CBIS Executing on Brands and Establishes Market Penetration
Early-Mover CBIS (CSE:CBIS) (OTC:CAAOF) Hit Public Market with an Impressive Portfolio of Pot Products, Brands, and Multi-State Retail Options
The popularity of pot is on the rise across North America, now with two-thirds of Americans supporting full legalization. Analysts are beginning to fully acknowledge the global potential of widespread legalization, with even large institutions, such as BMO predicting a $194 billion market within seven years.
Getting to this point in the market’s still early successes was built off of the diligent hard work of many early market architects. One company turning that hard work into success is CBIS (CSE:CBIS) (OTC:CAAOF), who is sitting at a market value of just under CAD$300 million, with revenue projected to be an impressive US$116 million by the end of 2019, US$289 million in 2020, and a whopping US$561 million in 2021. After building the foundation of a diverse vertically integrated pot company, CBIS (CSE:CBIS) (OTC:CAAOF) has launched into the execution phase of its plan.
Establishing Multi-State Market Penetration
With a multi-state approach, the company can expand its revenue footprint, by cross-pollinating its brands in multiple markets. Currently, through its manufacturing-licensed clients in Colorado, Nevada, and Washington, CBIS (CSE:CBIS) (OTC:CAAOF) has the production capacity to generate just under $1 billion in revenue, based on current market prices.
Having its operations spread across multiple markets, and through gathering data from its popular The Joint dispensaries, CBIS (CSE:CBIS) (OTC:CAAOF) can repackage all offerings to suit each demographic its brands have cultivated interest from.
By 2020, the company aims to have a presence in Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington.
Once established in all of those states, the company would have access to a total population of nearly 80 million people.
Since its inception, the strategy for CBIS (CSE:CBIS) (OTC:CAAOF) has always been to cover a series of important legal pot markets. Multi-State Operators (MSOs) are gaining momentum in the US, many of which have multi-billion-dollar market caps.
Market Cap (CAD)
Last Price (CAD)
# of States
Harvest Health & Rec
Green Thumb Industries
Revenue Per Square Foot Crushing Traditional Retail Giants Numbers
Perhaps the most compelling statistic for CBIS (CSE:CBIS) (OTC:CAAOF) is the performance of its chain of dispensaries known as The Joint. Revenue from these dispensaries is quite significant, far exceeding the revenue-per-square-foot figures of the top retail names in the country.
From strictly a revenue-per-square-foot statistic, CBIS (CSE:CBIS) (OTC:CAAOF) is in a league of its own. MedMen Enterprises Inc., which is being labelled as the “Apple Store of Weed”, or even retail giant Apple Inc. itself, CBIS (CSE:CBIS) (OTC:CAAOF) is crushing the retail market, pot and non pot.
As this new green rush develops through a retail market, it’s worth looking at some comparables—in particular, their revenue per square foot of retail space. Keeping this factor in mind.
Market Cap (USD)
Last Price (USD) *
Retail $/sq foot
Tiffany & Co.
Tapestry Inc. (Coach)
* – USD price as of April 5, 2019
State-of-the-Art Manufacturing Abilities
Across three states, CBIS (CSE:CBIS) (OTC:CAAOF) is producing its portfolio of brands (INDVR Fire, INDVR Botanics, INDVR Strains, West Edison Concentrates, Evergreen Organix and Honu) in almost 100,000 square feet of manufacturing facilities out of its clientele of licensed entities in Colorado, Washington, and Nevada. Each wing brings considerable brand value to the parent company, in unique ways.State-of-the-Art Manufacturing Abilities
Based out of a state-of-the-art 18,000-sq-ft facility located north of downtown Denver is a premier pot product manufacturer and distributor of leading brands, including INDVR Fire, INDVR Strains, West Edison Concentrates, Evergreen Organix and Honu.
This premierfacility is one of the largest pot-infused-products facilities in Colorado, and among the largest in the nation. Thefacility can accommodate wet processing for extracted oils, beverages and edibles, as well as dry processing to make pills and dissolvable tablets.
Cheech’s Private Stash
More mainstream and popular figures are stepping up to put their name power behind new brands. Celebrity “stoners” such as Seth Rogen, Snoop Dogg, and Cheech Marin are already lending their street cred to pot projects, but even more straight-laced figures such as Martha Stewartare also getting involved.
