Consolidating California’s Cannabis Industry
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High Hampton Holdings Corp (CSE:HC,OTCMKTS:HHPHF, FSE:OHCN) is a consumer-driven cannabis brand and distribution company with vertically-integrated operations in California, serving the recreational and wellness markets. The company offers distribution, branding, manufacturing, processing and cultivation services in California’s cannabis industry. Using its experienced management team, the company is acquiring properties, licensed distributors, cultivators, and other key brands in the industry.
Distribution is a key factor in establishing a leading presence in California and as such, the company’s priority is to establish a distribution network across California. To date, High Hampton has acquired 420 Realty, a company with vertically-integrated operations on the outskirts of Los Angeles. 8 Points Mgmt and its subsidiary Bravo Distro will form the basis of the company’s distribution services.
High Hampton has acquired leading cannabis edibles brand, CaliGold, and a Californian licensed extraction/manufacturing company, Mojave Jane LLC, to develop a variety of branded cannabis products for the adult-use and wellness markets. Both companies develop a variety of high-quality products in-house using raw materials from High Tide’s cultivation facilities. Most of the manufacturing will be completed at Mojave Jane’s 2,500-square-foot facility in Coachella, California. The facility will produce approximately 115 liters of cannabis extracts per month and is expected to generate $1 million in monthly topline revenue.
High Hampton possesses a skilled management team with strong cannabis, political, legal and capital markets background. Chairman of the Board and Director Richard Polanco is a former California State Senate Majority Leader. Polanco brings a wealth of legislative experience and political connections to the team. Polanco was a founder of the California Latino Legislative Caucus, a career advocate for medicinal cannabis, and an active proponent for Proposition 64.
- Established distribution network through 8 Points Mgmt LLC and 420 Realty acquisitions
- Obtained six temporary licenses that cover cultivation, processing, non-storefront retail, manufacturing and distribution for Cudahy location in Los Angeles County
- CaliGold and Mojave Jane facilitate brand strategy for adult-use and wellness cannabis markets
- Minority investment in the 2083 Group, conditional on execution of a definitive agreement, provides access to real time consumer data
- Veteran management team with over 30 years of combined cannabis experience
- Chairman and Director Richard Polanco is a former California State Senate Majority Leader
The US & Californian Cannabis Market
North American cannabis sales grew to $9.2 billion in 2017 and the market is anticipated to reach $47.3 billion by 2027.
The California medicinal cannabis market alone provides cannabis producers a solid foundation for profitability, with a reported market size of $2.81 billion in 2016. Medicinal cannabis has been legalized for 20 years in California, making it a mature market with approximately one million medical patients. That is seven times the size of the medical market in Canada and a third of the size of the legal market in North America. With the Baby Boomer population slated to double between 2015 and 2030, California’s medicinal market has significant room for growth.
Through its subsidiaries, High Hampton has gained access to a highly-lucrative and rapidly-growing market. The company plans to actively buy up land and buildings located in cannabis-friendly municipalities, engaging in both royalty and leasehold agreements with tenants.
Understanding that distribution holds the key to becoming a leader in California’s cannabis industry, High Hampton has been conducting acquisitions in the distribution space.
8 Points Mgmt
In July 2018, High Hampton closed the acquisition of 8 Points Mgmt and its subsidiary, Bravo Distro LLC, which holds a distribution hub in west Sacramento. The company was founded by a team of alcohol distribution experts that also conceived one of the first companies in California to receive a permit for medical cannabis wholesale logistics, distribution and transportation.
Through Bravo Distro, the company offers services tied to sales, marketing, transportation and supply chain management for cannabis companies in California. Customers include dispensaries, delivery services, manufacturers, cultivators, as well as emerging players in the CBD space including clinics, universities and other research organizations.
In developing a significant network across the industry, Bravo Distro has also been collaborating with state agencies, taxation councils and legislators.
