1933 Industries reaches critical juncture with new products and management

Cannabis company focused on the growing US legal cannabis market New CEO, President and CFO Recent product launches Operates via two main subsidiaries What 1933 Industries does: 1933 Industries is a vertically-integrated, growth-orientated company, focusing on the cultivation and manufacturing of cannabis consumer branded goods in a wide range of product formats. Operating through two subsidiaries, the company controls all aspects of the value chain with cultivation, extraction, processing, and manufacturing assets supporting its diversified portfolio of cannabis brands and licensing partners. The company owns 91% of Alternative Medicine Association LLC (AMA), and 100% of Infused MFG LLC. The “1933” in the company name is a nod to the year when the prohibition of alcohol ended in the US. Today, 1933 Industries aims to capitalize on opportunities that have come as a result of the industry legalization in a collection of US states and focuses on the high tourism Nevada market. 1933 Industries has two main subsidiaries. The first is Alternative Medicine Association (AMA), a licensed medical and adult-use cannabis cultivation and extraction subsidiary that produces its own branded line of unique cannabis-based products and manufactures third-party brands. With state-of-the-art cultivation and extraction facilities based in Las Vegas, Nevada, AMA seeks to offer medical patients and recreational users alike a cannabis experience that’s exceptional, potent, and consistent in quality. AMA’s products include craft cannabis premium tier bud flower, pre-rolls and concentrated cannabis products such as Cake Batter, Crumble and Sugar, Live Resin, Shatter, Diamonds; vape pens and  distillate oil.   The second subsidiary is Infused MFG, a Las Vegas-based manufacturer of hemp-based, cannabidiol (CBD) infused products. Infused MFG’s product line includes topicals, creams, vapes, elixirs, capsules, dabs, lip balms and pre and post-workout recovery sports products. The subsidiary manufacturers its products under its Canna Hemp brand, which utilizes the power of hemp and CBD to bring natural wellness. How it is doing: At something of a critical time for the firm, 1933 Industries CEO Paul Rosen has joined its board of directors, having also been involved with the company beforehand as not only CEO but also a strategic investor and an advisor. Rosen is no stranger to the cannabis industry, having previously co-founded and served as CEO of PharmaCan Capital Corp that was later rebranded to The Cronos Group (NASDAQ:CRON) (TSE:CRON). Rosen also currently serves as the executive chairman of Global Go, a consultancy focused on the global regulated cannabis industry and is a co-founder and chairman of Pantry Co, a cannabis-focused start-up in the functional food market. The CEO is also not the first new arrival to the firm, with president Eugene Ruiz joining the firm in June followed by new chief financial officer Tricia Kaelin in July. Rosen’s elevation to the board also comes amid a period of expansion for 1933 Industries, which announced in August the launch of a new line of hemp-only products, as well as a new line of extra strength CBD products to its extensive wellness portfolio. Soon, it will be entering the largest segment of cannabis products with the addition of high tier craft bud flower to its menu offerings. The new product line, named Canna Hemp PLUS, has been developed for consumers who want to experience the added benefits of increased CBD at competitive prices from a reliable and trusted brand. With double the amount of CBD, the company said the PLUS line is aimed at offering “competitively-priced products” with some of the “highest amounts of CBD found today in the market”. In addition to the PLUS line, the company has also launched a line of products made with organic hemp seed oil available via online marketplaces such as Amazon.com and Walmart.com and via its direct-to-consumer e-commerce website, cannahemp.com. The company has also moved into the high-value cannabis flower market in Nevada, adding a premium smokable flower and pre-roll joints to its portfolio of brands in July. Aside from its own brands, the company is also making headway with its partnerships with other firms, inking a deal in early August with premium cannabis brand Five Star Extracts to produce its products exclusively in Nevada. In terms of numbers, for its fiscal third quarter ended April 30, 2020, 1933 Industries clocked up revenue of C$2.6 million, a 17% decrease from the C$3.1 million netted in the previous quarter. Operating expenses were $5.6 million, while the company posted a net loss of C$4.7 million, or C$0.02 per share. The adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization loss was C$3 million, a 45% improvement from the C$4.8 million loss in the fiscal second quarter. The company’s balance sheet had C$4.9 million in cash and total assets worth C$54.6 million at the end of the quarter. Inflection points: More partnerships with other cannabis firms Brands added to portfolio Sales expansion of existing products What the boss says: Commenting on his appointment to the company's board of directors, Paul Rosen said his appointment as CEO “has helped accelerate positive change at 1933 Industries”. “During the last two months, we have shifted our strategy, focussing on our core market in Nevada and on our best-in-class cultivation infrastructure, making meaningful improvements that are already being realized. As a member of the Board of Directors, I will have the opportunity to further assist in strengthening the Company’s performance, while continuing to demonstrate my long-term commitment to the success of 1933 Industries as we grow our business into a profitable and respected entity”, Rosen added.