1933 Industries (TGIF.C) moves into California with management services agreement

California
08/15/2019

1933 Industries (TGIF.C) today signed a two-year management services agreement with California-based medicinal and recreational cannabis business licensee Green Spectrum Trading.

The agreement will have 1933 providing general management and oversight to Green Spectrum in exchange for establishing a local presence for their subsidiary, Alternative Medicine Association (AMA), outside of Nevada.

“California is already positioned to become one of the largest cannabis markets in the world and setting up a local operation has been a key priority for us. Manufacturing our THC AMA-branded line of concentrates and CBD Infused Canna Hemp(TM) portfolio of wellness products in the state enables us to reach markets across the most populous hubs and establishes us as a multi-state operator with a turnkey model that can be exported to other states,” said Chris Rebentisch, CEO of 1933.

1933 will provide general managerial oversight for Green Spectrum’s regular business operations, including manufacturing and distribution, staffing and sales, and marketing, accounting and compliance. The company is going to build and source materials and equipment for a new manufacturing and extraction facility.

This is the same approach to vertical integration that made the company successful in Nevada. They controlled everything from cultivation and extraction down the line to sales and distribution, and they’re anticipating that the same seed-to-sale approach will allow them to duplicate their successes in California.

“Our oversight will ensure the consistency and quality of our premium branded portfolio and will leverage our already established distribution channels reaching dispensaries and retail outlets. This is an exciting opportunity that enables our company to capitalize on California’s growing market. We are pleased to partner with Green Spectrum and their cultivation expertise to quickly scale up operations,” Rebentisch said.

According to Statista, the California cannabis industry is projected to generate over $6.59 billion in sales by 2025.

Medical retail cannabis sales from 2017-2022 (in billions) | Source: Statista.com

AMA is a wholesale grower and producer that sells to licensed medical and adult use retail dispensaries and retail stores. They’re primarily focused on Las Vegas, but what they bring to California is their decades of growing experience and proprietary methods for curing and storing to preserve and develop unique strains.

The company has also signed deals with well-known third-party products like The Real Kurupt’s Moon Rocks, and Krypted.

Going to California

The signing of the farm bill at the beginning of the year opened up a lot of different avenues for cannabis companies, including the prospects of adding hemp-derived CBD to their formulations. For a company like 1933, which is located in Las Vegas, that presented a curious opportunity that Rebentisch was keen to get involved with.

Las Vegas is not only one of the largest tourist venues in the world, it’s also home to world-class gyms and athletes, and it’s a regional hub for a number of professional sports—including MMA.

So signing UFC fighter Sara Moras and getting their CBD-derived Canna Hemp infusions into gyms seemed like a good fit. But they didn’t stop there, and instead turned around to sign Tony Hawk from the House of Hawk, the famous professional skater from the ’90s and early 2000s.

The addition of a mid-card fighter and a has-been skateboarder isn’t much, but they did raise visibility for the brands, and it’s a bit curious if 1933 is going to continue this trend now that they’re in California. Who could they get?

—Joseph Morton

Full Disclosure: 1933 Industries is an equity.guru marketing client.

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