420 Realty LLC
In June 2018, High Hampton acquired all membership interests of 420 Realty LLC, a distribution-focused company based in Cudahy, just outside of Los Angeles. The wholly-owned subsidiary has secured six California State cannabis licenses to date, allowing 420 Realty to offer nursery, cultivation, processing, non-storefront retail, manufacturing and distribution services.
“With the development agreement and temporary licenses in hand, we can begin development of the facility in Cudahy, which is a central part of High Hampton’s strategy to serve the lucrative Southern California market”, said High Hampton CEO Gary Latham.
The facility will also provide other services like white label manufacturing and extractions for licensed producers that do not have licenses for manufacturing or distribution. The facility will house Bravo Distro’s distribution operations and allow High Hampton to distribute its brands to the southern California market.
Brands and Products
In July 2018, High Hampton closed the acquisition of HS Airway Holding, a California corporation responsible for the CaliGold edibles brand. The acquisition has provided High Hampton with a recognized edibles brand, including seven multi-strain, flavored, award-winning chocolate bars sold at dispensaries across the state. The HS Airway Holding team brings 18 years of combined experience to High Hampton.
CaliGold was built to introduce cannabis consumers to gourmet chocolate products. CaliGold won first place at HempCon in 2014 for best edible and was also first at Edibles List Magazine in 2017 with its THCa chocolate. The company has been driven by R&D and innovation, and has additional products in the pipeline.
“We are very excited to build our future in the cannabis industry together with the High Hampton group of companies,” said CaliGold co-founder Daniel Hood. “We look forward to working with our sister companies; CoachellaGro and 8 Points, as well as, the High Hampton executive team as they continue to build a solid portfolio of vertically-integrated cannabis companies.”
High Hampton has also acquired Mojave Jane LLC, a California-based licensed manufacturer of premium cannabis extracts and concentrates. The company is based in Coachella and is a key part of the Coachella Valley’s growing economy.
Mojave Jane is licensed for volatile and non-volatile manufacturing and is currently using CO2 extraction and proven distillation techniques to develop products for both the recreational and medicinal markets. Mojave Jane is currently able to produce 25 liters per month and is ramping up to 115 liters per month in the near term.
Through this acquisition, High Hampton will be able to produce high-value white label and branded extracts for the Californian market. This model is expected to produce near-term revenue, enable access to experienced management members and establish the base for a vertically-integrated business model.
“This acquisition integrates perfectly with our other subsidiaries, and I expect pivotal synergies to develop such as supply chain agreements between Mojave Jane and CALIGOLD, as well as, access to an established distribution network through 8 Points Management. Mojave Jane has proven that they can produce high quality extracts that are valued in the market, and that they know how and when to scale their business to meet market demands. Mojave Jane also brings revenue to the table to continue to fuel our growth in California’s rapidly expanding markets,” said High Hampton Sr. VP Corporate Finance & Director Christian Scovenna.
High Hampton has also entered into the data analytics sector of the cannabis industry by signing a Letter of Intent for acquiring a minority interest in the 2083 Group, a California-based company known for their Speedweed delivery platform and services for the cannabis industry. The partnership will allow High Hampton to access market data ensuring that the company is developing products and brands that meet consumer demands. The investment will also help 2083 accelerate the adoption of its delivery services in California and expand its media platform to develop and promote emerging brands.
Gary C. Latham— CEO
As a proven business leader with commercial and public-sector experience in domestic and international markets, Mr. Latham has 30 years of experience in the cyber security business with a history of developing, growing, and managing consulting services, professional services, and technology/products. Most recently, he spent several years in the burgeoning California cannabis market where he co-founded Coachella-based licensed cannabis manufacturing company Mojave Jane.
His experience also includes leading start-ups, middle market, and Fortune 500 organizations, as well as directing the technical information security program for the US Department of State. With a solid track record of improving and realizing corporate value through M&A transactions on the buy and sell sides, and by bringing Mojave Jane to the High Hampton family, Gary Latham is poised to steer the company forward and deliver on its key strategy of value creation.
