December 3rd, 2018
As the cannabis industry continues to rapidly expand, so do the opportunities to get in while the getting’s good. CannAmerica Brands (CSE: CANA) is an umbrella organization that owns several unique and innovative cannabis brands (including a variety of tasty gummies) across three states with plans for massive expansion over the next few years. The company recently announced it had entered into an agreement with Canaccord Genuity Corp. and Gravitas Securities Inc. to raise up to $10 million, by way of a private placement, in addition to its launch on the Canadian Securities Exchange in October 2018.
CFN Media spoke with CannAmerica Brands CEO Dan Anglin at the recent MJBizCon in Las Vegas to learn more about the company’s impressive growth and how intellectual property and acquisitions (not just gummies) are at the core of their business model.
CFN: CannAmerica Brands is so much more than an edibles company. Explain your business model and how you have achieved such success?
Dan Anglin: We are primarily known for our gummy confections but fundamentally, we are a cannabis oil-formulation company. Our ability to do precise dosing and large-scale production of gummies is what gave us success in Colorado and why we were able to expand our product offerings in Nevada. However, in Maryland sales of edibles are not permitted, so we went back to our roots of concentrates and we’re doing wax, shatter, full-spectrum distillate syringes and Rick Simpson Oil.
At our core, we are an intellectual property company that licenses our know-how, our expertise, our processes and provides supply chain logistics, as well as infusion equipment to licensees for a turn-key, large-scale production of a host of products. We have deep expertise in running a business compliantly and efficiently; this is what we provide operators, people who have gone through the trouble to get a building and obtain licenses, hire staff and put the basics into the facility, whether they’re vertically integrated or they’re a standalone processor. We’re bringing to the table industry knowledge along with all of our equipment, procedures, training and recipes, and providing that as turn-key opportunity for somebody with a facility to get into the vertical that they’re trying to get into, whether it’s vapor pens in Maryland or it’s edibles in Nevada and Colorado.
CFN: How does CannAmerica Brands work with existing license-holders?
DA: We offer opportunities for folks who are already in cannabis to broaden their exposure by co-branding our products so that their brand is present on the packaging. We’ve created an opportunity to jump right into working to create agreements between the licensee and ourselves that protect the brand and protect them and allow both of us to flourish, and our brands then penetrate that marketplace with the products we’ve created. That licensee will then have production in a vertical they didn’t have before, with our supply chain and our expertise. We’re bringing a lot to the table for them to increase their sales and their presence in these different verticals, while also getting to be a part of the CannAmerica Brands family, which has incredible recognition behind it.
CFN: What makes your brand acquisition strategy so attractive to potential partners?
DA: We are different in that we don’t want to buy the company—we want to purchase the brand. We then lease back your brand to you on a royalty basis. If you’d like to purchase your brand because you’ve got some sort of major acquisition happening and it’s something that’s stalling your company changing hands, we’d certainly sell the brand back to you at fair market value.
What we’re offering to companies that have interesting, successful brands is two things: a cash infusion based on the acquisition and then the opportunity to expand your distribution. It’s unique. I think there’s plenty of companies out there doing royalty loans and many other places with creative financing, but this is more direct. It’s a win-win on both sides.
CFN: What are your projections for growth in 2019?
DA: We plan to expand in every market that is available; growth is unlimited. Our next step is to start acquiring brands. We’re utilizing a reasonable approach of at least one new market a quarter, but I think as momentum gains we’ll have to build an army to deal with expansion into multiple states at once. Michigan is a primary target for us and as soon as we have the available capital, we will begin the brand acquisition. Illinois is going to make a push for recreational cannabis soon, so we are watching them closely as well. Illinois has a population of 13 million and Michigan has 10 million, so two huge markets right in the Midwest.
We’re also setting our sights on the CBD hemp oil space and we’re working on relationships here in the United States and in Canada to be able to do the same type of model that we have in the recreational cannabis space. It would give us more control over distribution into regular retail outlets and we’re exploring a number of different opportunities to take CannAmerica Brands’ success in the regulated confection side and bring that to the regulated CBD side.
CFN: What should potential investors know about CannAmerica Brands?
DA: We’re veteran-owned. I think that there’s a big movement right now to figure out cannabis access for veterans and I think that our voice in this is going to be pretty important and legitimate. I also think that it’s very important to understand that we’re building an army; the only way this company grows is the human capital. You’re investing in the people and so we’re making the right decisions in those people.
I think what we’ve been able to demonstrate most is successful penetration into multiple markets with strong sales for our licensees and the brand. We’ve proven that we have struck a chord with consumers, both in our product quality and our branding. The stock listing has proven to hold its value in the short time it’s been on the CSE, and with the anticipated expansions into new markets, as well as the plan to acquire more brands, CANA is a listing that’s here to stay. This is something investors should take notice of, because we are well on our way to successfully executing our international business model.
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About Rachelle Gordon
Rachelle Gordon is a Minneapolis-based writer. Find her online at www.rachellegordon.net.
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