Tag Archives: Katie Lewis

1933 Industries prioritizes Silver State as new era dawns for cannabis

Brayden Sutton is a refreshing change of pace in the cannabis industry.

Sharp. Concise. Thoughtful. And yet, blunt – not in any way that is impolite, but in a way that very simply underscores his bunker of experience in the cannabis industry.

As the founder and Chairman of the Board of 1933 Industries (CSE:TGIF), Sutton is helping steer a small but mighty ship that is looking south – to the Silver State, primarily.

“Nevada is the place to be,” says Sutton. “It’s one of the most attractive cannabis markets in the US, which provides a solid backdrop for growth.”

Nevada is more than a stone’s throw from 1933’s headquarters in Chilliwack, British Columbia, but it is, undoubtedly, a state like no other. The company also has partnerships in California and Colorado, but it is Nevada where 1933 has been at the heart of growth in the cannabis business for years.

Dawn of a new era

As for the name? The “1933” in the company’s moniker is a nod to the year when the prohibition of alcohol ended in the US.

“It was the dawn of a new era,” says Sutton. Today, 1933 Industries aims to capitalize on opportunities that have come as a result of the end of cannabis prohibition in Canada and industry legalization in a collection of US states.

“The US has not even begun yet,” says Sutton. “I compare it to what Canada was like in 2012 so there’s an incredible opportunity there. It has years of accelerated growth ahead.”

“There’s no roadmap right now,” adds Sutton. “The risks are higher in the US than in Canada, but it brings much higher upside potential.”

A diversified mix of assets

1933 Industries certainly seems to have the asset portfolio to make the most of that potential. Licensed medical and adult-use cannabis cultivation and production assets; proprietary hemp-based, CBD-infused products; CBD extraction services and a specialized cannabis advisory firm.

The company has three subsidiaries: Alternative Medicine Association LC (AMA) and Infused MFG – both located in Nevada – and Spire Global Strategy, located in Vancouver.

AMA is a licensed medical and adult-use cannabis cultivation and production facility in Las Vegas that hosts its own line of products, while also manufacturing other companies’ brands. Some of these products include concentrates such as Cake Batter, Crumble and Sugar; a vape pen sold with distillate oil; and several flower strains.

“AMA holds the first cultivation license for cannabis in Las Vegas,” says Sutton. “It has over 100 products in 46 states across 700 retail stores.”

And that’s a number that’s poised to grow, thanks to 1933’s brand new 67,750 square foot cultivation facility in Las Vegas, which represents a 10-fold increase from what it previously held.

Nevada, the place to be

If Nevada is the state to be in, Las Vegas is the city.  With more than 42 million visitors each year, it is poised to become one of the world’s largest adult-use cannabis markets.

The new facility is a key piece of the puzzle, as it will ensure consistent supply of cannabis flower and input material, meaning increased capacity, production efficiencies and economies of scale, all of which the company believes will improve yields and provide higher margins.

The facility is segmented into five different zones, with 15 bloom rooms and four veg rooms. Once at full capacity, it’s anticipated it will produce 700-800 pounds of flower monthly.

But that’s not the only piece of the puzzle for 1933 Industries. Subsidiary Infused MFG is a Las Vegas-based manufacturer of hemp- and cannabidiol-based products with a number of proprietary product lines, which include the well-known Canna Hemp, Canna HempX, Canna Hemp Paws and Canna Fused. The consumer packaged goods division experienced over 8,000% growth during its first year and represents the fastest growing segment of the company’s business. Nationally recognized, the Canna Hemp brand resonates with customers seeking the benefits of CBD and hemp and are available in over 700 retail outlets across the US.

Building a hempire

Adjacent to its cultivation facility, 1933 Industries is progressing with plans to launch one of Nevada’s largest hemp extraction facilities, as it focuses its gaze on the booming cannabinoid, or CBD, industry.

The new processing facility will produce extracts for full spectrum oils, distillates and isolates. The lab will also have the flexibility to isolate cannabinoids that are emerging in popularity. 1933 Industries aims to have it up and fully running by the end of the year.

The company has invested heavily in research and development, particularly where it comes to the design of its customized equipment, in order to provide maximum capacity and efficiency.

“We want to utilize the isolates in the manufacturing of our own consumer branded goods and secure the supply of raw materials,” says Sutton, adding that the move will increase margins and benefit from a recurring revenue stream from sales to other manufacturers.

