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1933 Industries: DEEP DIVE

1933 Industries is tapping into the Silver state, as a new era dawns in cannabis

1933 Industries is progressing with plans to launch one of Nevada's largest hemp extraction facilities, amid a flurry of other activity
OVERVIEW: TGIF The Big Picture
1933 Industries is bolstering its footprint in Nevada, with a new cultivation facility and a new hemp processing facility
  • Well-positioned to take advantage of the blossoming US cannabis market

  • Has expanded in Nevada, with new cultivation facility and new hemp processing facility

  • Seen strong sales from hemp-based, CBD products to over 600 retail locations around the US

  • Poised to capitalize on the hemp/CBD rush

1933 Industries (CSE:TGIF) (OTCMKTS:TGIF) is a cannabis company with operations in the United States and Canada. Operating via three subsidiaries, 1933 owns licensed medical and recreational cannabis cultivation and production assets, hemp-based, CBD infused products, CBD extraction services and a specialized cannabis advisory firm, that supports clients in security, intelligence and due diligence.

As for the name? 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 end of cannabis prohibition in Canada and industry legalization in a collection of US states.

Vancouver-based 1933 Industries has three subsidiaries. One is Alternative Medicine Association LC, a licensed medical and adult-use cannabis cultivation and production facility in Las Vegas that produces its own line of products and manufactures other company’s brands. AMA’s products include concentrates such as Cake Batter, Crumble and Sugar; a vape pen sold with distillate oil; and several flower strains. 

With more than 42 million visitors each year, Las Vegas is poised to become one of the world’s largest adult-use cannabis markets and 1933 is well-positioned in the silver state. The firm is aiming to establish its foothold in several different parts of the value chain in the North American medical and adult-use cannabis industries and replicate its model in other jurisdictions.

READ: 1933 Industries increases capacity at Las Vegas hemp extraction facility

Another subsidiary is Infused MFG, a Las Vegas-based manufacturer of hemp- and cannabidiol-based medicinal and skin care products. In March, 1933 Industries acquired Spire Global Strategy, an advisory firm in Vancouver that helps client businesses stay secure, compliant and competitive. The company focuses on four areas of concern for cannabis companies: international production, sales and import-export licensing agreements; domestic licensing; public policy development; and design of large-scale hemp, cannabis and cannabidiol projects for clients.

How it is doing

1933 Industries has had a busy 2019, expanding its capacity. The firm is ramping up cultivation to achieve full production capacity at its new facility -- a newly built 67,750 sq/ft cultivation facility in Las Vegas. The facility is divided into five different zones with 15 bloom rooms and four veg rooms. 

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. Once at full capacity, it’s anticipated it will produce 700 to 800 pounds of flower monthly.

On a management level, at the end of May, Chris Rebentisch, the cannabis wellness company’s former US chief operations officer, has stepped into the role of CEO, effective June 17, with former CEO Brayden Sutton remaining chairman of the board. Rebentisch founded Infused MFG, a 1933 subsidiary, and developed the intellectual property for its Canna Hemp brand. He has also overseen Alternative Medicine Association, the company’s tetrahydrocannabinol (THC) subsidiary.

Branding an important segment

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. 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.

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.

Hemp processing facility moves forward

The firm is also establishing a new hemp processing facility in Nevada, to produce CBD extracts for full spectrum oils, distillates and isolates. It's one of the largest in Nevada, and the company has invested heavily in the design of its customized equipment to provide maximum capacity and efficiency.

During the last year, demand for hemp/CBD products has significantly increased and this is a trend that is expected to continue, especially after passing of the 2018 Farm Bill. This is good news for 1933, which is poised to capitalize on the demand having spent years building a foundation in the space. The firm has a strong foothold in both legalized cannabis from cannabidiol (CBD) and tetrahydrocannabinol (THC) products.

Inflection points

The firm is blazing new trails as it continues its expansion, notably its new lab facility for secondary extraction, distillation, isolation and purification of CBD for bulk sales to other product manufacturers and for internal use, which could have a signfiicant impact on its bottom line. 

There is a compelling opportunity in hemp-derived CBD and high-quality CBD-branded products, building on the strength of already strong sales from its hemp-based, CBD products to over 600 retail locations around the US, with room to grow. 

"As the first entrant into the legal cannabis market in Las Vegas, we have been able to leverage our early mover advantage to establish our brand, secure our distribution and gain market share,” Rebentisch said in a statement. “We are the largest single supplier of branded goods in Nevada and sell our CBD line in 46 states. We have a strong sales force, education and brand ambassador programs, and licensing agreements for white-label production. We are in the process of building and expanding our assets to support our brands and boast the capacity and ability to deliver over 100 products to an undersupplied market."

Contact Katie Lewis at [email protected]

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