Let’s do this: The Laguna Blends (LAG.C) story

If I were to rate Laguna Blends on a 1-to-10 scale, based on how happy I am that I got in early on the thing, I’d be offending a site sponsor and probably making them sad. Let’s be clear, this thing has sucked to this point.

And that’s madness, because the product, and I’ve said this loudly and often, is really quite incredible. The Caffe protein-coffee SKU is my favourite coffee, bar none. I’d stack it next to anything you get in Vancouver’s top-of-the-line Caffe Artigiano chain, and for sure it’s better than anything you’d find in a Starbucks, though that’s admittedly faint praise.

And the products are formulated by Naturally Splendid, which has for a long time been a favourite of mine and recently proved their worth with a big fat ongoing sale to South Korea that many see as a company maker.

So why has it sucked? Well, let’s go back a bit to when the story first rolled out.

Referred to the company by people who have seldom set me wrong previously, I met with CEO Stuart Gray a few times and heard the pitch. Gray has a way about him that’s overtly friendly, perhaps a little heavy on the sales side, but he’s committed to the cause and knows his product and company well. He doesn’t get offended when you point out he’s a Jim Gaffigan lookalike, though he sees it coming as soon as you get the words “hot pockets” in the back of your brain.

He’d surrounded himself with people who I had never heard of, but who have genuine pedigrees in the multi-level (or affiliate) marketing world, but we’ll get to that in a bit.

And then there was the 3D affiliate community system (read: Second Life for MLM guys) that allows sellers of the product to virtually meet each other, share information, documentation, training and the like, or just shoot the shit. I’ll admit, while it’s pretty cool, I wasn’t sure if it was necessary, but I nodded and went along with it.

Either way, the product sold me. I’ve drunk enough crappy Tim Hortons gut water and and wanted to pull my eyeballs out of their sockets as girlfriends tapped their Keurig and added to the Great Pacific Garbage Gyre, and I’ve spent days of my life making protein smoothies and washing out blenders while also making bad coffee, that the idea of a great tasting protein coffee made me happy to pile on. So I jumped on the private placement. Boy howdy, did I.

And then it went public. And then it started to topple. And then it fucking imploded. And then Gray rolled it back.

“We have institutional money that’s into this and we need to keep the price up so they can come in, so we’re going to roll it,” Gray said. “We’ll get it back over $0.25.”

And then, when he did, people bailed and it dropped right back down to where he’d started.

This was not fun times for me. As a consultant to the company – and an investor to a much heavier standard than usual – this was the worst case scenario. A rollback while your stock is in a four-month hold? That’s the worst. I got crushed. I got so badly beaten up that it just wasn’t even worth bailing. I had to sit and hope.

Meanwhile, as the company waited for product to arrive so it could recruit a sales force, the CEO was lending money to the company and buying stock, trying to keep it level.

And that’s where the story gets better. Because, even though the road to sales was much longer than initially planned, and even though I’m holding less shares for the same low price, and even though I’d need to see the stock rocket to get even back to something close to even, and even if the market sees news releases saying the CEO’s wife is loaning the company money, and duly engages in a sell-off, the company is right now doing exactly what they said they’d do.

Time for some videos. Here’s Caffe:

Here’s Protein 369, using a bunch of info from the Naturally Splendid HempOmega studies:

Not bad. Here’s what the affiliate sellers are seeing:

Next, the company started buying time on B-TV:

On the news release front, Laguna quickly signed up 100+ affiliates, then a week later had more than doubled that number.

So let’s talk about the affiliate marketing side, because that’s a real sticking point for a lot of investors who think “Amway!” or “pyramid scheme!” or “these are words I identify but I don’t understand the order you’re putting them in!”

MLM is a system whereby you sign up to become a seller of the product, and when you find someone who wants to buy, you send the info to the company in question, which fulfills the order and cuts you a nice wedge for bringing them business. If you bring a lot of business, your wedge expands. And if you sign up new sellers, you get a piece of what they sell.

This is NOT a pyramid scheme. A pyramid scheme REQUIRES you to find more members in order to make money, which quickly gets to a point where the bottom is so bloated, it’s impossible to make any money.

MLM is about expanding your sales network, and the best people at that are making millions of dollars annually by selling Shaklee, Avon, Herbalife, Scentsy, Tupperware, Isagenix, Nikken, Oriflame, Melaleuca and more. Oh, and the companies I just named are doing billions in revenues.

BILLIONS.

So let’s talk about Laguna’s MLM engine. The President of the company is Stuart Kawasaki, the guy you saw on some of those videos, was a Managing Director and Manager, International Expansion at Nikken. which has done $9 billion in global revenues. Kawasaki specializes in setting up Asian sales networks, though he’s built networks on four continents and in the Caribbean, Israel, Australia, Canada and more. His personal networks in this business are not something he’d quantify for me, but as I moved from hundreds to thousands to tens of thousands, he remained unmoved.

“Hundreds of thousands?” I asked.

“No,” he replied. “Not yet.”

Dennis Compo is Laguna’s VP of marketing, and he’s another big network sales name, having dominated the field for over 25 years. He spent time with Ganolife before Laguna, selling healthy coffee products… sector knowledge, people.

Let’s be honest: I don’t know enough about the MLM space to know whether these guys can get Laguna to a billion in revenues or not. But I don’t need a billion just yet – I’d settle for getting the market cap up over $10m, from the current $2.6m.

I’m playing catch up on this one, but the beauty of the opportunity for you is, you missed the pre-sales stock price slide. You weren’t around to see the impatient, the short, the bored turn their Laguna stock into cheap paper to be acquired by insiders who are infinitely patient, long and excited.

 

That whole ‘CEO’s wife lending the company money’ thing? To coin a long-time IT phrase, that’s not a bug -that’s a feature.

When Laguna needed a little ramp-up cash, they could have financed at a ridiculously low price, but they chose instead to roll back. When the price got ridiculous again, a financing would have been catastrophic – so the CEO is literally putting his money where his mouth is, and borrowing it from the lady wife.

Let’s face it, nobody is more invested in the success of this company than Stuart Gray. He’s invested to the hilt. He’s invested his marriage into this thing.

But why not? With the stock where it is, what a bargain to be had! I’d just be averaging down if I bought more, while he’s eating paper for lunch, snacking on all your cheap throwaway stock because you’re bored.

The opportunity right now is for you, dear reader, to get in at my expense by buying at the current $0.14 range and lowering your risk considerably, compared to mine. Usually, Joe Public gets screwed by financings and background investors and warrants. This time? it’s you who is able to do the screwing.

I’m not going to tell you Laguna Blends is moving up, now or at any point in the next few weeks. But I’ve been on the phone barking at these guys again and again and again, and the mood at Laguna Central is one of completion of stage one. Product is going out. Sales are coming in. It’ll be a slow start, but the start has most definitely happened.

I will be buying some. The coffee, that is. Already got the stock.

So much, SO MUCH stock..