One of the most exciting themes of the US cannabis industry has been the emergence of brands and this is a trend that we have been excited about.
Creating a leading brand is not easy and it takes years of hard work, research, and sometimes a little luck. Over the next few years, we expect to see several cannabis brands become household names and this represents a massive opportunity for both companies and investors.
Last month, we traveled to Las Vegas for a site visit at 1933 Industries (TGIF.CN) (TGIFF) and were beyond impressed with what the team has been able to accomplish when it comes to creating a leading cannabidiol (CBD) brand.
Canna Hemp is a Brand to Believe in
During the last two years, we have sampled countless CBD products from a variety of companies to better understand the market. Although companies like Charlotte’s Web and CV Sciences have the greatest brand awareness, we were not impressed with the products. We found the creams to be ineffective and were not impressed with the consistency of the products.
With that being said, we sampled several Canna Hemp products following our site visit and were blown away with the effectiveness of the products. The company has a diverse product line for specific indications (i.e. sleep, energy, focus, relief) and also has an amazing line of products for pets.
Following our site visit, I arrived home and noticed that my puppy was sick and would not eat. A few hours after I gave my puppy a Canna Hemp CBD Pet Chew, she was no longer vomiting, she was eating, and she was back to her normal self. This experience tuned me into a firm believer when it comes to the Canna Hemp line and will make sure to incorporate these chews into my puppy’s regimen on a going forward basis.
A Management Team that has Been Ahead of the Curve
1933 Industries is led by a management team that has been ahead of the curve with the CBD opportunity and this is a testament to the strength of the team. The CBD opportunity is massive and the growth prospects are very attractive as regulations pertaining to hemp and CBD are quickly easing globally.
In late 2018, The U.S Government signed off on the Farm Bill, which legalized industrial hemp as well as interstate commerce for hemp and hemp-derived CBD. The legislation effectively removes CBD derived from hemp from the DEA’s list of controlled substances by changing how cannabis is defined in the Controlled Substances Act. The passing of this legislation was a major catalyst for companies like 1933 Industries and expect to see the US become a major market for the company.
Several European countries have already legalized hemp and this has become a global trend. Last year, the World Health Organization recommended that CBD be de-scheduled across 194 nations. These regulatory changes could pave the way for CBD to become a legal natural supplement globally and this would be a major catalyst for 1933 Industries.
During the last year, 1933 Industries has been quietly building a platform to capitalize on the CBD opportunity and has a portfolio of premium products that are gaining traction across the country. The company is an early mover in the CBD market and this is just starting to pay off. If you look at the company’s market capitalization, the shares are trading at less than 1x 2020 projected revenues and we find this to be significant.
Working Tirelessly on the Creation of a National CBD Brand
One of the most exciting aspects of 1933 Industries is Infused MFG., which is a wholly-owned subsidiary. Earlier this year, the company acquired the remaining ownership interests and we believe that the market does not appreciate the significance of this move. Last week, 1933 Industries reported third quarter financial results that showed impressive growth and showed that Infused accounted for 61% of the company’s total revenue.
When compared to the prior quarter, Infused recorded 18% growth and we expect this number to significantly increase when the company moves into a facility that is 10x larger than the existing facility. One of the reasons we expect Infused to report strong growth on a going-forward basis is due the way it has continued to expand its reach across the US by building its own distribution network into 46 states and by selling its Canna Hemp wellness line in more than 800 retail outlets.
During the last quarter, the number of retail stores that are selling Infused products jumped from 600 to 800, with the majority of these stores being located in California, Nevada, Arizona, and Colorado. The growth in the number of retail outlets is a major development and demonstrates the company’s ability to enter and expand its CBD-based offerings in new markets.
An Opportunity that is Flying Under the Radar
Another exciting aspect of the 1933 Industries opportunity is related to how it continues to invest in product development as it transforms into a brand-centric company. The company’s proprietary product line has been gaining strength from its success in Nevada and expanding across the nation and this is a trend that we are bullish on.
Last week, the company released its third quarter financial results and we believe this has created a fantastic opportunity to take a look at this company. 1933 Industries is trading at a discount when compared to its peers and we are favorable on the risk-reward profile. This is a company that has massive visible growth prospects and is an opportunity to have on your radar.
To learn more about how 1933 Industries is positioned to be a leading CBD brand, please contact email@example.com.
Pursuant to an agreement between StoneBridge Partners LLC and 1933 Industries we have been hired for a period of 180 days beginning July 15, 2019 and ending January 15, 2020 to publicly disseminate information about (TGIF) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month for a period of 6 months. We own zero shares of (TGIF), which we purchased in the open market. We plan to sell the “ZERO” shares of (TGIF) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (TGIF) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
Published at Mon, 15 Jul 2019 11:28:17 +0000