master license to Strain Hunters, a series of documentaries centered around the quest for preservation of the cannabis plant, and the series has co-developed documentary series alongside HBO, VICE, and National Geographic.

Following the successful completion of the acquisitions, it is expected that Slang will expand the businesses of Organa and Firefly as a branding and marketing company focused on developing reputable brands and quality hardware products.

 


Video StaffVideo StaffSeptember 24, 2018
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3min3410

Cannabis is one of the most popular recreational drugs on the planet, and its potentially
wide-ranging medical uses show promise. Given its low rates of addiction and lack of adverse
health outcomes, cannabis has the potential to replace common pharmaceutical treatments
for chronic pain, seizures, insomnia and other conditions that afflict hundreds of millions of
people worldwide. Likewise, cannabis also has the potential to disrupt the alcohol industry
by serving as a substitute for beverages such as wine, beer, and spirits.

Along with the United States and Canada, several countries have followed suit in relaxing
their cannabis laws and allowing for the use of medical cannabis; which in turn paves the
way for a fully regulated and legal recreational market. Several potentially large international
cannabis markets include Germany, Spain, Australia, Israel, and Colombia.

It is difficult to estimate global cannabis prices because cannabis sales usually occur in the
illicit market. Typically, cannabis prices vary depending upon location. Germany has some of
the lowest cannabis prices in the world. Other countries, such as Israel, are starting to see
higher prices as cannabis begins to move into regulated pharmacies.

Due to complex regulations and various international laws, international cannabis supply
chains are fragmented, with only a handful of companies operating internationally. The
largest of these global companies is Canopy Growth Corp., which has a presence in seven
countries along with the United States and Canada.

International Pricing

Due to its status as an illicit or semi-legal substance in much of the world, there has yet to
be a set international commodity price for cannabis. Even in countries like the U.S., where
recreational cannabis is legal in nine states, the price of cannabis can vary significantly by
state.

In Oregon, for example, extreme competition among cultivators has driven down cannabis
prices to roughly $1 per gram. However, in California, a newly open recreational market,
cannabis prices are between $11 and $14 per gram. According to Cannabis Benchmarks,
which tracks the wholesale pricing of cannabis, the national average price of a pound of high-quality
cannabis is approximately $1,285.

Due to federal legalization, cannabis prices in Canada are slightly more consistent. Most
provincial governments are aiming to price cannabis at CAD$10 per gram. On average,
medical cannabis in Canada costs around CAD$8 per gram. However, as legalization goes
into full effect in Canada, prices may fall within the first several years as competition
increases in the cannabis space and as large-scale cannabis production is actualized.

You can read the full report titled “The Economics of International Cannabis Companies” here.



About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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