Last month, we highlighted 1933 Industries (TGIF.CN) (TGIFF) as a cannabis company that was flying under the radar and is attractively valued. The vertically integrated cannabis company has an attractive structure and operates through three subsidiary companies.
1933 Industries owns licensed medical and recreational cannabis cultivation and production assets, proprietary hemp-based CBD infused products, CBD extraction services and a specialized cannabis advisory firm supporting clients in security, intelligence and due diligence. We are favorable on the diversity of these assets and believe that the company is focused on some of the most attractive verticals of the cannabis industry.
There are number of reasons why we are favorable on 1933 Industries and want to highlight some of these. First, the company is focused on some of the most attractive cannabis markets in the United States. Second, 1933 Industries is well capitalized and has significant catalysts for growth. Third, the company is led by a management team with a proven track record of success. Finally, 1933 Industries has an attractive business model and is focused on some of the fastest growing segments of the cannabis industry.
1933 Industries has attractive leverage to the Nevada market and has been in the middle of a major expansion, targeting several burgeoning cannabis markets on the west coast of the United States. We have been closely following this vertically integrated cannabis company and have issued an update on this opportunity.
Executing on the Burgeoning CBD Market
During the last year, demand for CBD products has significantly increased and this is a trend that we expect to continue, especially after passing of the 2018 Farm Bill in late December. Through Canna Hemp, 1933 Industries is well positioned to capitalize on this burgeoning opportunity, and we will monitor how the team continues to execute.
We are impressed with 1933 Industries when it comes to its leverage to the CBD market and believe that this is an opportunity that is not fully appreciated by the street. Last month, the company’s subsidiary, Infused MFG., reported to have attained product distribution into 46 states and has done a fantastic job at expanding its reach.
Infused, a manufacturer of proprietary hemp-based CBD infused health and wellness products has established its own distribution to over 600 stores and this represents a significant opportunity. With this type of reach, we expect Infused to become a major piece of the overall business and will monitor how the products gain traction in these markets.
Infused’s recognized brands, including Canna Hemp, Canna Hemp X, and Canna Hemp Paws, are available in more than 250 retail stores in California, Nevada, Arizona, and Colorado, with the remainder distributed across the United States. The company has also been able to establish a substantial e-commerce presence and we are favorable on the growth prospects associated with this opportunity.
One of the most important aspects of this opportunity pertains to the distribution that is owned by the company. Owning your own distribution is important and plays a key role in ensuring that the company’s branding and messaging is properly delivered. We expect to see the number of stores carrying Infused’s brands to significantly increase throughout the course of 2019 and believe that this will be a major value driver for the company.
Signs Major MMA Athlete
Recently 1933 engaged professional athlete and mixed martial arts fighter, Ms. Sarah Moras, as a Canna Hemp™ sponsored athlete for a six-month engagement, promoting the Company’s Action Sports Division and representing the Canna HempX™ brand.
Ms. Moras, a Canadian mixed martial artist who competes in the Bantamweight division and is based in Las Vegas, has gained notoriety since making her professional MMA debut in 2010. “I am pleased to represent Canna HempX™. Training multiple times, a day is exhausting and takes a toll on my body. With Canna HempX™ CBD, I am able to push harder, recover quickly and stay focused longer” said Ms. Moras.
We see this as one small step for the emergence of CBD as a therapeutic substance for athletes, and one massive step for 1933’s brand awareness in the mainstream. We will be watching for future endorsement deals in the pipeline across various other sports.
Celebrities and CBD
In late February, 1933 Industries was able to gain significant awareness for its Canna Hemp product line when it was selected to participate at the WOW Creations Celebrity Gift Lounge ahead of the 91st Academy Awards. The company’s subsidiary, Infused MFG., was invited to include its CBD Relief Cream and CBD Elixirs in the celebrity gift bags at the event and we are favorable on the awareness that was created through this.
1933 Industries was the only CBD product included in the gift bags and this is a testament to the quality of products offered by the company. During the last year, Canna Hemp has received numerous awards, including Topical of the Year from Leafly, and we are favorable on this vertical of the business.
A Company with Massive Growth Potential
The passing of the Farm Bill was a catalyst for the CBD industry in the United States and the Brightfield Group believes that this could be a $22 billion market by 2022. The legislation legalized hemp as an agricultural commodity in the United States and we are favorable on the implications this has had on businesses like 1933 Industries.
1933 Industries is in the early innings of a major growth cycle and we believe that the market under-appreciates this growth opportunity. The company has several significant catalysts for growth and is trading at valuation that is very attractive.
We are favorable on the management team at 1933 Industries and believe that the team has been executing flawlessly on its business plan. The company has seen a significant improvement when it comes to its overall fundamentals and this is a trend that we expect to continue.
To learn more about this burgeoning United Staes cannabis opportunity, please contact email@example.com
Pursuant to an agreement between StoneBridge Partners LLC and 1933 Industries we have been hired for a period of 180 days beginning January 9 , 2019 and ending July 9, 2019 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.