President Trump’s war on vaping has cast a dark shadow over the booming e-cigarettes industry. For Vapen MJ Ventures (VAPN.C), it was never just about the vape.
On Wednesday, Vapen sent out a press release highlighting its diverse revenue pipeline – one that goes beyond the vaporizing cartridge – and announced plans to bring a diversified product mix to new markets.
Vapen’s core business, which is derived from an Arizona licensed vertically integrated model, generated US$13 million in revenues during the first two quarters of 2019, with EBITDA profits totaling $4 million.
The purpose of the Wednesday presser was to highlight the company’s product diversity in light of all the nasty headlines directed at the vaping industry. Just take a look at this headline from Maclean’s:
Vapen has been caught up in this nonsense even though its products don’t contain the chemical widely linked to the 450 cases against e-cigarettes. As a matter of fact, Vapen’s products don’t even contain nicotine and its e-juice is derived entirely from distilled cannabis oil.
So, what the hell is going on? Why are policymakers considering blanket bans on vape cartridges when cigarette companies are allowed to legally kill seven million people each year?
Thai Nguyen, founder and CEO of Vapen MJ, stressed that his company’s products are based on “elevated standards for safety, quality and purity.”
“Our expertise with THC and Hemp extractions and the diversity of our product lines will enable us to be flexible and maintain our steady growth. Vapen is our brand and the vaporizing cartridge is only one of many products we manufacture. We support and encourage enforcement related to safe ingredients and licensed producers”
—Thai Nguyen
Vapen’s product line includes cannabis flower, concentrates, distillates, CBD oil and accessories. The company operates a successful cannabis business in six states: Arizona, Nevada, California, Oklahoma, Massachusetts and Ohio. Its hemp farm and seed businesses serve the U.S. states of Kentucky, Arkansas and Hawaii, as well as Jamaica.
Vapen’s addressable market
As consumer spending on cannabis concentrates continues to grow, Vapen’s addressable market for vape cartridges has already topped $3 billion, according to Arview Market Research. The market opportunity is expected to hit $8.4 billion by 2022 – and we’re just talking U.S. numbers.
In 2018, vaping accounted for 58% of total concentrate sales – a figure that could rise as cannabis consumption continues to go mainstream. Researchers credit the growth of this market to its accessibility and appeal to new users. Vaping is considered less intimidating for new users and relatively simple to use relative to other methods.
Beyond e-cigarettes, Vapen is operating in a U.S. cannabis market valued at $11.3 billion as of 2018. The legal sector as a whole is expected to top $66 billion by 2025, representing a compound annual growth rate (CAGR) of 23.9%, according to Grand View Research.
VAPN.C stock update
Vapen’s stock price has been extremely volatile since hitting the Canadian Securities Exchange just a few months ago. VAPN.C is trading at less than half of its all-time high, with exceedingly thin trading volumes making any kind of analysis virtually useless.
Turnover in VAPN.C amounts to a paltry 3,673 shares per day, according to Yahoo Finance.
VAPN.C was last seen trading at $0.62 in the OTC market. It has a total market capitalization of $12.83 million.
VAPN.C’s performance leaves a lot to be desired, but the underlying company is trending in the right direction. Vapen MJ is not only profitable, it has been on a solid growth trend since 2016. If you’re looking for substance over hype and aren’t deterred by extreme volatility, VAPN.C could be a good option to explore.
—Sam Bourgi
Full disclosure: Vapen MJ Ventures is an equity.guru marketing client.
