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Technical420 Deep Dive: Manifest Seven

Sep 4, 2019 • 10:52 AM GMT+0000
10 MIN READ  •  By Anthony Varrell
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2019 has been a banner year for the US cannabis industry and we are impressed by the way the sector has advanced from a regulatory standpoint. So far this year, we have seen a significant increase in the number of states that have legalized recreational cannabis, and this is a trend that we are excited about.

During the last year, we have noticed a considerable increase in the number of public companies that are focused on the US cannabis market and we are not surprised by this trend. Although this trend is exciting, a number of the companies that recently commenced trading on the Canadian Stock Exchange (CSE) are not of the best quality and this is something that our readers need to be aware of.

Recently, we have been focused on identifying companies that represent advanced opportunities and have been less focused on early-stage operators. We believe that the cannabis industry has reached an inflection point and we are focused on companies that have a proven track record of success. During the back half of 2019, we expect to see several new listings and want to highlight a company that recently came across our radar.

The company, ManifestSeven (M7) has been highly focused on the California cannabis market, targeting the most attractive verticals of the cannabis supply chain. M7 is a first-of-its-kind cannabis logistics company that has created a fully integrated omnichannel platform for both businesses and consumers through its distribution hubs across California. The company has created a way to service and support every vertical in the supply chain and we are bullish on the growth prospects associated with the platform.

A Burgeoning Growth Opportunity to be Watching

When looking at the M7 opportunity, the business has a number of attractive verticals – its much more than a logistics cannabis company, which also boasts a significant e-commerce platform. The company represents a multi-faceted growth opportunity that has integrated every aspect of the cannabis industry in a manner that is compliant with California law.

California has recently come under fire for having hundreds of non-licensed cannabis retail outlets and the state has started cracking down on these illegal operations. ManifestSeven is highly focused on the California market and will provide cannabis retailers with a platform that is compliant with state regulations. This platform will bring greater efficiency to the California market and will speed up the seed to sale process.

ManifestSeven has been around for several years and previously operated under the name, MJIC Inc., which was an investment business and venture capital firm. In 2016, following the legalization of recreational cannabis in California, the company decided to pivot the focus of the business and became focused on the California cannabis industry as operators.

Shortly after making the decision to pivot, the management team formulated a strategy to address the supply chain issues in California and to stay away from the cultivation side of the industry. Following this decision, the company invested in building a distribution hub by acquiring its first licensed distribution center in Coachella along with licensed distribution centers in Long Beach and Oakland.

In 2018, the company set out to solve supply chain issues in California and developed an omnichannel integration platform to satisfy this need. The management team recognized a need for business-to-business (B2B) infrastructure from a license perspective, B2B services particularly as they relate to distribution, packaging and manufacturing. Through a series of acquisitions, the company was able to significantly enhance the business and acquired a foundational retail cannabis delivery business, MDelivers, and retail cannabis subscription business, MyJane, and we will discuss these acquisitions in further detail later in the article.

Later this year, ManifestSeven plans to complete a go-public transaction and commence trading on the CSE (under the symbol MSVN). This is an opportunity that we are excited about due to that attractive growth prospects and the significant potential catalysts for growth. Today, we have issued an update on M7 ahead of its public listing, and this is an opportunity to be following.

ManifestSeven: A Growth Story Worth Watching

M7 is the only company that is designing a logistics business with a fully integrated omnichannel platform for both businesses and consumers through its distribution hubs throughout California. We are favorable on the work the team has accomplished to put the company in the position it is in today and we are bullish on the growth prospects on a going forward basis.

ManifestSeven is well capitalized after the completing a $15 million private placement and we expect to see the management team complete the buildout of the existing platform while pursuing organic and inorganic growth opportunities with the proceeds. M7 is laser focused on execution and has been working tirelessly on its current expansion. By the end of the summer, ancillary retail and distribution channels will assume warehouse space of nearly 40,000 square feet to support the following branded CBD operations:

  • White Coat Hemp Co. (CBD e-commerce)
  • Puff Pack, LLC (ancillary e-commerce)
  • The Hippie Butler (ancillary subscription)
  • CM Smoke Supply (ancillary distribution)

ManifestSeven’s ancillary businesses compliment the company’s overall footprint in the cannabis space and have helped drive revenues. Once the roll-up strategy is complete (has already acquired three revenue-generative enterprises in the last five months), the company will have:

  • More than 38 license that are fully active across California
  • 7 facilities totaling more than 100,000 sq. feet of distribution and manufacturing space
  • $5.2 million in revenue at the close of its fiscal year (ends in November)
  • $10 million in run rate revenue by the end of March
  • $60 million in combined consolidated run rate revenue by August
  • 150+ employees & operational centers in 3 states
  • $24 million in Vicinity Real Estate Fund

From a distribution standpoint, ManifestSeven is well positioned and has more than 335 active dispensary accounts, a fleet of more than a dozen commercial vehicles, 2,000 active B2B clients, and a database of 10,000 ancillary B2B clients. The scale of the operation and the infrastructure in place will give M7 poll position to capitalize on the US cannabis market. Over the next year, we expect to see further growth on this side of the business and will continue to monitor this.

