With growing sales and opportunities presented in Nevada’s legal cannabis market (from tourism to generous patient reciprocity laws), how will Friday Night Inc. keep ahead of its neighbouring peers while expanding its business to Canada and abroad?
To answer these questions, Stockhouse caught up with TGIF President and CEO Brayden Sutton.
Friday Night has a 91% stake in Alternative Medicine Association (AMA), which holds cultivation and production licenses, can you tell us a bit about this business?
AMA has been a staple of the Las Vegas market for years now and continues to produce some of the best quality flower and branded extracted products. AMA employs some of the most talented and passionate people in the space and we continue to produce world-class extracts for a growing list of white-label clients that recognize AMA as being best-of-breed in more ways than one. The team is made up of about 70 members already and we could not be more excited to move into our new building and continue this incredible journey during this period of high growth and excitement.
TGIF recently purchased a 12,160 sq. ft. production building in Las Vegas for $2.2 million (USD) that will house a separate hemp processing facility, or CBD Lab inside, which will be utilized to produce full spectrum oils, distillates and isolates. Can you tell us about this facility and how having the lab under your control can streamline your operations?
We could not be more excited or optimistic about this new vertical of our business. We have sourced local hemp biomass that we will be extracting by the ton every month into various forms of isolate which will be sold in oil form as well as used for our Canna Hemp branded products.
Friday Night reported total revenues for the first nine months $8.7 million and gross profits of $4.1 million on strong and growing sales from its US operations. How far to do you see this growing as the Company expands its reach?
I think we are just getting started. Our Company is only one year old and I look forward to a relative sales increase as we move both of our Vegas assets to their new locations, as well as the addition of the CBD extraction and of course ambitions to be in a couple new markets.
Through TGIF’s acquisition of Infused MFG opens the Company to other revenue streams beyond growing. What is the expectation for the CBD market?
Numbers being thrown around for CBD and hemp products are getting extremely high. I have always pointed out that THC only applies to about 15-20% of the population, if that. CBD on the other hand, could benefit 100% of the population. CBD is a far larger market than cannabis, with far more verticals and exciting new areas for CBD to be introduced.
Can you give investors a rundown of your third arm of operation: Spire Global Strategy?
Spire is a consulting firm made up of mostly ex-law enforcement and military professionals. From compliance, to logistics, to IT, to due diligence; they do it all. Spire is currently engaged in conversations with several nations regarding their rollout of legal cannabis and is working with two Canadian Provinces as they roll-out retail as well. Spire gives us international exposure; as well as meaningful exposure to Canada, minus the risk of cultivation and it more importantly gives us unparalleled access to the hard-to-find data that is so important when navigating in this sector.
The Horizons Emerging Marijuana Growers Index ETF (HMJR:NEO ) portfolio was recently rebalanced to include TGIF, what does this do for your business?
We’re honoured to be a part of it and we will do our part to continue to deliver to all shareholders. Being included in this further validates our business model as well as our attractive valuation and liquid stock.
With ample cash reserves, where is TGIF looking for potential future acquisitions?
We are at any point in time evaluating up to 20 different opportunities in the space. Every day there is a new company looking for a public entity to gobble them up or fund them so right now there is no shortage and that makes one have to be that much more picky. When something checks every box for us, we act immediately, but that is few and far between in this fragmented new sector.
What are the Company’s plans for expanse to Canada and internationally?
Spire is very active in Canada and abroad. We are in talks with international brands currently and we hope to one day soon see some of our brands, including Canna Hemp in particular, outside of the USA. Canna Hemp Canada also continues to be a top priority for our Team.
Nevada’s market is expected to continue its boom; Arcview Research is projecting an annual compound growth rate of 51% for sales in the state, reaching $629 million (USD) by 2020. Where do you see TGIF fitting into this picture in two years’ time?
I’d like to hope that we will be taking full advantage of it by 2020 with a much larger cultivation facility, ample production space and a full lab. Right now there are not many individual licenses in the state to produce so we will continue to take advantage of that and take steps to ensure that we stay relevant as more entrants come into the Nevada market.
www.fridaynightinc.com
FULL Disclosure: Friday Night Inc. is a paid client of Stockhouse Publishing.