Among these branded celebrity lines is Cheech’s Private Stash, endorsed by actor, comedian, director, author, and legendary pot user and activist Cheech Marin—of Cheech & Chong fame. Now available in Nevada and Colorado, the premium pot line has aligned with CBIS (CSE:CBIS) (OTC:CAAOF) to produce, market, and distribute Cheech’s Private Stash products in Colorado.
Here are some other companies that have found success through prominent endorsements from celebrities, each with market caps over $1 billion.
Market Cap (CAD)
Last Price (CAD)
Snoop Dogg, Martha Stewart, Seth Rogen
Trailer Park Boys
Out of the Washington-based Honu line, the company projects 2019 system-wide brand revenue to reach US$20.3 million. Since its inception, the brand has accumulated a series of accolades, including Best Edible Company, Best Pot Brand Design, and Best Sweet Edible in Washington. Award Winning Edibles
Easily the most dominant within its market is Evergreen Organix. The Nevada-based company has all but outcompeted its peers out of existence. Their quality-driven edibles are handcrafted by culinary artists, without cutting any corners and it shows. Using precision dosing and quality extracts in its goods, Evergreen Organix has scored all types of awards, including Best Edible Overall, Best Edible, and has been recognized as The Best Edibles in Vegasby Vegas Pot Magazine. All edibles in Evergreen Organix undergo three mandatory state laboratory tests before they’re packaged and sold to dispensaries. System-wide, Evergreen Organix is projected to bring in US$20.8 million in 2019.
Also very notable is the latest acquisition of the Colorado concentrate brand, called West Edison. Acquired for its technology, West Edison specializes in deconstructing the pot plant, separating out all the cannabinoids and terpenes, only to restructure them back into products in a clean and effective manner. The brand has already been quite successful, despite virtually no branding or marketing gaining hype for their products. Already the company has been projected to reach system-wide brand revenue of US$8.1 million in 2019, and has accumulated industry accolades of its own, ranking 1st, for All Concentrates Categories, and Best THCa2 in 2018.
Expansion Explosion of Brands and Dispensaries
The Joint has been voted Best Colorado Dispensary by top pot review site Leafly, three years in a row.
System-wide, the chain is projected to grow to a high of US$83.6 million in 2019. By the end of 2019, The Joint is anticipated to span 25 locations, in 5 states.
The INDVR line comes in three forms: INDVR FIRE, INDVR Botanics, and INDVR Strains.
The premium blend CO2-extracted INDVR FIRE THC vape line is currently distributing in Colorado, Nevada, and Washington, and is soon launching in California and Oregon. System-wide, the line is projected to yield US$11.1 million in revenue in 2019. INDVR Botanics blends key cannabinoids with complimentary ingredients to create specific extracts for wellness needs, and US$2.7 million in projected 2019 revenue. INDVR Strains is a sleek vape line that is set to launch in Colorado, Washington, Nevada, and California, and have a system-wide brand revenue projected to hit US$6.2 million in 2019.
For many up-and-coming pot brands, the value given to them is lower than what is realized when wrapped into a much larger entity, such as CBIS (CSE:CBIS) (OTC:CAAOF). Known as an arbitrage play, the company has very successfully acquired steady businesses with high top-line revenues, based on equity-based acquisitions, and new partners with a long-term vision.
The long term goal for CBIS (CSE:CBIS) (OTC:CAAOF) is to be in 10 states, with 100 dispensary locations by 2021. The company has targeted already those 10 states with 50 dispensaries by as early as next year, with the aim to be in Colorado, Nevada, California, Oregon, Washington, Alaska, Vermont, Michigan, Massachusetts, and Maine by the end of its expansionary push.
Data-Driven Growth Stemming from Dispensaries
Through the successes of its dispensaries under the The Joint branding, CBIS (CSE:CBIS) (OTC:CAAOF) gains a distinct advantage over other manufacturers. Across its current 5 states of coverage, in 25 dispensaries (which is set to hit 100 stores in 10 states by 2021), CBIS has access to millions of customers’ worth of data.
By using their retail positioning, CBIS (CSE:CBIS) (OTC:CAAOF) can aggregate their sales data, and determine the brands that consumers desire the most. Management then determine which products are hot, and which are not, and targets their future acquisitions accordingly.