Tom is a seasoned CEO and strategy executive and has led a number of small and medium sized businesses as CEO. He has also led corporate development and product management organizations for both publicly traded and private companies such as TRW (now Northrop Grumman), Reynolds and Reynolds and Mitchell International.
An engineer at his core, Tom’s deep skill set and adaptability have allowed him to lead companies in software development, consumer applications, manufacturing, consulting, aerospace and defense. He is meticulous about process and understands its value to a business from a compliance and profitability standpoint. Tom’s experience in M&A runs across public and private markets, where he has led corporate development teams and developed strategies that dramatically enhanced corporate value. Most recently, Tom was a co-founding partner of the licensed California cannabis manufacturer Mojave Jane.
Christian Scovenna—Sr. VP Corporate Finance and Director
Christian Scovenna has over eleven years of capital market experience. As Managing Director at a boutique firm, he led six portfolio companies within the group, raising capital, business development. He also spent four years with Frontier Merchant Capital Group as Director & Senior VP of Operations and most recently as Managing Partner with Lions Edge Capital. Over the years, he has been successful in completing numerous M&A activities and capital raises. He currently serves as Director & Sr. VP of Business Development for Enforcer Gold Corp. (TSXV:VEIN).
Fiona Fitzmaurice is a chartered certified accountant with 12 years of experience in accounting and financial control. She is currently CFO of Enforcer Gold Corp. (TSXV:VEIN) and acted previously as financial controller for Noront Resources Ltd. where she was involved in private placements, prospectus filings, flow-through financings and corporate audits. Prior to joining Noront, Fiona acted as a senior accountant and controller for both private and publicly listed junior companies.
She holds a BA in accounting and finance from the Athlone Institute of Technology in Ireland.
Richard Polanco—Chairman and Director
Richard Polanco is a former California State Senate Majority Leader and a Founder of the California Latino Legislative Caucus (1990). He is a career advocate for medicinal cannabis in California, and an active proponent for Prop 64 legalization. He is currently a strategic advisor to a company focused on cannabis testing.
Robert Allen is an investor, entrepreneur, C Suite Executive with 20 plus years of experience building, leading and advising both public and private corporations through complex restructurings, acquisitions, divestitures and capital market transactions
He has acted as both CFO and CEO to large public corporations (Ainsworth Lumber 2003-2009, TimberWest 2009-2012).
Mr. Petrov has founded a number of successful Cannabis companies and most recently served as Executive Vice President at Aurora Cannabis Inc. (TSX: ACB) from prior to its listing onto the CSE until mid 2016.
Daniel is currently the CEO of Aura Cannabis Inc., a Canadian Cannabis company seeking opportunities in the cannabis space.
Cam Birge—Independent Director
Cam Birge has over 20 years of experience advising and working with public and private companies in Canada, the United States and Mexico and is well connected both in capital markets and within the cannabis and other sectors. As the former CFO with Australis Capital Inc., a U.S. spin-off of Aurora Cannabis Inc. focusing on cannabis investments, he was directly involved in investment decisions related to the U.S. cannabis industry in both public and private companies.
Dieter MacPherson – Independent Director
Dieter MacPherson has approximately 10 years of experience as an advocate for sensible regulations and fair access to medical cannabis. He’s contributed to the development of municipal regulations while working with industry associations, and speaking across the country on the evolution of cannabis policy and regulation.
Since joining Aurora Cannabis Inc. in February 2017 as Manager of Production, MacPherson has been in charge of planning, development and implementation of processes and procedures to increase productivity, create efficiencies and improve profitability. He has overseen a consistent enhancement in crop yields and overall production, while also playing a key role in facility design and workflow for Aurora Sky and the company’s Pointe-Claire, Quebec production facility.
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