Every so often, the business world shifts and a new industry emerges where small, high quality companies quickly become the next big thing by spotting and catching the wave before anyone else. They go from zero to hero not because they’re first into the breach (hey MySpace), but because they’re the first to spot where the real opportunities will lie (what’s up, Facebook).
Two years ago, the cannabis industry emerged as a brave new world, and companies fought for the right to grow cannabis in the US and Canada. There are plenty of those companies around, and they have nice inflated valuations because growing weed is easy to comprehend.
But, today, the cannabis world has progressed to a place where marijuana is now increasingly seen as a commoditized product, and the real value is being found in turning the stuff into value-added retail lines.
In essence, do you want to be growing the coffee beans, or do you want to own Starbucks?
We’ve seen this in the relatively new ‘energy drinks’ market, with brands such as Red Bull, Rockstar, and Monster Energy having established themselves as significant and profitable brands that are now worth multi-billion dollar valuations, just a handful of years after they started as a niche retail play.
Frankly, I believe that what happened with energy drinks, which quickly gained acceptance only a few years after coming to market but that serve zero health benefit, will quickly happen in the marijuana value add business as well, as its social acceptance in the world is quickly reaching critical mass.
Most people don’t want to smoke marijuana. They’d like a pill, or a cookie, or a beverage – something they can consume quickly to get the health benefits without stinking up a house. They’d like a few drops of oil on a cracker, or a milk with CBD benefits, or a bread that will help them sleep better. Soon, marijuana won’t be an industry, but rather a product that is used and acquired by other, more established industries.
At this early stage, many of the edible products out there are being produced ‘underground’, by mom and pop businesses, often operating from garages and without any modern equipment to streamline manufacturing of their products. A handful of products have pushed through the smoke however, and established themselves as a quality value-added brand.
In California, which is the largest marijuana market by a long way, and which votes on November 8 to legalize recreational marijuana in the world’s fifth largest economy, the need for reliable brands in the cannabis industry is about to grow exponentially, and a rush of capital will flood into the market to fund products and entrepreneurs that threaten to dominate the next format the industry will take.
I believe that KushTownUSA is one such company.
To build a truly national brand, the entrepreneur must have the right product line to satisfy consumer demand, and the product line must be marketed in a professional manner and leave a lasting impression with its consumer. KushtownUSA has done this with over 20 SKUs of liquid edibles, from THC-added sodas to hot sauces to marinades. These are products that, now, sit in dispensaries across California but, as of tomorrow, could be made available in gas stations and supermarkets and drug stores and, who can say, maybe even in vending machines.
I have stated in public speaking events since 2014 that, after prohibition lifted, the people who made the serious money weren’t the ones growing barley and wheat and hops, but the ones who bought and built recognizable brands, most of which have sustained to this day.
I believe Kushtown has done exactly what’s needed to build a serious, acquirable, consistent, commercially viable brand that could extend to traditional retail settings without giving the grey hairs at Albertsons and Whole Foods a case of the vapors. Kushtown has already established itself in the California medicinal market over the past eight years, and with their recent shift to the public markets, the capital needed for growth of sales networks and marketing programs is readily available.
California as a perfect test market, and Kushtown has first mover advantage in that space. As the legalization field allows, Kushtown will need to staff up and bring aboard real world retail experience, and they’re doing that currently, bringing in senior management with in-depth experience in building billion-dollar retail brands. Additionally, the company has trademarked the Kushtown name across the world, including Canada, Europe, Australia, New Zealand, Brazil, Colombia, Uruguay and many other countries.
Even better: While Californians can buy the product, Canadians can also buy a piece of the company that made the product, as KushtownUSA is listed in the US under the symbol FNREF, to go along with its Canadian FIN.C listing.
The company plans to change its public listing name from Finore Mining to KushtownUSA, and its trading symbol to KSH in the coming weeks, and I’ve bought a bunch of stock to take advantage of what I hope is going to be a great run.
–Chris Parry
FULL DISCLOSURE: The author is a marketing consultant for Finore, which is an investor in KushtownUSA, and owns stock in the company. Please do your own due diligence before buying any stock and consider the position of those talking about the company before committing to any purchase or sale of public shares. More information about the company can be found at https://equity.guru/2016/10/31/kushtown-usa-fin-c-playing-the-california-vote-like-a-boss/