CB1 Capital Management CIO Todd Harrison talks about what makes 1933 Industries Inc (CNSX:TGIF) (OTCMKTS:TGIFF) an important investment for CB1 Capital. Harrison discusses what he thinks the big stories will be in the cannabis space in 2019, including the possibility of banking reform in the United States. Harrison comments on the current acquisition growth strategy employed by many MSOs. He notes that while it is hard to extrapolate what brands will be successful, CB1 Capital is interested in management teams and companies with existing distribution footprints. Harrison discusses three phases of market moves (denial, migration, panic), suggesting that the cannabis space is still in denial, and believes that cannabis represents a longer tail secular bull market.
Transcript:
James West: Everybody on our chat group has been asking us to ask you about TGIF, 1933 Industries.
Todd Harrison: Okay, sure. So you know, 1933 is a company that, you know, we own a big slug of stock, we’ve owned the stock for some time, largely because we think it’s real attractive. Their brands are great; CannaHemp, and certainly we think the stock is attractive, that’s why we own a lot of it. And then working with the company, we identified some synergies that would allow us to advise them and help them, through some strategic relationships, and certainly, you know, we couldn’t be happier. We’re big fans of the company, we’re big fans of the team, and so far, so good. It’s a good alliance for us, and we think it’s going to work out well for everybody.
James West: Sure. So the team that launched 1933 Industries recently launched a company called Weekend Unlimited, which won the symbol POT. Are you invested n that company as well?
Todd Harrison: No, not right now. You know, 1933 is our vehicle, and certainly we’re working with them on a range of different initiatives right now. So it doesn’t preclude anything in the future, but you know, right now, that’s what it is.
James West: Sure. 1933 Industries is focused primarily on US markets, correct?
Todd Harrison: Yeah. Their hemp brands are certainly focused on US markets; they have a pretty good operation in Nevada, which was actually what initially attracted us to them. You know, the Nevada market is pretty robust, and their brands are doing pretty well out there. So you know, one of the things that we look for at CB1, and we’ve been doing this for some time, now, is, because Wall Street doesn’t have a presence, you know, in the space yet, there’s a lot of inefficiencies, certainly, that exist that wouldn’t otherwise exist if Wall Street had a more ubiquitous presence, as we believe they will in the years to come, if not the months to come.
So certainly, we think that as Wall Street adopts, institutions do the work and run the numbers, a lot