The United States cannabis market represents a massive opportunity and during the last year, we have noticed a significant increase in the number of companies that are focused on this burgeoning market.
One of the trends that we find to be interesting as it relates to the companies that are focused on the United States cannabis market pertains to the lack of emphasis on the international cannabis opportunity. When compared to the companies that are capitalizing on the Canadian cannabis industry, there is a much larger focus on the international cannabis opportunity, and we are more favorable on the United States companies that are levered to the burgeoning international opportunity.
Over the next year, we expect this trend to change as we should see a much larger focus on the international cannabis opportunity as compared to the United States cannabis companies. We have been focused on identifying United States cannabis companies that have been ahead of the curve when it comes to the international opportunity and want to highlight a company that has been executing on this.
The company, Vapen Mj Ventures (VAPN) commenced trading on the Canadian Stock Exchange (CSE) yesterday. When we first became aware of Vapen, the company was primarily focused on Arizona’s medical cannabis market. We are impressed with how Vapen’s management team has advanced the business since then.
Vapen: A Cannabis Concentrate Growth Story
Vapen is a leading medical cannabis concentrate brand in Arizona and is sold out of a majority of the 100+ dispensaries in the state. Earlier this year, Select, a leading cannabis concentrate brand in California, was acquired for approx. $1 billion and we are favorable on the implications that this has on leading cannabis concentrate brands in the United States.
Over the next year, we expect the trend toward cannabis concentrates to become even more significant and believe that cannabis infused products or edibles will be the primary driver of this growth. By 2022, the cannabis concentrate market is expected to be generating approx. $8 billion in retail sales. This represents a massive opportunity for companies like Vapen.
Going forward, we expect the cannabis concentrate sector to record massive growth and this is an area where investors need to be focused on. In the United States, cannabis concentrates represent approx. 26.6% of the entire market with the sector gaining market share at a rate that is faster than any other type of cannabis product.
Working to Become a Global Cannabis Concentrate Leader
Vapen has been capitalizing on the cannabis concentrate market and in 2018, recorded $8.4 million in EBITDA on $24 million in revenue. When compared to 2017, Vapen reported strong growth and we expect this trend to continue in the years ahead. We expect the multi-state opportunity in the United States as well as the international cannabis opportunity to be the primary growth drivers on a go-forward basis and will monitor how the team executes on this.
Vapen is currently working to expand outside of Arizona through multi-state revenue and profit-sharing agreements. The company is in negotiations with license holders in California, Nevada, Oklahoma, and Massachusetts, and we will monitor how the team is able to execute on these market opportunities. We are bullish on these markets and expect the entrance into these markets to be a major catalyst for the business.
When it comes to the international cannabis opportunity, Vapen is highly focused on the cannabidiol (CBD) market and we are bullish on this. The focus on the CBD opportunity will make it easier for the company to set up operations in international markets and will provide the infrastructure to expand into THC products when they are legal in the respective international market.
Currently, Vapen is manufacturing CBD for its international brand in Jamaica and is planning to distribute these products in Canada and in a number of South American countries. The company is also one of the few companies to be focused on the CBD opportunity in Japan and plans to distribute its products in this market.
During the last year, we have taken a deep dive into the United States and the international cannabis opportunity. We believe that Vapen has had its finger on the pulse of this opportunity and are favorable on the markets that it is targeting. Over the next year, we expect to hear about significant advancements related to the cannabis opportunity in the United States and abroad. We are bullish on the growth prospects associated with these opportunities and will monitor how the team executes on this.
A United States Expansion Story
One of the reasons we are excited about the Vapen expansion opportunity is due to the strategy that is in place. The company plans to identify existing medical cannabis license holders that have retail and cultivation operations. Once identified, Vapen will propose a strategic alliance with the respective operator as it relates to the extraction and the Vapen brand. Once the operator agrees to certain agreements, the new operation will manage the wholesale distribution to dispensaries in the state and engage a trained sales staff.
The process that Vapen has is precise and targets a certain type of operator. Once an agreement is finalized, the company expects to receive a majority of the revenue and profit (50% to 60%) and we are favorable on this structure. During the last year, we have seen a significant increase in the number of United States cannabis retailers and the market has become very competitive. This creates a significant opportunity for Vapen to help operators in strategic cannabis markets revamp their business.
One of the reasons we are confident in Vapen’s ability to expand is due to the management team that is in place. We believe that the company is led by an executive team that has a proven track record of success and are favorable on this aspect of the business. We are favorable on the management team’s ability to create value for shareholders as well as the cannabis markets that it is focused on.
Arizona represents a great market to initially be focused on and we are favorable on the company’s ability to be successful in this market. Arizona is the third largest medical cannabis market in the United States, and we expect the recreational cannabis market to open after the 2020 election.
If recreational cannabis legislation is approved in Arizona, this will prove to be a major catalyst for the cannabis concentrate brand and we will monitor this opportunity. Vapen plans to expand into markets that already have a recreational cannabis market and we are favorable on the growth prospects associated with this.
When looking at the markets that Vapen is looking to expand into, we are most excited about those in California and Nevada. These markets neighbor the state of Arizona and represent massive cannabis opportunities. In these markets, demand for cannabis concentrates has been significant and we are bullish on this opportunity for Vapen.
An Emerging Opportunity to be Watching
During the last year, Vapen has been nothing short of an execution story and has been rapidly expanding its position in the United States. When it comes to the international opportunity, the company has massive growth prospects and is well positioned to capitalize on the increasing demand for CBD oil.
One of the reasons we expect Vapen to be successful is due to its multi-faceted growth strategy and premium product offering. The company has been working with several world renowned celebrity influencers (i.e. Cardi B, Offset, French Montana, G-Eazy, and more) and we expect these relationships to help generate awareness in the new markets that it enters.
Vapen has significant catalysts for growth and is led by a management team that is focused on execution. The company offers a premium product line and has done an incredible job when it comes to executing on the Arizona medical cannabis market. Going forward, we expect to see Vapen enter new markets and expect revenue numbers to ramp higher.
The cannabis concentrate market represents a massive opportunity and we are favorable on the opportunity that Vapen has to be successful. To learn more about the leading United States cannabis concentrate company, please email email@example.com.
Pursuant to an agreement between StoneBridge Partners LLC and Vapen MJ Ventures we have been hired for a period of 180 days beginning May 13, 2019 and ending November 13, 2019 to publicly disseminate information about (VAPN) including on the Website and other media including Facebook and Twitter. We are being paid $6,500 per month (VAPN) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero (0) shares of (VAPN), which we purchased in the open market. We plan to sell the “ZERO” shares of (VAPN) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (VAPN) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
Published at Tue, 14 May 2019 11:40:42 +0000