Heritage Cannabis: A US Execution Story

Earlier this year, we highlighted Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) as a North American cannabis operator that is flying under the radar. When it comes to Heritage, we are very excited about its leverage to the United States (US) and want to provide more information on this aspect of the business.

Currently, Heritage is capitalizing on Missouri and West Virginia in the US and we are favorable on this part of the business. Although Missouri and West Virginia are not considered to be high-profile markets in the US, we expect Heritage to use the markets as a launchpad to expand into other states in the US.

A US Growth and Execution Story

Last year, Missouri voted in favor of legalizing recreational cannabis and we expect the development to benefit the business in the coming years. A few months ago, Heritage started selling cannabis in Missouri and this comes after it formed a strategic relationship with Como Health (doing business as 3Fifteen Primo Cannabis).

We consider 3Fifteen to be a strategic partner for Heritage for many reasons. So far, Heritage has been working alongside 3Fifteen to supply production equipment and train employees on the proprietary methods of extraction and oil production. As part of the relationship, 3Fifteen is allowing Heritage to use its license to produce branded products for medical cannabis patients in Missouri. 3Fifteen also granted shelf minimums for Heritage’s branded products in its Missouri dispensaries and we are favorable on the growth prospects of the relationship.

According to Grandview Research, Missouri’s medical cannabis market was valued at US$290 million in 2021. In late 2020, the state started to allow for the sale of medical cannabis products and we are favorable on how the market has evolved since then. Last month, Missouri voted in favor of legalizing recreational cannabis and we expect the development to serve as a growth catalyst for Heritage.

Shortly after Heritage formed a relationship with 3Fifteen, the North American cannabis company started to operate in West Virginia and established a strategic relationship with Harvest Care, a grower, processor, and provider of premium quality medical cannabis products. Through the relationship, Heritage can produce branded products to be offered to medical cannabis patients in West Virginia.

Last year, Harvest Care was granted one of ten cultivation licenses and will contribute the cultivation and the processing license to the relationship with Heritage. Of the ten dispensary licenses that were granted, only two are currently in operation and we find this to be significant when we are analyzing the market opportunity for Heritage.

A Misunderstood Growth Story

A unique trait with Heritage is related to the amount of demand for its intellectual property (IP) and proprietary cannabis brands. Heritage is well positioned to capitalize on the US by owning a portfolio of brands that are already highly sought after in legalized medical cannabis markets. Its strategy takes advantage of early entry in markets that have near-term potential for recreational legalization, and we are bullish on the approach.

The company’s asset-light, capital efficient approach in the US adds another important revenue stream to the business. Based on the operating model and the strength of the balance sheet, we believe the business has massive upside potential and will monitor how the business creates additional revenue streams to capitalize on the North American cannabis market.

Heritage is led by a management team that has been flawlessly executing on a multi-national expansion strategy. We believe the business has significant potential catalysts for growth and are of the opinion that the market is discounting the growth prospects that are associated with the business.

At current levels, we find the valuation to be compelling and the risk-reward profile to be favorable. If you are interested in learning more about Heritage Cannabis, please send an email to support@technical420.com with the subject “Heritage Cannabis” to be added to our distribution list.

Company Relationship Disclosure

T420 is responsible for the T420 opinions provided in this disclosure except all sources or information provided by other parties were not verified or authenticated and T420 does not undertake to confirm or substantiate or be responsible for such information provided by other parties.

Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

Pursuant to an agreement between Spotlight Media Corp and Heritage Cannabis (CANN) we have been hired for a period of 90 days beginning December 1, 2022 and ending March 1, 2023 to publicly disseminate information about CANN including on the Website and other media including Facebook and Twitter. We are being paid $3,000 per month by CANN and were paid “ZERO” shares of unrestricted or restricted common shares. We plan to sell the “ZERO” shares of CANN 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 CANN in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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