Last week, we had the opportunity to speak with the new Chief Executive Officer of 1933 Industries Inc. (TGIF.CN) (TGIFF) Paul Rosen. We left the conversation feeling increasingly excited about the direction that he is taking the business and believe that this is a turnaround story in the making.
When Paul was appointed as CEO a few weeks ago, he made a few immediate changes to the company that were centered around reducing expenses and bringing the business down a path to profitability. With Paul at the helm of 1933 Industries, we believe that the business will emerge from the current market environment in a better position than when it has entered.
When Paul initially took over the role of CEO, he put a major emphasis on strengthening the company’s balance sheet and has been executing on this strategy. 1933 Industries recently announced amendments to previously issued debentures that cleaned up the balance sheet and lowered the amount of debt that the business was holding.
By amending the previously issued debentures, 1933 Industries is better positioned for growth and we are favorable on this change. Paul is one of the largest shareholders of the company and we believe that he is putting his money where his mouth is by executing on this strategy. Another major focus for Paul is on the e-commerce side of the business, especially as to how it relates to Canna Hemp, a wholly owned subsidiary.
By putting a major emphasis on the e-commerce side of the business, we expect the cannabidiol (CBD) brands that fall under 1933 Industries’ umbrella to gain traction with consumers across the country. Over the long term, we expect this focus to have a positive impact on profit margins and are favorable on this aspect of the story.
1933 Industries’ Canna Hemp subsidiary has been approved to sell CBD products through several leading online retailers Amazon and Walmart. These relationships are expected to be a substantial catalyst for growth, and we believe that the market does not take these strategic partnerships into account when measuring the value of the business.
Another important vertical of 1933 Industries is Alternative Medicine Association (AMA) and we are bullish on the growth prospects that are associated with the new facility that it operates out of. Currently, 1933 Industries is producing considerably more cannabis than ever before, and we expect this to have a positive impact on the fundamentals of the business.
The addition of Paul to the 1933 Industries team is a significant development and we believe that the market underappreciates what he brings to the company. Paul is a pioneer in the cannabis sector and has been successful with several high-profile brands and leading businesses. The expertise that he brings to 1933 Industries is invaluable and we believe that he will play a key role in the success of the business.
Going forward, Paul is focused on optimizing the top line of the business, enhancing margins by minimizing expenses, recruiting strategic additions to the management team, and improving operations. We are favorable on the focus of the business and expect these initiatives to have a substantial impact on the long-term success of the operation.