In October 2016, an employee at a cannabis dispensary phoned Vancouver Police to report that the store he was working at 
was just violentlyrobbed by four people at gunpoint. This wasn’t the first, or last time armed thieves held up a cannabis dispensary in the city and in every case, the owners knew they would never see those products again.
Thievery is a bane to the burgeoning cannabis retail industry as it breaks into legitimacy from under its criminal past. Those ties keep coming back, yet there are few specialists capable of effectively protecting this asset, despite the massive appetite for it. In fact, just one Company has assessed the industry’s needs from seed-to-sale and has built a revenue-generating enterprise.
(Security footage released by Vancouver Police Dept.)
3 Sixty Risk Solutions Ltd. (CSE:SAFE, Forum) operating through its wholly-owned subsidiary, 3 Sixty Secure Corp., is a Canadian security service provider distinguished by its focus on the cannabis sector, providing consulting services and transporting of roughly $250 million worth of product every month for its more than 500 customers and over 60 top shelf cannabis producers. Its client base includes some of the industry’s largest LPs with multibillion dollar market caps, notably Canopy Growth Corp.(TSX:WEED), Tilray Inc. (NASDAQ: TLRY) and Aphria Inc. (TSE:APHA).
Three key reasons investors should stop and assess 3 Sixty:
- The demand is real
- They’re the only players in the field
- Already generating revenue
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This full-service Company’s story began when its Founder and Chief Executive Officer, Thomas Gerstenecker was working at the United Nations, where his experiences hiring outsourced private sector security companies was less than mixed. “Nine times out of 10 I was overpromised, overcharged and underwhelmed with what I was able to hire across the globe,” he told Stockhouse Editorial. “I felt that I could do a better job.”
He left a very comfortable position with the U.N. and moved back to Canada to launch 3 Sixty with no intention of entering the cannabis space, but while doing an assessment on a prospective license applicants’ facility in 2014, he asked the applicant how they planned to move their product from Point A to Point B. They didn’t even think about that and it was here where the demand for such a service became clear.
“I just dove in to researching the best model that we felt could be utilized in the cannabis industry. That’s where the significant service lineup of 3 Sixty’s cannabis component came from. With the recenttransaction of David Hyde and Associates, it just seemed like a natural fit. Synergies within,” he said. “Where we are now, the only cannabis seed-to-sale security services firm that offers all of the things that we offer. The market out there, the competition, it’s a fragmented market where you will have industry consultants doing some one-off jobs, you will have the secure transport piece, you will have people that can monitor the facility, integrate systems into the facility."
In November 2018; 3 Sixty acquired Petro Vista Energy Corp. to satisfy several means, primarily to execute a Reverse Take Over with the intent on becoming a public company. First, access to further capital while defining its valuation, giving extra leverage when looking at mergers and acquisitions down the line. This series of amalgamations under the Company is part of its strategy to advance its consulting piece, which is the catalyst for its service line. For growers to get their license, they need security integration: CCTV cameras, etc. installed, which 3 Sixty would do, potentially having its own security guards in place as well. Once they are licensed, bringing in first shipment of genetics and moving dried product afterwards. It is a complete security package. For that, doing a reverse takeover through this shell company was a natural move.
With a massive client base already secured thanks to this transaction, CEO Gerstenecker predicts the competition will be piecemeal in establishing its business. Many security companies will satisfy one criterion to protecting a licensed producer’s assets, while also being a cheaper option, but to that end, 3 Sixty doesn’t typically get called to move just five kilos of product, that would probably be moved in a Purolator-type truck. At this point, there is no requirement to transportation of cannabis product, aside from producers to move cannabis in a safe and secure manner, but with this comes the risk of “you get what you pay for”.
Another crucial detail of interest to investors is that 3 Sixty is already generating revenue. The Company’s immediate working goal is to solidify its position in Canada, locking in a few remaining portions of geographic distribution. Breaking down the objective to look at Q1 2019, 3 Sixty is assessing the David Hyde and Associates client base intending to bring those cannabis clients into the 3 Sixty model where it can provide them with integration, monitoring and transport services. This client base of 500 will be boosted to more than 550 with the hiring of Jeff Hannah (formerly Jeff Hannah and Associates) this quarter, which will drive revenue even further in Q2 onward. More on this later.
