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1933 Industries making good progress with new products and management

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  • Cannabis company focused on the growing US legal cannabis market
  • New CEO and CFO appointed in 2020
  • Operates via two main subsidiaries

What 1933 Industries does:

1933 Industries is a vertically-integrated, growth-orientated company, focusing on the cultivation and manufacturing of cannabis consumer branded goods in a wide range of product formats. Operating through two subsidiaries, the company controls all aspects of the value chain with cultivation, extraction, processing, and manufacturing assets supporting its diversified portfolio of cannabis brands and licensing partners. The company owns 91% of Alternative Medicine Association LLC (AMA), and 100% of Infused MFG LLC.

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 industry legalization in a collection of US states and is focused on the high tourism Nevada market.

1933 Industries has two main subsidiaries. The first is Alternative Medicine Association (AMA), a licensed medical and adult-use cannabis cultivation and extraction subsidiary that produces its own branded line of unique cannabis-based products and manufactures third-party brands. With state-of-the-art cultivation and extraction facilities based in Las Vegas, Nevada, AMA seeks to offer medical patients and recreational users alike a cannabis experience that’s exceptional, potent, and consistent in quality. AMA’s products include craft cannabis premium tier bud flower, pre-rolls and concentrated cannabis products such as Cake Batter, Crumble and Sugar, Live Resin, Shatter, Diamonds; vape pens and distillate oil.  

The second subsidiary is Infused MFG, a Las Vegas-based manufacturer of hemp-based, cannabidiol (CBD) infused products. Infused MFG’s product line includes topicals, creams, vapes, elixirs, capsules, dabs, lip balms and pre and post-workout recovery sports products. The subsidiary manufacturers its products under its Canna Hemp brand, which utilizes the power of hemp and CBD to bring natural wellness.

In 2020, 1933 Industries appointed Paul Rosen as its CEO. Rosen is no stranger to the cannabis industry, having previously co-founded and served as CEO of PharmaCan Capital Corp that was later rebranded to The Cronos Group. The company also appointed experienced finance industry professional Tricia Kaelin as the company’s new chief financial officer.

How it is doing:

1933 Industries has made a brisk start to 2021.

At the start of February, the company reported that its company-wide total sales and open orders reached C$1.4 million in January, which it called a “significant milestone” as it continues to scale-up production from its state-of-the-art Las Vegas cultivation facility. 

The company also noted that its Alternative Medicine Association (AMA) cultivation subsidiary saw its revenue surge 113% increase year over year, which represents its strongest monthly sales to date since launching its AMA branded cannabis flower and pre-rolls in late August 2020.

At the end of December 2020, 1933 Industries had reported that its 1Q 2020/21 revenue rose by 13% quarter over quarter to $2.7 million, which it attributed to strong consumer demand following the launch of cannabis flower and pre-rolls in Nevada.

The company also noted that its 1Q net loss from continuing operations improved by 61% from 4Q 2020 to $2.8 million and said it is moving closer to profitability, while its adjusted EBITDA loss for the period shrunk by 81% quarter over quarter to $1.4 million.

1933 Industries said its 1Q 2021 gross margin increased to 27% from 3% during 4Q 2020, and it believes the availability of its high-quality cannabis flower cultivated in-house will increase demand for the company’s products, which it expects will have a positive impact on its gross margins going forward.

The company added that it anticipates increasing the volume of cannabis flower produced each month and remains on track to reach full output capacity by March 2021.

1933 Industries announced at the same time that its CEO Paul Rosen would also take on the role of chairman. It said Terry Taouss would resign as a director of the company effective January 30, 2021. In September, the company said Rosen had joined its board of directors, having also been involved with the company beforehand as not only CEO but also a strategic investor and an advisor.

On the product front, on December 30, 2020, 1933 Industries had announced the launch of a new e-commerce website for its Canna Hemp brand of hemp and CBD wellness products. With the goal of enhancing the user-experience, the group said the new website features more intuitive navigation and improved education to assist consumers select wellness products that suit their individual lifestyles and needs.

With an extensive product line that includes topicals, creams, vapes, elixirs, capsules, dabs, lip balms and pre and post-workout recovery sports products, the Canna Hemp brand utilizes the power of hemp and CBD to bring natural wellness. its flagship products, the Canna Hemp Relief Cream and Canna Hemp X Recovery Cream are recognized as best topicals in the market. All products are triple and third-party tested for safety with test results embedded via QR codes for traceability.

And on the financing front, in March 2021, 1933 Industries revealed that it had completed a recent oversubscribed financing bringing in over $5 million.

Inflection points:

  • Reach full cannabis flower output capacity
  • Further revenue growth from Alternative Medicine Association (AMA) cultivation subsidiary
  • Move to profitability

What the boss says:

In February’s sales update, 1933 Industries CEO and chairman Paul Rosen said: “As seasoned operators, we are pleased with the progress to date and we believe that the company has never been in a better position to achieve sustainable and profitable top-line revenue growth going forward.”

“Our execution strategy is completely aligned with our shareholders as we continue to build the business, utilizing our competitive advantages in operating large-scale cultivation to solidify a dominant position within our core market.We continue to believe that saleable flower will remain the largest cannabis category, hence our commitment to enhanced cultivation and branding,” Rosen added.

Contact the author at [email protected]

    Story by ProactiveInvestors


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