Now that we are in the last quarter of 2019, we are taking a close look at the companies that are best positioned for growth during 2020.
Last year, the cannabis sector came under heavy pressure during the last calendar quarter and this is a trend that we do not expect will repeat itself this year. One of the reasons we are confident in the cannabis sector is due to the recent decline. Concerns related to vaping has put added pressure on the industry and we believe that these issues are transitory.
Although most of the issues related to the vaping market are associated with black market products, legal cannabis companies that offer products that have been tested by third-party laboratories have been significantly impacted by the recent reports. Going forward, we believe that the cannabis businesses that are levered to the vape market are not going to see any repercussions and are of the opinion that this has created a great opportunity for investors.
1933 Industries (TGIF.CN) (TGIFF) is a US cannabis business that has been impacted by the recent downturn in the market and we believe that this is an opportunity to be watching. From a valuation standpoint, 1933 Industries is trading at a discount when compared to its peers and has substantial growth prospects.
We expect 2020 to be a banner year for the US cannabis company and for its move into a much larger state-of-the-art cultivation facility to be a major catalyst for growth. A few weeks ago, 1933 Industries reported a major milestone and commenced the flowering cycle of its cannabis plants in the company’s new, purpose-built, indoor cultivation facility located in Las Vegas.
Expect Revenue Numbers to Drastically Improve in 2020
In late August, the plants completed a vegetative stage for four weeks after the transfer to the new facility with three rooms having begun the flowering cycle in early October. The first harvest from the initial three rooms is expected to be in early December, with continued harvests expected to take place every two weeks while additional grow rooms come online. When looking at the scale of the facility, there is a lot to be excited about. The facility has 15 bloom rooms and we are bullish on the amount of revenue that can be generated by these rooms.
During the summer, we visited the purpose built state-of-the-art cultivation facility in Las Vegas and were impressed with the operation. When compared to the first facility, the new facility can produce well over 5 times more cannabis and we expect to see 1933 Industries start to generate significant revenues in 2020 and beyond.
One of the reasons we are excited about the new facility is due to the improvements from a technology standpoint. The facility is specifically built with integrated technology with high controls and automation to cultivate high-quality craft cannabis at scale with assured consistency and efficiency. In a world where safety is of the utmost concern, we are favorable on the process that 1933 Industries has in place and will monitor how the team is able to drive the operation forward.
Another reason we are excited about the move into the new facility is due to the amount of products that can be created from it. The increased production capacity will provide sufficient supply for the production of company branded products as well as for its licensing partners such as Blonde™ Cannabis, OG DNA Genetics, Jack Herer, and PLUGplay.
1933 Industries is Flying under the Radar
We are impressed with the progress that the company has made over the last few months especially as it relates to increasing production capacity in Las Vegas to reach steady-state production. Going forward, we expect to see the company replicate this model in states like California and believe that the market underappreciates this aspect of the story.
During the last few years, 1933 Industries has been nothing short of an execution story and are proven operators in the cannabis space. The company has been working tirelessly on its expansion and is positioning itself to be an industry leader not only by maximizing cultivation and extraction capabilities but by building a strong portfolio of high margin, industry-leading brands that resonate well with cannabis consumers.
Although 1933 Industries has been nothing short of an execution story, the shares have been trending lower with the market. We believe that the market is missing out on something big and this is an opportunity that we continue to be excited about. 1933 Industries is a cannabis business that has visible catalysts for growth and this is an opportunity to put on your radar.
To learn more about how 1933 Industries is well positioned to capitalize on the US cannabis industry, please reach out to firstname.lastname@example.org to be added to our distribution list.
Pursuant to an agreement between StoneBridge Partners LLC and 1933 Industries we have been hired for a period of 180 days beginning July 15, 2019 and ending January 15, 2020 to publicly disseminate information about (TGIF) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month for a period of 6 months. We own zero shares of (TGIF), which we purchased in the open market. We plan to sell the “ZERO” shares of (TGIF) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (TGIF) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.