A California Execution Story in the Making

In April, ManifestSeven was granted a temporary license by California’s Bureau of Cannabis Control in connection with its distribution facility in Long Beach. This represented an important milestone as the facility is expected to serve as ManifestSeven’s Southern California distribution hub. Through this strategic location, the company can penetrate some of the most significant markets in the state (Los Angeles, Orange County, and San Diego). We are bullish on the growth prospects associated with these markets and the amount of synergies that can be recognized through this strategy.

The Long Beach facility will connect with the company’s licensed cannabis distribution, manufacturing, and delivery operations that are located in Northern California. We expect the focus on distribution to support the growth of the existing operation and it will also allow the company to efficiently address the distribution needs of cannabis businesses throughout the state.

The facility will allow ManifestSeven to service for our distribution clients throughout Southern California, from San Diego to the desert, and it will integrate with its statewide infrastructure to facilitate a seamless customer experience across distribution, manufacturing, and delivery of compliant cannabis products and services. The facility complements ManifestSeven’s recently licensed facilities in Brisbane and Oakland, through which the company will serve distribution clients and delivery customers throughout Northern California.

A few months ago, ManifestSeven announced the acquisition of M Delivers, one of the leading legal cannabis delivery companies in California. Off the bat, this acquisition makes sense as it adds another component to the existing California cannabis operation. Founded in 2015 and based in San Diego, M Delivers operates on a fully-licensed basis and in compliance with all local and state regulations, providing discreet delivery of safe, high-quality cannabis products to the consumer’s front door.

In a separate but related transaction, ManifestSeven also reported to have acquired the rights to the telephone number 1-800-CANNABIS, which will serve as the centralized gateway through which businesses and consumers alike will be able to access the company’s comprehensive suite of omnichannel solutions.

Since inception, M Delivers has assembled a database of more than 30,000 active retail customers. The acquisition bolsters ManifestSeven’s growing retail presence throughout California and we believe that the company will be able to maximize the growth potential associated with M Delivers by integrating its operations into the company’s licensed infrastructure throughout the state. By joining ManifestSeven’s omnichannel platform, M Delivers will be able to offer a wider variety of premium cannabis products to customers.

These acquisitions represent two major pillars for ManifestSeven on a going-forward basis and we are favorable on the growth prospects associated with these assets. M Delivers’ robust California customer base provides significant growth prospects on the retail and distribution levels and we expect to see the management team generate significant value from this.

Announces the Launch of Weden

Earlier this month, ManifestSeven launched its new innovative retail marketplace Weden,   the company’s e-commerce, storefront, delivery and call center services into a singular consumer-facing brand. Weden will operate as the business-to-consumer division of ManifestSeven, which is continuing to invest in building infrastructure and supply chain solutions for the industry.

The launch of Weden rebrands ManifestSeven’s recent strategic acquisitions and legacy retail portfolio under one identity, including a 7,200 square foot Haven dispensary dispensary in Santa Ana; delivery service M Delivers, which serves more than 30,000 retail customers throughout California; and telephone number 1-800-CANNABIS, connecting customers to the company’s full suite of products and solutions.

Weden represents as an inclusive experience which promotes community and offers the highest quality products to customers. In the near future, Weden’s retail footprint will expand even further, with the imminent launch of delivery operations in Orange County. This will provide Weden with a major strategic advantage in an area where few retail cannabis licenses have been issued.

Going forward, Weden will be able to tap into one of the most affluent markets in the US, with immediate access to more than two million potential customers, including a diverse baby boomer population and veteran community. Weden’s retail gateways can be accessed via weden.com and 1-800-CANNABIS and we are monitoring how this operation gains traction on a going forward basis.

A Proven Operator to be Watching

For several years, ManifestSeven has been highly focused on the California cannabis market and has a proven track record of success when it comes to driving growth across a diverse platform of assets. In 2018, the company generated more than $5 million of revenue and these numbers have ramped higher this year. ManifestSeven expects to record strong growth on a going forward basis and reported to have a September run rate revenue target of more than $65 million.

ManifestSeven is led by a management team that has a proven track record of success in a variety of industries. The management team is comprised of proven executives with diverse skill sets and we find this to be significant. When analyzing a cannabis company, it all starts with the management team and this is an area where ManifestSeven excels.

ManifestSeven is a new listing that we are excited about and are bullish on the multi-faceted growth opportunity. Over the next year, we expect to see the company enhance its current platform through continued execution and through acquisitions. We are favorable on this strategy and expect to see the company report strong growth on a going forward basis.

To learn more about ManifestSeven and to be added to our distribution list, please contact support@technical420.com.

 

 

 

Pursuant to an agreement between StoneBridge Partners LLC and Manifest7. (MSVN) we have been hired for a period of 180 days beginning August 1, 2019 and ending February 1, 2020 to publicly disseminate information about (MSVN) including on the Website and other media including Facebook and Twitter. We are being paid $10,000 per month for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero shares of (MSVN), which we purchased in the open market. We may buy or sell additional shares of (MSVN) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

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Authored By

Anthony Varrell

Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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