Another subsidiary is Spire Global Strategy, an advisory firm that provides diligence, security, and intelligence services to clients around the world and is headquartered in Vancouver. It gives the company exposure to Canada and addresses the lack of discussion around infiltration of organized crime, diversion of product, internal theft of product, products making it into stores when they should not be, and other issues.

A string of, let’s face it, cool deals

There is a certain coolness factor when it comes to 1933 Industries – from its Instagram page to some of the partnership deals it’s signed to the look and feel of its products.

1933 subsidiary Infused MFG partnered with legendary skateboarder Tony Hawk in April under a two-year licensing agreement with House of Hawk for the launch of several exclusive, co-branded hemp & CBD products. It’s part of a growing trend, aimed to bring awareness of the rise of CBD in the sports world.

The company also inked a two-year agreement with OG DNA Genetics to cultivate, manufacture, distribute and sell OG’s branded cannabis. In the cannabis world, think of OG DNA Genetics as the crème de la crème of the cannabis genetics world. Rooted in Los Angeles and founded in Amsterdam, over the last decade the company has built and curated a seasoned genetic library, with operating procedures for genetic selection, breeding, and cultivation.

Subsidiary AMA also recently inked a licensing deal with hip-hop artist and actor Kurupt to bring his Gotti’s Gold cannabis brand to the Nevada market, the second partnership of its kind. For those unfamiliar, Kurupt is a hip-hop legend and actor who played an instrumental role in the launch of the early careers of some of the most notable names in the genre: 2Pac, Warren G, Dr. Dre and Snoop Dogg.

Bright future

But at the end of the day, on paper, numbers matter, and Sutton is the first to underscore that.

In an industry that can be quick to assign eyebrow-raising valuations to companies that have no earnings, no revenue and sometimes little more than a logo and an investment deck, 1933 Industries appears to be a lean machine poised for an exciting year and beyond as it moves towards profitability.

The next step?

“Block out the noise, build value and continue what we’re doing,” says Sutton. “We have an incredible head start.”

1933 Industries is using a tried and true model for a simple reason: it works. That model is to establish a foothold in several parts of the value chain and replicate it in other jurisdictions. The firm’s strength lies in its diversity of assets, which are focused on some of the most attractive niches of the cannabis industry.

“Many have the strategy to get into as many states as they can,” says Sutton. “But some states are superior to others. We’re not interested in a ‘let’s own the world’ strategy. We’re interested in a ‘best-on-balance’ strategy. At this point, Nevada is the place to be, so we’re going to go big there.”

This story was originally published at www.proactiveinvestors.com on June 17, 2019 and featured in the Public Entrepreneur magazine.

Learn more about 1933 Industries at https://www.1933industries.com/.

Peekaboo Beans: Vancouver-based childrenswear maker aims to create clothing that’s both practical and profitable

For Traci Costa, Chief Executive Officer of Peekaboo Beans (CSE:BEAN), her childrenswear company began as a labour of love – in her basement with her 2-year-old daughter, Cailin, surrounded by toys.

Fast forward to today? It’s a high-stakes business with a strong sales force of brand ambassadors, also known as “Social Stylists”, and strong growth potential on the back of a shift in retail sales as millennials start to flex their fiscal muscles. Keep in mind, this audience spent US$200 billion last year, relying heavily on social media and influencers.

“There’s a generation gap that’s happening right now with millennials — millennial parents shop differently,” says Costa. “If you’re not on social media, you’re missing out.”

As a company, Peekaboo Beans has had long-standing power, pivoting in multiple market situations.

“This was about creating a brand through the eyes of a child,” says Costa, adding that when she started the firm in 2006, her goal was to design and create a functional apparel brand that was practical, fashionable and enabled children to live and play in comfort and style.

She saw a gap in the market and felt strongly that there had to be a better alternative to childrenswear that was out there.

Background in fashion? No. Background in entrepreneurship? Limited. But Costa had a vision.

“I wanted to change the way that we look at apparel for kids,” says Costa. “It was really about everything that a parent wants, and everything that a child loves in their clothing.”

Today, the original mission remains the same, however its business opportunity has shifted.

The global children’s apparel industry remains in transition mode; in the US alone, it’s currently estimated to be worth US$31.6 billion, despite excessive discounting and a slowdown in China.

Peekaboo Beans aims to continue to raise the bar: its business opportunity is designed for parents on their own terms and own schedule, which is key for busy parents.

The company has over 600 Social Stylists that offer customers personalized service through personal shopping, or online through social media platforms, such as Facebook and Instagram.

