Real Scoop! Business Opportunity Report: 1933 Industries
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(CSE: TGIF) (OTCMKTS: TGIFF)
Market Data (as of February 18, 2019)
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Share Price: $0.50 CAD
Market Cap: $158M
52 Week: $0.30-$0.80
Shares Outstanding: 238M Fully Diluted Shares O/S: 316M Sector: Cannabis
All data is reflective of the CSE in CAD
During the last year, the United States cannabis industry recorded incredible growth and this is a trend that is expected to continue for the foreseeable future. Demand for cannabis products continue to increase as new markets open and existing markets mature and this has created significant opportunities for the companies that are levered to it.
We have been laser focused on the United States cannabis opportunity and have targeted companies that are well positioned to capitalize
on this market. During the last year, there has been a significant increase in the number of companies focused on the United States market and it is important that investors focus on companies that represent legitimate opportunities.
One company that we have been monitoring is 1933 Industries (CSE:TGIF) (OTCQX:TGIFF). The company is nearing completion of a major expansion and has attractive leverage to burgeoning cannabis markets such as California, Colorado, and Nevada. We have been closely monitoring 1933 Industries and believe that the market underappreciates this burgeoning opportunity.
1933 Industries has several major catalysts for growth and we are bullish on this opportunity for the following reasons:
1.The company has been nothing short of an execution story and has an attractive operating structure 2.1933 Industries is levered to some of the most exciting cannabis markets in the United States and is
in the early innings of a major growth cycle
3.The company is led by a management team with a proven track record of success and we are favorable on their ability to create value and execute
4.1933 Industries has significantly advanced its fundamental story and is trading at a discount when compared to its peers
5.The company has major catalysts for growth and we think the market underappreciates its potential X
(CSE: TGIF) (OTCMKTS: TGIFF)
1933 Industries: A Multi-Faceted Growth Opportunity
Last year, 1933 Industries experienced strong growth and this was fueled by increasing demand for its cannabis products in Nevada, California and Colorado. We are favorable on the leverage to these burgeoning cannabis markets and expect to see the company build on its success from last year.
1933 Industries is comprised of three subsidiaries which can create value for each other as well as improve the value proposition of the entire company. Its three subsidiaries are focused on the production of cannabis through Alternative Medicine Association (AMA), the production and sale of industrial hemp- based and CBD infused products through Infused MFG., and security and intelligence through Spire Global Strategy.
AMA, Las Vegas' original licensed cultivator of medical cannabis, reported strong sales revenue in 2018. The company's business model is based on servicing existing medical cannabis patients in Nevada as well recreational consumers. The year's highlights include:
All data is reflective of the TSX.V in CAD
•Continued an exclusive licensing agreement with the iconic Hip-Hop Artist Kurupt to produce The Real Kurupts Moon Rocks.
•Signed a licensing deal to produce Denver Dab Company's line of unique products. •Expanded product line to over 100 SKUs such as flower, pre-rolls and concentrates for sale through licensed dispensaries in Nevada, with additional products in the pipeline for 2019.
*Planned construction as of 12/2018
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(CSE: TGIF) (OTCMKTS: TGIFF)
The company owns 91% of Infused MFG., which continues to build out and increase the reach of its suite of branded products. The year's highlights include:
•Established key distribution networks in California, where it now sells its products in over 100 retail shops.
•Sales to over 600 retail locations around the U.S.
•Signed a licensing agreement and partnership with professional skateboarder and Grizzly Griptape LLC. founder Tory Pudwill to promote Canna Hemp X, a CBD-infused recovery cream, targeting the rapidly growing recovery market.
•Signed a licensing agreement with Denver Dab Company to manufacture and distribute Canna Hemp CBD and hemp-based products on an exclusive basis to retail cannabis dispensaries in Colorado. •Expanded its own line of CBD products specific to the pet industry and launched Canna Hemp Paws.
All data is reflective of the TSX.V in CAD
Last year, 1933 Industries entered the emerging cannabis security and intelligence space with the strategic acquisition of Spire Global Strategy, which provides services, on a confidential basis to the cannabis sector including:
•International production, sales, and import/export licensing agreements
•Domestic licensing applications
•Public policy development
•Design and development of large-scale hemp, cannabis, and CBD projects for third parties •Risk and resilience management and investigative due diligence
•Physical security and force protection
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(CSE: TGIF) (OTCMKTS: TGIFF)
A United States Leader in the Making
During the last year, 1933 Industries has significantly advanced its fundamental story and is well positioned to benefit from the continued execution. We expect this trend to continue and have been closely monitoring the United States opportunity. The company has been nothing short of an execution story and has very attractive growth prospects.
