1933 Industries Financial Results: Extracting Optimism

1933 Industries Inc. (CSE:TGIF), one of the U.S. cannabis stocks, reported its third-quarter 2019 financial results recently

SmallCapPower | July 5, 2019: 1933 Industries Inc. (CSE:TGIF) (OTCQX:TGIFF), one of the U.S. cannabis stocks trading in Canada, announced Q3/19 financial results on July 2, 2019, before markets opened. While results came in below analysts’ expectations, the long-term outlook for 1933 Industries remains robust, due primarily to the Company’s exposure to the Nevada market, CBD wellness market, and expanded production capacity.

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TGIF reported $4.6M in revenue and an adjusted EBITDA loss of $2.8M during its third quarter, compared with analyst expectations of $5.7M and $0.4M. Results for the quarter were lower than expected due to lower gross margins. Gross margins for the period were down 24.8% from 56.1% in the previous quarter. The decrease in the gross margin percentage is due primarily to increased purchases of third-party biomass to produce concentrates and final products.

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1933 Industries is expecting gross margins to improve significantly when its 68,000 sq. ft cultivation facility and 12,000 sq. ft extraction facility come online within the next few weeks. On July 3, 2019, the Company announced that construction at the facility is complete, and it will commence operations by transferring 5,000 clones and 200 mother plants, as soon as the transfer of its cultivation license is complete. The facilities are expected to yield ~4,000 to ~4,300 kg of dried flower annually, with an extraction capacity of 2,400 litres of cannabis oil annually. Going forward, we are expecting TGIF’s CBD business line to drive a greater share of revenues, as the CBD wellness products are currently being distributed in 46 U.S. states. The Company also operates a CBD/hemp extraction lab to produce full spectrum CBD/hemp oils, distillates and isolates with monthly target processing of 68,000 kg of CBD/hemp biomass.

About 1933 Industries

1933 Industries Inc is a vertically-integrated cannabis consumer packaged goods company with operations in the U.S. and Canada. TGIF has three main differentiators:

  1. Innovative Branding and Packaging, with a robust product pipeline of over 100 SKUs, including dried flower and premium cannabis concentrates, such as shatter, crumble, sugar wax, moon rocks, and diamonds.
  2. Proprietary hemp and CBD wellness products for alternative health fanatics with Canna Hemp,TM which is the Company’s line of full spectrum CBD elixirs, tinctures, vapes, topicals, and capsules. As well as Canna Fused,TM the Company’s line of 1:1 THC/CBD products, Canna Hemp X,TM a line of CBD pain relief products for athletes to focus on recovery and wellness, and Canna Hemp Paws,TM CBD nutritional supplements for pets.
  3. Distinction of being the first medically-licensed cultivator in Las Vegas, which is home of 46.1M tourist annually, according to the Company. Nevada is expected to have cannabis retail sales of $1.0B by 2022. The Company announced it has applied for a retail cannabis store in Clark County, Nevada, in December 2018.

Canna HempTM

Source: Company Presentation

Canna Hemp XTM Sports Relief

Source: Company Presentation

Canna Hemp PawsTM

Source: Company Presentation

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