Using this method since the company’s inception, they’ve observed that the entire industry is moving towards branded products. Back when the company started, 90% of its sales were of unbranded bulk flower products. A shift began in 2017, as the sales dispersed to 60% flower, 30% concentrate, and 10% branded products. By 2018, the branding of the industry truly began to take off.
An example of effective use of data was CBIS (CSE:CBIS) (OTC:CAAOF) taking the initiative to strike a deal with Cheech Marin and his Cheech’s Private Stash brand. Sales of the product far exceeded those of the similar unbranded strains, and with prominent placement, in multiple locations of The Joint the potential going forward is higher with the CBIS boost.
Stellar Management Team
Grown out by a group of early-movers in the pot space, the CBIS (CSE:CBIS) (OTC:CAAOF) team has successfully learned on the job since the company’s inception in Q1 2015, under the banner of Bertram Capital Finance Inc.—one of the first US-based pot hedge funds.
Chairman, President, and CEO, Jeffery Mascio, is long astute to the investment opportunities of the US pot sector. Previously serving as Managing Partner for Bertram Global Commodities Fund, Mascio managed in excess of $100 million in assets for Merrill Lynch, Morgan Stanley, and Smith Barney private clients. He also previously founded and acted as CEO of Meridian Capital Advisors, a Registered Investment Advisory firm.
Aiding him in the company’s expansionary strategies is Director and VP, Retail Operations, Brad Harris, who oversees all investment and operational activities of retail and dispensary locations. Much of the turnaround successes of the company’s The Joint chain of dispensaries is attributed to Harris’s direction. Prior to this role, Harris was an active owner and operator of 45 restaurants across 7 national and regional franchise brands—accumulating a wealth of B2C expertise. He has also served on the Colorado Subway advertising board, and acted as a business consultant for several smaller regional franchise brands.
As the company expands upon its goal of reaching 10 states of market presence, Director and VP, Compliance, Darrick Payne,oversees keeping the company in compliance. Adept at building out a variety of businesses, Payne previously founded Axis Venture Group and MOXIE Productions, and has been involved in a variety of business ventures including business development, real estate development, and angel investment.
Among the other talented members of the team, VP, Product Development, P.J. Rinker leads the design and development of CBIS (CSE:CBIS) (OTC:CAAOF)’s popular INDVR vaporizer lines, and is actively involved in brand acquisition and development. With a career built upon innovation, Rinker previously co-founded Lexa Custom Homes, which developed home designs featured in the Colorado Parade of Homes, and the Colorado Tour of Homes.
MULTI-STATE OPERATOR ADVANTAGES:
Over the next two years, CBIS (CSE:CBIS) (OTC:CAAOF) aims to have a presence across Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington. Once they’ve hit all 10 states, the company will have access to a population of nearly 80 million people.
Spread across three states, and with four manufacturing-licensed clients, CBIS (CSE:CBIS) (OTC:CAAOF) occupies nearly 100,000 sq ft of state-of-the-art manufacturing facility space. Once operating at full capacity, the company’s revenue potential is just under US$1 billion, when using current prices. Its Evergreen Organix, and Honu facilities combine for two states of significant brand production.
Having already successfully developed brands such as The Joint, and INDVR, CBIS (CSE:CBIS) (OTC:CAAOF) has shown it is capable of reading the market and future trends. Now that it has established its footprint across multiple states, CBIS plans to have a presence in 10 states, across 100 dispensaries by 2021. Along the way, it will continue to acquire brands and products that it sees as having potential for success within its dispensaries.
BEST PRACTICE LEADERSHIP TEAM:
CBIS (CSE:CBIS) (OTC:CAAOF) is led by an ambitious leadership group that was very early to the pot party. Chairman, President, and CEO Jeffery Mascio is supported by a capable team that includes astute retail expert Brad Harris as VP Retail Operations, Derrick Payne as VP Compliance, and PJ Rinker as VP Product Development. Given the longevity of the company, and its early mover status since 2015, the management team was involved in developing the best practices for the industry.
BIG DATA FROM DISPENSARIES:
Through its popular chain of dispensaries called The Joint, currently CBIS (CSE:CBIS) (OTC:CAAOF) accumulates data from 5 states’ worth of customer base. With this data, the company can select its next acquisitions, and refine its own brand and product offerings. Through this method, the company has already targeted new acquisitions that bring added value to its overall valuation. On a revenue-per-square-foot basis, sales from The Joint far exceed those of the top US retail chains overall, with approximately $13,000 per sq ft.