The craft cannabis industry evolved in 2021 to become a major disruptor to big-box cannabis. Yet, micro-cultivators still face hurdles to get their product to market as demand from younger consumers increases. Solutions are needed. One company at the forefront of this change is B.C.-based
Maven Brands Inc. (
CSE: MJ,
OTC: TRLFF,
Forum).
The company has transformed its business to enter the craft cannabis processing sector. It is running a
concurrent crowdfunding campaign and private placement that closes on December 6th to help deliver on its plans. Vice-President of Strategic Growth, Andrew Gordon, sat down with Stockhouse to discuss the company's plans and all things cannabis.
(Click to watch video)
TRANSCRIPT BELOW:
SH: So Andrew, what's behind the consumer drive for craft cannabis?
AG: We see powerful trends emerging. At Maven, we recognize the future is craft, and so we're preparing to launch a processing model that will bring the best in craft to market. And that all starts with micro-cultivators. We know consumers prefer craft cannabis, small-batch products grown by micro-cultivators that is hand dried and hand-trimmed, and provides a better brand experience with a stronger, more differentiated narrative for consumers. And many consumers, unfortunately, are disappointed with the results of what's being seen in the retail markets because, you know, it's often flooded with uninspiring, overpriced, and often irradiated cannabis. And, you know, the emerging data is helping to paint a clear picture of preference. A new report from Deloitte that pulls from the Hifyre platform reveals that about 86% of Gen Z and young millennials are willing to buy premium products. They will also pay more for locally sourced craft products, so micro-cultivators are now one of the fastest-growing segments in the federal licensing system. And so, we are excellently positioned to capitalize on these emerging consumer preferences.
SH: Speaking to that, Maven plans to serve micro-cultivators, which is now one of the fastest-growing segments in the federal licensing system (which you just mentioned). How does Maven plan to achieve this?
AG: Well, we're building for the future of the craft industry. And we're one of the only processors in B.C. with a specialized team, a purpose-built facility, and a profit-share program that we think will be necessary to support this fast-growing segment of the market. Our partner-focused program unleashes the full potential of micro-cultivators here in Canada and particularly in B.C. It is designed to provide an appealing, transparent, and most importantly, sustainable path to market for small-scale producers. This underserved market represents a massive business opportunity, and we've undergone a complete transformation to serve the craft cannabis processing sector.
SH: What has Maven accomplished in 2021 to make it stand out from its competitors in this space?
AG: It has been an extremely busy year, and we are very excited to get into 2022. You know, we've worked tirelessly to complete a number of key corporate initiatives. And it all starts with operational excellence. We did a successful test run of our 19,500 square foot facility and produced a product that exceeded quality expectations for potency and purity. Plus, we had a successful Health Canada inspection that allowed us to receive our dried flower sales amendment in just three months, which permits access to retailers and distributors nationwide. The second thing we've done well is secured strong strategic partnerships, especially around supply, remediation, and distribution. We've also recruited a team with broad expertise in retail, operations, and industry regulations. That all ties in lastly to diversifying our business units to create value and stability for our shareholders. We've renewed our mortgage agreements and secured additional working capital to advance our Monashee Gateway Business Park which is 40 acres of property development. It's a project that adds tremendous value for shareholders via our real estate assets, which are worth more than double our current market cap. So, with the fundamentals of our business plan in place, Maven's ready to launch a very innovative craft processing program, and ultimately, we're on the path towards profitability.
SH: Can you talk more about Mavens 40-acre business park and what the benefits are for micro-cultivators and investors?
AG: Absolutely. I would love to. This is one of my favorite places on earth to visit. The village of Lumby has been tremendously supportive, you know, the whole way through our journey. We have an $8 million purpose-built EU-GMP-designed facility. We intend to leverage our licenses - we're a standard processor and cultivator - and our experienced team to collaborate with licensed micro-cultivators and bring their quality craft cannabis to the regulated market. Our facility is located within the village of Lumby, nestled at the foot of the Monashee Mountains on the traditional territory of the Syilx people of the Okanagan Nation. We're currently marketing about six lots as part of the 7.8-acre phase one subdivision plan with the remaining 32 acres in the park to be developed as part of our phase two, which will be breaking ground in Q3 of 2022. These near-term lot sales significantly strengthen our financial position as we prepare to launch our path-to-market services program for micro-cultivators.
SH: So 2021 is almost over when it comes to revenue and profitability. What are the key markers investors should be looking out for going into 2022?
AG: There has been a lot of overpromising and under delivering a lot of bluster and I'm a firm believer in people's strategy and execution, so our management and ops team are key. We focused on building a team authentic to the industry and with a passion for the plant and the craft community. The next key metric to monitor as an investor is a simple model. We've put together a very straightforward processing model, a strong distribution strategy that allows us to create sustainable gross profit margins and operating margins. And we're managing our inputs and building partnerships with craft producers by sharing the costs and splitting the profits. And that all leads to execution. And as I've shared, we've demonstrated operational excellence over the past year with a successful test run of our craft processing facility.
We got our dried flower sales amendment in just three months, so now we can sell nationwide. So
along with securing key personnel and strategic partnerships and diversifying our business units to create value and stability for shareholders, we're well-positioned, and again, with our land assets appraised at more than double our market cap. We have a lot of potentialities there to convert on that, manage our debt, create some cash flow, and allow all the investor dollars to fuel revenue initiatives. So, with those fundamentals of our business plan in place, we're ready to launch, and it's ultimately straightforward to the path of profitability here. Investors can learn more by visiting our website at
invest.mavenbrands.ca.
SH: That's perfect. There's lots to look forward to with the company, and I'm sure we'll be in touch. Is there anything else that I've missed that you'd like to cover today?
AG: I'm grateful for your time and the opportunity to kind of dive into what we're doing here at Maven. Again, we do have that private placement at 18 cents. That will be closing on December 6th. We're raising $1.5 million to operationalize. There's a concurrent crowdfunding component that's part of that. It's democratizing access for investors and creating a grassroots initiative for the craft industry to come to the table and invest in itself. So, if any investors out there are tired of that big box cannabis, and they see the value in the craft cannabis sector, this investment opportunity is a chance to drive that value forward.
SH: It's great catching up with you today. I love hearing about your company. I look forward to speaking with you again.
AG: I look forward to it as well. Have a great day. Thanks.
For more information, please visit
invest.mavenbrands.ca
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.