Nevis Brands (CSE:NEVI, OTCQB:NEVIF) CEO John Kueber talked with Proactive about a major new distribution agreement and the company’s strategic growth plans. Kueber explained that Nevis Brands has signed an agreement with ZT Distribution, a well-established distributor in the Midwest United States.
This deal will allow Nevis Brands to place its hemp-derived THC beverages, including the Happy Apple line, into nearly one thousand grocery and convenience stores across states such as Wisconsin, Minnesota and Illinois.
Proactive: All right, welcome back inside our Proactive newsroom. Joining me now is John Kueber. He is the CEO of Nevis Brands. And John, it's good to see you again. How are you?
John Kueber: Doing great. Thanks for having me.
Yeah. So a couple of pieces of news I got to talk to you about. First off, just off of the wire. Very exciting news that you've signed an agreement with ZT Distribution. Talk a little bit about making your product available in what they have—almost a thousand grocery stores. Incredible.
Yeah. It's a really pivotal deal for our company. In the past, we've mostly operated within the dispensary market with our product. Major, hemp-derived THC really opens up a whole new world to us where we're able to sell cannabis products in the same places where you'd find soft drinks, groceries, fruit, etc. ZT has a long, storied history—over 100 years—very well established, very well-respected distributor in the Midwest United States. We couldn't be happier to be partnered with them. It's a big moment for us.
Yeah. We're talking about Wisconsin, Minnesota, Illinois, places like that. So talk to me a little bit about demand and where you feel this product will do very well in those particular markets. Are you seeing some sort of word on the ground of why this is so key?
Yeah. For some of your viewers who aren't familiar with the US dynamic with cannabis, you have the dispensary market where people show driver's license, identification, etc., like people in Canada are used to as well. It's sort of like going into a liquor store. It's a very controlled environment. With hemp-derived THC, these are low-dose cannabis beverages. But in many parts of the United States, it's treated in a very similar way as beer. I think it's a good comparison. So what's happening is really this mass acceptance and destigmatization of cannabis in many parts of the US. And, you know, we're not the first brand to be going into Wisconsin and Minnesota and so forth. This is a bigger trend that, thankfully, we're a big part of.
Yeah. And as I mentioned, grocery stores but also independent retailers and convenience stores, I imagine, as well. If you've been to the United States and into a convenience store, as you said, you can buy beer and things like that. So there's obviously demand in the market there. When do you expect these products to be available?
We are producing our second run of Happy Apple. We've been producing a five milligram version. There's a ten milligram version which is more suited for this market. That production is happening in the first week of August. We're hoping to have our initial purchase orders in mid-August and be in market. We're excited with a whole new range of other marketing opportunities—people doing demos, endcaps in stores, things along those lines. So again, more of a CPG-style endeavor for us, less of a controlled environment. The one thing I just might add is it's a shift for us in our financial model. In the past, we've only been collecting royalties on our products. This is something where we actually control the production, control the wholesale pricing, and collect the top line of the wholesale revenue. We think it could have a strong impact on our financials going forward.
Okay. Speaking of those, you just released your second quarter financial numbers, seeing quarter-over-quarter revenue growth. You had some one-time payments within there as well that kind of skewed the numbers in a certain way. So overall, you're pretty happy with where you're at?
Pretty happy. We saw some modest growth. Unfortunately, what's happened with the US dollar over the last three months—for us, we earn in the US, we translate our results into Canadian dollars. While we grew revenue and grew some EBITDA, we actually got hit with a decent charge on the translation. So hopefully that's a one-time thing. Hopefully the currencies are stabilized, but that was the one drag on an otherwise decent quarter.
And you mentioned in your last answer about really trying to keep an eye on cost disciplines and also trying to really drive the EBITDA part of it. Those are the things that you have goals for the next quarter, right?
We think that's the name of the game in cannabis. I mean, you know, the hype in the cannabis segment is not what it used to be, as we all know. We're really being fiscally responsible. We're focused pretty heavily on cost management. But at the same time, this opportunity to grow some of our top-line revenue is pretty exciting.
Quotes have been lightly edited for clarity and style