About Jeremy Szafron:
Mr. Szafron has years of experience in the financial markets as both a private investor and a business journalist. He has been actively involved in the cannabis space, considered one of Canada’s first cannabis journalist, covering everything from medical research to public and private companies.
The California Market:
“The regulation process in California has been a setback, but we wanted to do it right”
California has always been and remains to be a very important economic hub, with a population of 39 million people, it’s not hard to see the opportunity within the cannabis space. If California was a country, it would rank the fifth-largest in the world by GDP. LDS is well positioned in this new regulated market, with a real focus on compliance and navigating the new regulations that have shuttered many companies. These additional compliance costs have put some California vendors and cultivators either closing up shop or scrambling to get their licenses approved. When I toured the LDS facility (three times now) I was pleasantly surprised by their commitment to compliance, mitigating risk for the shareholders. LDS is also well positioned to be granted more licenses, a process that has been difficult for many. The company has suffered setbacks because of the new regulations, but the setbacks were just time and most of those issues have been ironed out quicker than most allowing a bright future.
Here is a good article on the California market: http://www.visualcapitalist.com/california-cannabis-golden-opportunity-unique-challenges/
An another I thought had some good insights about the regulation changes in the California market: http://www.cannabisbusinesstimes.com/article/cannabis-businesses-stay-compliant-california/
The Concentrate Market:
You’ve likely heard it before, “we make the best oil.” In fact, I hear this too much. Its LDS’s goal to take over the segment with white-labeled distillate at the purest quality. After touring LDS’s Adelanto Facility, I was blown away by the precision and execution of their extraction process. In fact, with the teams latest tweaks and the addition of the second machine, they essentially are running 24/7 at a better rate of speed than ever before. When LDS’s live resin started to win awards and get fanfare, many people asked if they were headed in the oil business. A new report from ArcView Market Research and BDS Analytics confirmed that the concentrate market has outpaced both flower and edibles and shows no sign of slowing down. LDS thrives at producing concentrates— its big money too, one liter can go for as much as $10 000. Concentrate sales are projected to hit $8 billion by 2022, based on data collected through the research companies GreenEdge. To put this into perspective, now that LDS has received and complied to their various licenses the approach seems to be working, releasing over $900K worth of revenue in October and on track for significant growth monthly. Its worth noting that they have recently put one more extraction machine in operation, doubling their capacity. I also saw a few extraction vats, similar to those from breweries, waiting to come online. Focusing on this market can offer decreased production costs and increased profits, as this eliminates the need to trim/cure. LDS has just been granted its transport license (October 2018) and has already accomplished transporting over two million dollars of biomass to date. It’s important to note that with LDS’s distribution license, they can also provide those services to the whole industry. Simply put, LDS cannot make enough, fast enough, for their demand. Not a bad problem to have in the fastest growing segment of the market.
Award-winning brands & marketing advantage:
You can look to any mature market to see that it’s not just about the flower and oil anymore. Consumers are demanding discrete and easy ways of delivery, and that happens to be what LDS does best. For a company like LDS, it was important to have a strategy of getting their consumer brands onto shelves, helping with brand recognition and building a base of loyal followers. Rēveur was the brand that started it all, an award-winning live resin essentially responsible for the team to then turn their attention to producing the “Rolex” of distillate.
CannaStrips is a sublingual cannabis strip that is revolutionizing the industry with its nano-technology delivery system. Much like a breath strip, CannStrips is consumed by placing it near the dental gum line and the body will absorb its ingredients through the bloodstream, resulting in quicker and longer lasting benefits.
Many who suffer from insomnia, chronic pain, anxiety, or high stress are using CannaStrips as an alternative way for cannabis consumption; one that is non-invasive, convenient, and effective.
It’s worth noting that packaging regulations have changed four times now, and the company has done its best to not only adhere but to lead the way in execution with compliance as one roll of packaging is about 500K CannaStrips— and they have four SKU’s.
Rêveur is a California cannabis product and lifestyle brand catering to the modern day female consumer – trendy, professional, urban, and sophisticated.
The team plans to disrupt the industry by launching a diverse range of products developed with the highest quality of ingredients, technology, and science for proven results. Backed by a female team in business, research, and marketing, Rêveur will touch on all cannabis product verticals including concentrates, edibles, skincare, and beauty.
Rêveur’s flagship product, live resin extracts, launched in 2018 as a collection of 18 flavonoid profiles and will be available for purchase at licensed retail locations throughout California, and is already available in Beverly Hills (Smart Weed).
I like to think of this product as a very high-end concentrate that is so good its interrupted the market to show what LDS can do. Similar to that of their distillate— it’s simple, very high end.
State of the art facility and equipment:
I would argue that the LDS facility is the most advanced from what I have seen in the state. Water is a huge issue in California, as you may have known, and LDS does a great job at water retention. They have a reverse osmosis system that allows them to essentially repurpose all of their water, all these savings add up. I also noticed three water tanks for backup, providing some relief in case of something happening. As for the extraction process, a lot of companies waste tens of thousands of dollars worth of product simply by cleaning equipment improperly. Think about it— all those hoses, the large glass beakers etc. I was taken through the process of their cleaning with alcohol and was blown away by the amount of product they have saved simply by the process.
LDS also has 12 state-of-the-art genetic rooms. I had a peak a few weeks back and am very excited to see what these rooms can do.
Disclaimer: Always do your own due diligence and consult with a licensed investment professional before making an investment. This story should not be used as a basis for making any investment.