Beyond this critical objective, the Company is working to extend its operation into the United States within the next several weeks. There is an unparalleled depth of opportunity within the American cannabis market and the 3 Sixty model working in Canada is a tested blueprint to duplicate into the U.S. to give those clients seed-to-sale security, where like Canada, there is currently no company that provides such a complete suite of cannabis-specific services, which in-turn, yields cascading benefits for 3 Sixty. While there is a negative connotation for cannabis growing in certain parts of the world and even in certain States, cannabis is becoming legal for medicinal and recreational purposes in more and more places, which is why the Company stated engaging U.S. operations early on a consulting basis. The relationship from there inevitably grows to include guarding, transport and monitoring components.
Announcements are forthcoming involving a major multi-year contract that the Company intends to close with a leading cannabis producer in the U.S. Another announcement is anticipated with a leading cannabis consulting firm which was recently nominated as one of the top U.S., ancillary cannabis security companies which operates in 22 states with more than 100 clients. The intent is to open business in the U.S. with a bang and have immediate relationships and contracts with relevant companies. This is why it wants to have this acquisition flying the 3 Sixty flag as the Company announces its planned OTCQX listing. It has already tapped the American-equivalent to David Hyde & Associates to fulfill its requirements in the country.
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President David Hyde:
Over the past five years, David Hyde and his team of experts have become the most successful cannabis advisory firm in Canada, with more than 350 commercial cannabis licensed applications to their name, including well over half of the current licensed producers of cannabis.
Prior to their time as colleagues, CEO Gerstenecker had crossed path with Mr. Hyde regularly over the years. They shared the experience of working the security industry and Mr. Hyde has spent 30 years as the head of security for commercial real estate giant Cadillac Fairview Corp., which meant managing a $30 million budget and hundreds of staff. He brings executive-level security leadership and is one of Canada’s leading security experts who frequently appears on TV and radio as an interview guest and panelist.
On top of being a security expert, David Hyde has made a name for himself in the cannabis space since 2013 and is one of the most knowledge people when it comes to Health Canada’s security relations and requirements within Canada. It is a crucial resource to have, given his experience at the national level with guarding and consulting. “We have similar views and similar mindset, I thought he was a perfect fit as President,” CEO Gerstenecker added.
Chief Commercial Officer Neil Weaver:
Formerly the CEO of TCSS, Neil Weaver has a longstanding background in security. He started in law enforcement, then amassed extensive private sector security experience. “This was something that I wanted, given that a lot of 3 Sixty leadership have extensive military backgrounds, I wanted a private sector expert on board,” Thomas Gerstenecker noted. With his experience as Security Director for electricity generator Ontario Power Generation, he was also Vice President of Strategic Accounts for GardaWorld.
Consulting Services Director Jeff Hannah:
Jeff Hannah was a big hire for the Company. He used to work as David Hyde’s second-in-command, then branched out on his own in the security field. 3 Sixty, in its move to amalgamate, intended to find a replacement for David Hyde at the operational day-to-day level to move him into his executive role and needed someone with Jeff Hannah’s experience within cannabis security to replace him. He also brings his roughly 60 clients to the table with him and his revenue base as well as his consulting time. An added bonus was bringing a main competitor under the Company’s umbrella, further solidifying them as leaders in this space.
There is a great deal more to 3 Sixty’s business beyond defense from outside threats. A major issue with the industry is insider theft, even within security companies. 3 Sixty foresaw this, and it is why its onboarding is very extensive. “Before we hire someone on board, put them in body armor, put a gun on them and have them move $25 million in product, you want to be sure who you are hiring,” Gerstenecker explained.
3 Sixty is a solid Company that has established its business, generating revenue at the right time. The cannabis sector is emerging into legitimacy and needs proven security. Now its immediate horizon sees expanse into the United States, followed by international growth.
3SixtySecure.com
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.