On March 28, 2019 1933 Industries (TGIF.C) announced that it is purchasing the remaining 9% of Infused MFG, bringing its total ownership position to 100%.
Infused MFG is a licensed producer, manufacturer and seller of industrial hemp-based and cannabidiol (CBD) infused products.
The company is “bridging the gap between healthcare professionals and patients seeking alternative healing”.
Infused has developed its own line of products under the Canna Hemp brand which is carried throughout 600 retail locations in the United States.
It’s not a small outfit.
Canna Hemp’s CBD-infused products include body lotions, lip balms, pain relief cream, dabs and vape cartridges. Its vape pens and elixirs are infused with a proprietary blend of terpenes used to create diverse aromas and flavors.
Canna Hemp line features organically derived hemp seed oil legally cultivated in the U.S. The products use proprietary chemical-free formulas, containing non-GMO and organic botanical ingredients designed to maximise “bio-availability”.
As a 1933 Industries shareholder, how do I feel about 1933’s increased ownership stake in MFG?
To quote the world’s sexiest 77-year-old billionaire ex-convict:
CNN: The CBD floodgates opened after President Donald Trump signed the Farm Bill into law in December. The bill legalized the production of hemp, which contains high levels of CBD.
CBD is non-psychoactive, meaning it won’t get you high. Instead, CBD is marketed for everything from helping to relieve pain and inflammation to reducing stress and anxiety.
Last year, the FDA approved the first drug containing CBD for the treatment of certain forms of epilepsy. In a recent interview with Brookings Institution, outgoing FDA commissioner Scott Gottlieb gives his take.
“We are witnessing a post-prohibition booming industry, where the medicinal nature of the cannabis plant is being recognized”, stated Brayden Sutton, President and CEO of 1933 Industries, “The trends in the cannabis market are akin to those at the end of alcohol prohibition, where the rapid growth of new companies, brands, jobs, and investment have the potential to create an industry as large as that of alcohol today.”
1933 commissioned the production of a short film to fully contextualize the cannabis plant’s long history and a medicine and a feared drug.
1933 Industries is doing interesting things with their Infused MFG line, confirms Equity Guru’s Chris Parry.
“Tying their product to interesting art, which would look great on a coffee table and would inspire conversation, is a smart way to add value to an already valuable product.
1933 is also tying nostalgia to these by packaging them to resemble old-timey handmade-label elixir products.”
“I’ve heard some market guys saying, “I don’t get it, why not do something cool and fresh?”, continued Parry, “But these will stand out on a shelf in a strong way, and connect to their audience by virtue of not drowning us in weed leaves and trippy paisley bullshit, but by instead making the products look like you’d want to keep the empty box when you’re done with what’s inside.”
“We have a strong brand that resonates with customers seeking the benefits of CBD and hemp”, stated Chris Rebentisch, Founder of Infused. “We would not have been able to achieve this rapid growth without the capital and expertise from our parent company, 1933 Industries.”
1933 Key Highlights:
- First licensed cultivator in Las Vegas
- Long Nevada grow history
- Restricted licenses for cultivation and production
- Rapid infrastructure build-out
- Expanding real estate portfolio
- Strong foothold in CBD) and THC products
- Established brand identity
- Growing sales and margins
- Hemp-processing and CBD extraction vertical
- New 67,750 sq. ft. cultivation-only facility
- Expanding production space to 12,160 sq. ft.
- New hemp processing facility to produce CBD extracts for full spectrum oils, distillates and isolates
“With over 80 SKUs and more in the pipeline under the Canna Hemp and Canna Fused brands,” stated Sutton, “We see the CBD market as a key component to our business and a high-growth vertical.”
Two weeks ago, 1933 closed a non-brokered private placement (PP) raising $4.5 million (10 million shares at .45). The PP was fully taken down entrepreneur Paul Rosen, who sits on the boards of iAnthus (IAN.V), Hill Street Beverages (BEER.V) and High Tide Ventures (HITI.C).
“1933’s business model incorporates cultivation, extraction, processing, manufacturing, branding, distribution, and ancillary services,” stated Rosen, “There are only a handful of companies that have been able to accomplish this in a short period of time.”
Complete 1933 Industries Fiscal 2018 Highlights
- Revenues of $12.6 million for the year
- Gross margins of 49%
- Total assets increased to $41 million
- Product offering expanded to over 120 SKU’s
- Retail footprint expanded to 600 stores
“Acquiring the additional 9% of MFG positions us to fully benefit from the future growth potential of Infused,” stated Sutton.
Full Disclosure: 1933 Industries is an Equity Guru marketing client and we own the stock.