Around 75% of these brand ambassadors are located in western Canada, primarily British Columbia and Alberta, with 20% in eastern Canada, mostly Ontario and the Maritimes.

In addition, the company now has some 2,000 paid members who receive perks like free shipping and preferred pricing for an annual fee of $49.  Many of these “beanaholics” are also involved in marketing efforts through a program that awards points to use for product credit when they refer friends, write reviews, or share Peekaboo Beans photos on social media. Some actually used to fall into the Social Stylists category but transitioned to the new membership program when it was launched in October.

One market that continues to bloom is Peekaboo Beans’ US contingent: around 5% at the moment, but with potential to expand further in the future.

We have grown our Stylist base all across North America, starting in Canada, and are further establishing the brand in 34 states this year,” says Costa.

“Our Stylists are predominantly mothers, working, stay at home, with entrepreneurial aspirations.  They have one to four children, they’re educated, and they make buying decisions that are values-aligned.”

That demographic is key to the new strategy.  According to Fung Global Retail, bricks and mortar retail stores continue to struggle: in 2017, 7,000 stores closed, which is triple the previous year.

It’s a sobering statistic, indeed. But for Costa, it has given her the opportunity to pivot from getting her childrenswear in brick and mortar stores to a model that appears to have more staying power and potential.

Her most challenging time, she said, was in 2008, on the back of the recession when the company was operating as a retail model selling to local boutiques and stores.

“We had to adjust and pivot,” says Costa. “And we did.  We found a new model.”

Costa decided to steer Peekaboo Beans in a new direction, away from selling in retail stores to a more unified sales force, through a direct sales model.

As successful as that model’s been, Costa is determined to stay on the leading edge of market, technological and demographic change. To keep out in front, Peekaboo Beans recently transitioned the direct sales platform to an omni-channel approach, one that engages sellers through social platforms, including Instagram and Facebook, as well as other retail channels to maximize revenue and build brand loyalty.

“We’re moving it into a social selling platform where we can leverage technology and grow through an influencer base, social media and blogging — similar to an affiliate model,” says Costa.

Costa says the company is focused on growth on all levels, with a particular emphasis on expanding the US segment of its business, alongside launching an Amazon store very soon.  Temporary “pop up” shops have also proven to be successful.

With increased operational efficiencies, better margins and a new recurring revenue model, “we expect to see profitability within the next 12 months with this new platform,” says Costa, adding she hopes to add another 500 affiliates in the United States this year.

The US expansion plan will use a multi-faceted approach and the list of to-do’s is long: creating an e-commerce and wholesale strategy with a focus on certain markets, continuing to develop its social media strategy, attending more industry events, and increasing content with social media influencers.

“We’re building a social impact movement with the people that sell our product,” says Costa, adding that the company places a focus on partnering with manufacturers who have standards that align with its values: no harmful chemicals and toxins.

The year 2019 stands to be a good one for the company, as it will continue to transition from a direct sales model to a social retail platform.

“This model will allow our Social Stylists to shop, save and earn commission through sharing the brand on social media,” says Costa.

For now, Costa continues to push Peekaboo Beans’ forward with her goal to establish the company as an industry leader and category king in children’s apparel.

This story was originally published at proactiveinvestors.com on January 2, 2019 and featured in the Public Entrepreneur magazine.

Learn more about Peekaboo Beans at https://shopca.peekaboobeans.com/.

Gabriella’s Kitchen: Healthy foods and cannabis-infused products take wellness to a whole new level

When you first meet Margot Micallef, chief executive officer and co-founder of Gabriella’s Kitchen (CSE:GABY), her authenticity shines through: her firm handshake, her warm smile and her clear words.

It shines through particularly strongly when she talks about her sister: Gabriella, the namesake of Gabriella’s Kitchen. Although Gabriella passed away after a battle with cancer, she remains the company’s inspiration.

The pure-play cannabis wellness company has come a long way since creating its original award-winning skinnypasta, a high-protein, low-calorie and low-carbohydrate fresh pasta. Other product lines have been added to the shelf: noodi, gabbypasta and most recently alto, which includes the company’s cannabis-infused products. Today, the vertically integrated, branded, consumer products company focuses on utilizing cannabis for the lifestyle consumer.

Not to mention the benefit of having Micallef at the helm. Her resume is impressive, to say the least: a lawyer and philanthropist, founder of Oliver Capital Partners and a former Senior VP at Shaw Communications.