On New Year’s Eve, 1933 Industries issued an update that highlighted the company’s progress during its first year of operations. During that year, the company generated $12.6 million in revenue and reported impressive growth on a quarter-over-quarter basis. We are favorable on the growth prospects and expect to see the company build upon its success.
The success that the company has had is a testament to the strength of its management team and this is an
important aspect of the story. The management team has been executing on all cylinders and has
significantly advanced its fundamental story. During the last year, 1933 Industries has executed on several
key initiatives that include: infrastructure build-out and expansion of wholesale capacity to meet increasing
All data is reflective of the TSX.V in CAD
demand, growing and strengthening its product pipeline, increasing sales revenue quarter to quarter, and building a world-class team.
Las Vegas Expansion is Nearing Completion
1933 Industries has been in the middle of a major expansion in Las Vegas and this represents a significant growth opportunity. Earlier this month, the company reported that construction on its new cultivation facility in Las Vegas is nearing completion and awaiting electrical meter installation. The completion of this facility will represent a major milestone of 1933 Industries and will significantly increase production capacity.
The new facility will house AMA’s indoor cannabis cultivation and we are bullish on the growth prospects associated with this project. AMA is one of Nevada's largest wholesalers of cannabis products, including branded flower, wholesale distillate for vape products, and a broad range of concentrates with distribution channels in place throughout Nevada. The new facility will significant increase AMA’s production capacity and this is something that we are closely monitoring.
The purpose-built 67,750 sq. ft. cultivation facility has been developed as a two-story building on 1.39 acres and zoned M-1 (Light Manufacturing) by the Clark County Zoning Department. The structure includes a sophisticated, fully automated irrigation and fertigation system (delivering precise concentrations and ratios of nutrients to each plant), a system of small vegetation/cultivation rooms for better crop management, packaging areas, supporting offices, vault, climate controlled rooms to cater to each phase of plant production, and other work areas. In addition, a benching system will maximize growing space and an advanced data tracking system will allow for 'steering' the crop scientifically, reducing crop time while increasing yield and quality. Once up and running, the newly constructed facility will deliver a substantial 10-fold infrastructure expansion and significantly increase AMA's flower cultivation output.
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(CSE: TGIF) (OTCMKTS: TGIFF)
The company is waiting on the state's power provider for its meter installation, which may take up to several weeks. Once power is installed in the facility, final construction will conclude and state and city fire and health inspections will take place for the issuance of an occupancy permit. The occupancy permit is the final step in the process, allowing cultivation to begin in the new facility.
A Burgeoning Growth Opportunity
Last year, 1933 Industries experienced strong growth and this was fueled by increasing demand for its cannabis products in Nevada, California and Colorado. We are favorable on the leverage to these burgeoning cannabis markets and expect to see the company build on its success from last year.
1933 Industries has a strong retail foothold in Nevada and has a significant presence in cannabis dispensaries in Las Vegas. In California and Colorado, the company has penetrated these markets with its hemp/CBD infused line of wellness products which continue to gain traction and we expect these assets to become more significant growth drivers this year.
All data is reflective of the TSX.V in CAD
During the last year, 1933 has significant advanced its fundamental story and is in the early innings of a major growth cycle. The company plans to expand its reach and has been taking a look at the Canadian cannabis opportunity. If 1933 Industries is able to establish a foothold in the Canadian market, it could open distribution channels in the European markets.
We are favorable on the company’s leverage to the United States cannabis market and its growth prospects going forward. 1933 Industries represents a leading opportunity and is one of the best positioned for growth. Last year, we visited the cannabis markets where 1933 Industries had a presence and were very impressed with what we saw.
Secures Strategic Partner to Capitalize on the Colorado Market
In October 2018, Infused MFG., started selling its products in Colorado and this was in conjunction with a previously announced licensing agreement with Denver Dab Co. (DDC) on June 5, 2018. This represented a significant development for the company and we are favorable on the leverage to the Colorado cannabis market.
Under the terms of the agreement, DDC has begun manufacturing and distributing Infused's Canna Hemp CBD and hemp-based products on an exclusive basis to retail cannabis dispensaries in Colorado. DDC's high quality concentrates and pure cannabis oils will initially infuse Canna Hemp's CBD Body Lotions, lip balms and CBD Relief Cream, with more products added in the future.
