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  • Writer's pictureTed Ohashi

Add 1933 Industries (CSE: TGIF) to your portfolio now

Recently as part of my ongoing due diligence process, I had the chance to visit 1933 Industries’ (CSE: TGIF) (OTCQX: TGIF) in Nevada. I was very impressed with the growth potential that is about to be unleashed a few months from now.

1933 Industries a licensed cultivator and producer of cannabis flower and concentrates and manufacturer of hemp/CBD wellness products, reports that construction on its new cultivation facility nearer the outskirts of Las Vegas is nearing completion and awaiting a hook up to the electrical grid.

The current facility is close to the Las Vegas strip. You can see some of the taller buildings on the strip from the facility. The location is in an older industrial park and as you enter you can see that the facility expanded to the nearest space available that was practical.

These are some of the current facility that illustrate how crowded it has become. As you walk from room to room, you have to turn sideways to pass people in the hall. The pictures below show how little growing space they have. The pictures are at somewhat inconvenient perspectives because we did not want to cause any contamination. Some of the space is being used to grow seedlings that will be moved to the new building in the next couple of months.

TGIF has three distinct operations. First is Alternative Medicine Association (AMA) that owns and operates a licensed medical and adult use marijuana cultivation and production facility in Las Vegas, Nevada and produces its own line of cannabis-based extracts including shatter, live resin, wax and oils including vape oils, flavoured vape oils, terpene enhanced oils, and clear distillates. It also manufactures other third-party brands of similar products. AMA is the business that is being moved to the new facility. In the first quarter ended October 2018, AMA contributed 48.9% of revenue. Second, Infused MFG provides legal hemp-derived and cannabidiol (or CBD) products. Infused and the Canna Hemp brand have shown strong growth and success in Nevada, California and Colorado. After the passage of the Farm Bill, 1933 made a series of strategic alliances with growers that will supply the company with hemp. Infused MFG announced plans to begin processing hemp into CBD extracts for the production of an array of oils and other products. CBD production by Infused from hemp is expected to increase ten-fold when the new facility comes on stream. Infused MFG contributed 49.3% of first quarter revenue. Third, Spire Global Consulting is a consulting company that provides services related to security, intelligence and due diligence. Spire Global contributed 1.8% of first quarter revenue.

There isn’t much to see in the new location. What they have is a state of the art, purpose-built 67,750 sq. ft. cultivation facility that has been developed as a two-story building on 1.39 acres. This building is expected to receive its occupancy permit on March 25, 2019. The most important event between now and then is the Nevada Power hook up to the electrical grid. The equipment and plants will start moving virtually right away. If all goes as planned, the first crop will be ready for harvest in June 2019. Immediately next door is a newly constructed 12,000 sq. ft. building that will handle the processing of the biomass. These buildings should be ready to process in July. Behind these buildings is additional land 1933 owns for future growth.

The company estimates that starting in July and August, the new facility will be able to generate a ten-fold increase in cultivation and production. Looking ahead, 1933 Industries can sell everything it can produce. By the early part of the second half of 2019, I think the market will be stunned at the level of sales TGIF is generating. As a result, now is the time to add a strong position in 1933 to your portfolio.

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