Public Entrepreneur spoke to Micallef about Gabriella’s Kitchen’s origins, its new line of cannabis products and global expansion plans, and how the company is seeking to change the conversation around cannabis health and wellness products.

Q. Can you give us some background about how Gabriella’s Kitchen started?
My sister, Gabriella, and I decided to move to a healthier lifestyle and identified a derth of products in the market, primarily around food, that supported a healthy lifestyle. We saw the business opportunity. As we were launching our business, my sister was diagnosed with stage IV lung cancer.

The diagnosis really brought home the need to change our lifestyle and focus on our health and well-being that was within our control. Her doctors couldn’t do anything for her and they told her that. The pasta line was inspired by the dietary restrictions Gabriella faced throughout her cancer journey.

The beauty of what we did was that we were able to prolong her life for five years.  She had great quality of life and really learned to value the foundation of health and wellness through diet and lifestyle.

Q. I don’t think many people realize the effort it takes to get a product on the shelf.  Can you walk us through it?
It’s tough. In order to get your product on the shelf you have to dislodge somebody else’s product.  That’s something most people don’t understand. We knew going in we were going to make amazing products, that there was a demand for these products and we were going to get them to market.  But it’s a lot more work and a lot more money and takes a lot longer than anybody thinks it’s going to.

We started it in a little retail location in Toronto — we moved to Toronto from Calgary because that was the biggest market in Canada.  We’d make the product in the back and sell it out the front. At 3:00 pm each day, Gabriella would close up and go pound the pavement — and slowly and surely, we got more retailers.  We got up to around 200 when she passed away in 2011. I ended up taking over the business in 2015. I’ve invested about $5 million and raised another $19 million to date.

Q. What have you used the funds for and walk us through how you leverage the infrastructure you have in place?
We’ve used that money primarily for product development and to build out our team and infrastructure.

That’s our differentiator.  With our strong infrastructure, we can move into any channel we want to, including the licensed cannabis channel.  We came upon the cannabis space about a year ago when we examined the healthful properties of cannabis.

In many ways, our approach was opposite that of many other companies, which have an idea, raise the money and then build the infrastructure.  We already have the infrastructure and the team with the knowhow to get the product on our shelf. Our existing business line has more than 30 unique products that cater to health-conscious consumers, whether they shop in the mainstream shopping channels or in the licensed cannabis retail channels.

Leveraging our existing infrastructure means we can move product into a channel much more rapidly than anyone else can.

Q: Talk about the cannabis space and what kind of consumers you’re looking for.
Our goal is to serve consumers wherever, however, and whenever they want to consume cannabis wellness products – and that means in the mainstream channel or in the licensed cannabis retail channel.

We’re looking at a diverse range of products as vehicles to assist them in their chosen modality for consumption.  We already know that the mainstream market is going to start carrying CBD-infused products in a big way. I believe that once federal legislation in the US changes, there will start to be a move afoot to get all cannabis infused products into mainstream channels.  We will be ready for that opportunity.

Consumers are changing their perspective on health and are looking for new ways to supplement or replace traditional medicine.

Q. Can you talk about how your team continues to be built out?
We’ve got a whole research and development department.  One to note is Mara Gordon, who is a pioneer in the cannabis space and our chief research officer. She has amassed a database of formulations and health attributes associated with the cannabis plant that she has garnered from her own experience in working with physicians, clinicians, researchers and patients over the last 10 years.

We also continue to build out our expertise in the cannabis channel, having just hired a VP sales-licensed channel and acquired Sonoma Pacific, a licensed cannabis distribution company in California.

We also have a business development team that is scouring North America for brands that we want to bring under our umbrella. We want to grow through acquisition as well as through innovation.

Q. What does your next year or two look like?
We want to be the category leader in the cannabis wellness space. Not “one of” the leaders, rather, “the” leader. We know that the category leader takes 70% of the economics off the table. We want to be the one that everybody else wants to chase.

We want to do that for two reasons. One is that we believe that when the federal landscape changes in the US and the big players move into the market, we think that they will look for acquisitions that will move the dial for them.

We believe that if we can build a significant platform in North America that we can then partner with a global player and benefit consumers in a much broader way and, of course, benefit our investors.

This story was originally published at www.proactiveinvestors.com on December 4, 2018 and featured in the Public Entrepreneur magazine.

Learn more about Gabriella’s Kitchen at https://gabriellas-kitchen.com/ and on the CSE website at https://thecse.com/en/listings/diversified-industries/gabriellas-kitchen-inc.