At the time of this announcement, 1933 Industries also said that its subsidiary, AMA, has entered into a licensing agreement with DDC for the exclusive rights to produce, manufacture, market, and sell DDC's Licensed Products in Nevada. The DDC Agreement is effective for a twelve month period with a renewal clause for an additional twelve month term.
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(CSE: TGIF) (OTCMKTS: TGIFF)
We are favorable on this relationship and will monitor how it adds value to 1933 Industries. We expect this relationship to quickly prove to be accretive and are favorable on the leverage to the Colorado market.
Led by a Management Team with a Proven Track Record
When it comes to investing in cannabis companies, it is very important to take a look at the company’s management team. We are looking for companies that are led by a management team that has a proven track record of success and that acts in the best interests of its shareholders.
1933 Industries is led by a management team that has a proven track record of success in the cannabis industry and this is an important aspect of the story. Last month, we met with 1933 Industries CEO Braydon Sutton and are very impressed with the team that he has in place. Mr. Sutton has done a spectacular job with 1933 Industries and has made strategic additions to the management team.
During the last few months, 1933 Industries has made several key additions to the management team and we have highlighted these below:
All data is reflective of the TSX.V in CAD
•In December, the company appointed Ryan Maarschalk as Chief Financial Officer. Maarschalk is a Chartered Professional Accountant (CPA) and will help the company with its expansion plans. With a strong financial background, he brings business valuation, mergers & acquisitions and public company experience.
•In December, Josh Taylor joined the company’s Business Development Division. He was tasked with identifying and evaluating licensing and acquisition opportunities, establishing distribution networks for the company's branded suite of products, and opening new markets for expansion in North America. His experience as an accomplished sales professional and successful entrepreneur in the legal cannabis space with several years' experience in business development within the consumer packaged goods and pharmaceutical industries, ideally position him to take on this new role.
We are favorable on the management team’s ability to create value and its continued execution. The company has been laser focused on expansion and has significant growth prospects. The management team has been focused on some of the most significant cannabis markets in the United States and this is an opportunity we are closely monitoring.
First Quarter Earnings Show Strong Growth
In late December, 1933 Industries released first quarter financial results for the period that ended on October 31, 2018, and announced that it reached record quarterly sales revenue during the period.
During the quarter, the company generated more than $4.6 million in revenue, which represents a 46% increase over same quarter last year and an 18% increase over the prior quarter. Total assets increased to $56,486,526, up from $41,339,616 in the previous quarter and we are favorable on this growth.
With more than $15 million in cash on hand, 1933 Industries is well capitalized and well positioned to
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(CSE: TGIF) (OTCMKTS: TGIFF)
execute on its growth initiatives. We are bullish on the growth prospects going forward and expect to see fundamentals become significantly stronger after the company completes its expansion in Las Vegas.
During the quarter, AMA and Infused MFG were the primary growth drivers and we will monitor how these subsidiaries grow from here. Spire Global Strategy generated less than $100,000 in revenue during the quarter and we expect to see significant revenue growth over the coming months.
1933 has significant catalysts for growth and we are favorable on the continued execution. Over the next few quarters, we expect to see the company report strong growth and will monitor how its expansion goes. 1933 Industries is led by a management team with a proven track record of success and we are favorable on their ability to create value.
A Company to be Watching
Although 1933 Industries has significantly advanced its fundamental story, the shares have come well off its 2018 highs. We believe that the market under appreciates this growth opportunity and this is something
All data is reflective of the TSX.V in CAD
we are watching closely.
The shares are trading at less than 2x total assets and we believe this is one of the most attractively valued companies. 1933 Industries has been executing on expansion on the West Coast of the United States and we are bullish on the growth prospects as a result of this.
1933 Industries has attractive leverage to some of the most exciting cannabis markets in the United States and this is a company to watch. To stay up-to-date with 1933 Industries, please email us at support@technical420.com.
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(CSE: TGIF) (OTCMKTS: TGIFF)
StoneBridge Disclosures
Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report.
This report was produced and authored by StoneBridge Partners LLC. Technical420 is not the owner or author of this report. No party shall copy or distribute this report without the prior authorization of StoneBridge Partners LLC. Technical420 does not and cannot guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analysis and opinions contained in this report are provided for informational purposes only and is not intended, in any manner, as investment advice. Technical420 has no current position or immediate plan to initiate a position within 1933 Industries in the next 72 hours in any of the stocks mentioned in this report. You can review our complete disclosures on www.technical420.com. StoneBridge Partners LLC are a compensated affiliate of 1933 Industries. and are paid $7,500 per month to disseminate information on behalf of the company.
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