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  • Writer's pictureTed Ohashi

Management changes at 1933 Industries (CSE: TGIF)

Last week, 1933 Industries (CSE: TGIF) announced Board and management changes and provided a corporate update. Chris Rebentisch has been appointed Chief Executive Officer responsible for overseeing operations going forward. Brayden Sutton remains Chairman of the Board of Directors.

Terry Taouss has been appointed to the Board of Directors while Andrew Richards has stepped down as Director. Steve Radusch has been named Chief Financial Officer taking over from Ryan Maarschalk.

Mr. Sutton is a distinguished figure in the cannabis sector with over a decade of experience as a builder in the cannabis space having worked from inception with some of the most recognized names such as Aurora Cannabis and The Supreme Cannabis Company. Under his leadership, Mr. Sutton led the development of 1933, raised the required capital and built 1933 with sustainable, scalable profitability as the primary goal. Sutton’s vision and knowledge of the opportunities and trends in the cannabis space in the U.S. and Canada will continue to be utilized as 1933 advances to the next growth phase.

Mr. Rebentisch founded Infused MFG. in 2017 after personally developing the intellectual property for its line of hemp-based, CBD Infused consumer branded goods. Mr. Rebentisch has been responsible for managing 1933’s THC subsidiary, Alternative Medicine Association and has overseen its expansion initiatives and product growth across the US.

Mr. Radusch is a seasoned accounting and finance specialist with over 25 years of experience in financial operations, cash management, corporate restructuring, debt and equity financings, mergers and acquisitions and public company reporting. He most recently served as CFO for a licensed cannabis company in Nevada, where he guided that company in its preparation for an eventual exchange listing. Radusch also served as acting CFO/Controller for divisions in both a $100+ billion Fortune 10 company and a $7 billion Fortune 500 company.

1933 welcomes Terry Taouss as an independent Director. Mr. Taouss is an entrepreneur with operational experience scaling fast-growing businesses and is currently a Principal of AdProfs. He previously served as President of Tidal Royalty Corp., a publicly-traded cannabis financing company. Prior to that Taouss was part of the founding management team at SiteScout, an advertising technology company that he helped profitably lead through its acquisition in 2013. He subsequently served as the Managing Director of Centro Canada and was a member of the Centro executive team, helping guide strategy for the company's broader technology and services offering. Mr. Taouss is a member of the Law Society of Ontario.

Corporate Update: AMA reports it received a Temporary Occupancy Permit for its cultivation facility, triggering the next round of required inspections. The purpose-built facility has fully automated irrigation and fertigation systems and climate controlled rooms and is being readied to accept thousands of clones in order to meet full production targets. AMA has begun to install equipment in preparation for the move.

Well-known for its craft concentrate products, AMA will expand its extraction footprint from 500 sq. ft. to over 14,000 sq. ft. Distillate production capacity is expected to increase from 40 liters per month to 200 liters per month, therefore increasing the Company’s ability to deliver its branded product line to an undersupplied market. The extraction facility will include a commercial cannabis kitchen for the production of edibles and beverages, expected to be operational in the fall of 2019.

1933 has received engineering designs for the proposed hemp extraction and processing facility, which once approved, will allow the Company to move forward with the procurement of equipment for the facility. The hemp extraction facility is designed as one of the largest in Nevada.

The nationally recognized Canna Hemp™ brand resonates with customers seeking the benefits of CBD and hemp. Canna Hemp™ products represent the fastest growing segment of 1933’s consumer branded goods and are available in over 700 retail outlets across the US. Infused reports it has increased its production space by moving its operations to a 14,000 sq. ft. facility with capacity for over $3M worth of inventory per month. Canna Hemp™ continues extensive product distribution.

Chris Rebentisch, CEO, says “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. 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. The management and board reorganization will position the Company for future growth and shareholder value creation as we seek to increase CBD product distribution across the country, secure the supply of raw materials and focus on multi-state and international expansion.”

Conclusion: given the management changes and corporate update, the picture for 1933’s near term future is clear. The Company is entering a period of sales growth that should continue for at least the next two years. The Canna Hemp™ branded products will be distributed through 700 retail outlets in 48 states. As the stock price chart shows, TGIF has held up well during the current market correction. In fact it has bucked the downtrend in cannabis stock prices. With the stock establishing a current market cap in the range one times 2020 revenues, it is no wonder. Now is the time to buy this stock.

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