October 16, 2019 MJ Shareholders
October 16th, 2019
App, Exclusive, News, Top News
There has been plenty of media coverage lately on e-cigarettes and vaping products, including restrictive regulation and flat-out bans on vape and nicotine products, spurred on by a series of mysterious deaths most attribute to black market products. Hidden underneath the legislation is the underlying fact that millions of people like to smoke and, according to some experts, outlawing said products is simply not going to work. It will just drive people back to smoking combustible cigarettes.
Against this backdrop, SinglePoint (OTCQB: SING) is banking on the trend for alternatives to cigarettes remaining strong, coupled with the growing awareness about hemp products. Judging by the reaction to the company’s new Pure American Hemp cigarettes launched this month at the 2019 National Association of Convenience Stores show (NACS) in Atlanta, management is charting the right course.
SinglePoint CEO Greg Lambrecht has a track record for knowing what will sell in America and how to capitalize on it. The SinglePoint chief executive has particular experience in the tobacco space, successfully launching Premium Cigars International with an emphasis on expansion through convenience stores.
Starting with one c-store, Lambrecht ultimately placed his company’s cigars in tens of thousands of locations and brought the company public on the Nasdaq exchange.
Lambrecht is following the same playbook for an even bigger market with hemp, a form of cannabis sativa that doesn’t contain (or negligible amount of <0.3% by law) THC (tetrahydrocannabinol), the component of marijuana that is responsible for the psychoactive effect commonly associated with the plant. Notably, hemp contains cannabidiol (CBD), the cannabis compound widely heralded for its medicinal benefits, including reducing anxiety, which makes it ideal as an alternative to traditional cigarettes. Equally important, hemp doesn’t contain nicotine or tobacco, which can be useful in helping people wean themselves off conventional cigarettes.
Hemp became legal nationwide in the U.S. at the start of 2019 with the passage of the 2018 Farm Bill in December, opening up roadways for interstate commerce.
Following the recipe for Lambrecht’s past success with cigars, the new pre-rolls (that’s the official word for hemp cigarettes) were on display at NACS this month. With scores of people wanting to check out the new smokes, Lambrecht commented, “It reminded me of the successful product introduction of Premium Cigars International and PrimeTime™ to the convenience store industry.”
Consumers Open Pocketbooks
The cannabis/hemp marketplace is emerging rapidly. The industry insight group Arcview Market Research and its partner BDS Analytics forecast that CBD sales in the U.S. will exceed $20 billion by 2024. While a bit more conservative, Cowen & Co. see CBD sales of $15 billion by 2025, figures that speak to the lucrative market that SinglePoint is addressing. Smokable hemp products are one of the fastest growing market segments, expanding by 250% from 2017 to 2018, according to the cannabis market research firm Brightfield Group.
To put the opportunity in perspective, consider that Grandview Research says the global cigar and cigarillo market size was valued at $16.99 billion in 2018.
As the cannabis/hemp marketplace matures, a price segmentation is occurring, with it becoming evident that consumers are willing to pay-up for premium products. According to Brightfield Group, a 2016 survey showed that more than one-third of cannabis users are willing to pay more for organic products. Another study by Brightfield in 2017 affirmed that the trend towards high-end product remains strong.
Furthermore, a 2018 study showed that consumers believe that cannabis products sold legally is superior to that sold illicitly. All of this data bodes well for SinglePoint launching its new hemp pre-rolls.
The Pure American Hemp pre-rolls are available in original and menthol in packs of 20 for $19.95. The products are aligned with consumer demand, being organically grown and made of 100% nicotine and tobacco-free hand-selected plants from U.S. family farms.
Cash Register Already Ringing
Speaking about the response to showcasing the Pure American Hemp product at NACS, Lambrecht summed it up in saying that the success “was beyond what anybody in our group imagined.” He added “It truly gave us deep insight to how large of an opportunity this is.”
NACS was a premier event to roll-out the product. SinglePoint prepped for the convention with a marketing blitz beforehand introducing the pre-rolls to thousands of buyers at convenience stores around the country. SinglePoint says there is interest from parties representing over 20,000 retail locations already as it taps into a market comprised of in excess of 150,000 c-stores. The company says it has already received “multiple” orders and will be following up with more people in charge of product procurement over the next 90 days to finalize purchase orders.
Likely feeling like he was back in the 1990s when he launched the cigar line, Lambrecht commented, “I am ecstatic to say that again we had people waiting in line to speak about our hemp cigarettes.” Given his past success, Lambrecht being ecstatic is plenty of reason for SING investors to be encouraged about what the new sales channel can mean to revenue, which more than doubled in Q2 from a year earlier to $856,859.
SinglePoint will next be meeting with potential buyers and showcasing the Pure American Hemp line at MJBIZCON in Las Vegas on December 11-13.
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About Ash Stringer
MJShareholders.com is the largest dedicated financial network and leading corporate communications firm serving the legal cannabis industry. Our network aims to connect public marijuana companies with these focused cannabis audiences across the US and Canada that are critical for growth: Short and long term cannabis investors Active funding sources Mainstream media Business leaders Cannabis consumers