A Vertically-Integrated Cannabis Brand
This profile is part of a paid investor education campaign.*
Orchid Ventures Inc. (CSE:ORCD) is becoming a leader in vaporization technology and brand development in California and Oregon’s cannabis markets. The company operates under a B2B and wholesale business model, resulting in a 49 percent profit margin. Orchid Ventures intends to further vertically integrate its operations to increase its margins and production output.
The company has developed top of the line, best-in-class cannabis vaporizers on the market that features a unique hardware design and premium cannabis oils. The company has 12 SKUs that are sold in over 300 dispensaries across California and Oregon.
The vaporizers will be manufactured in-house through Orchid Ventures’ manufacturing and distribution facilities in Oregon and California. The company is currently transitioning its facilities into co-managed packaging facilities, which will help increase margins and improve efficiencies.
Orchid Ventures also intends to expand its presence throughout the US and into other legalized markets around the world. The company will do this by licensing its award-winning brand “Orchid Essentials” and by creating innovative product lines.
The company has secured an $8.17 million purchase order from Indus Holding Co., a leading cannabis distribution company in California.
Orchid Ventures management team is heavily invested in the company. Management also brings a wealth of experience in branding, product development, manufacturing and distribution as well as a proven track record in scaling revenue, building strong industry relationships and creating value for shareholders.
- Global cannabis market to reach US$146.4 billion by 2025.
- Vape sales are expected to surpass flower sales by 2022.
- Operates under a wholesale and B2B business model.
- Operating with a 49 percent profit margin.
- Secured an $8.17 million purchase order from Indus Holdings Co.
- Creating innovative product lines to supplement revenue generation.
- Future domestic and international expansion opportunities.
- Management is significantly invested in the company.
The Market for Vapes
The global cannabis market is expected to reach US$146.4 billion by 2025. Most of the growth of the market can be attributed to the rise of cannabis extracts and concentrates, which has opened the door for the development of new cannabis accessories, such as vaporizers. Vaporizers are the fastest growing market segment due to their size, lack of cannabis smell and reduced impact on the lungs. They also come with their own accessories, such as batteries, chargers and cases, among other items.
Analysts estimate that approximately 60 percent of consumer spending on cannabis in 2018 went towards extracts. In Colorado, the number is as high as 86 percent, while approximately 71 percent of California’s cannabis spending was on extracts. Spending on vaporizers is expected to surpass flower sales by 2022.
As per Orchid Ventures’ business model, the company is developing its vertically-integrated operations in Oregon and California. Orchid is currently in the process of transitioning its manufacturing facilities into co-managed packaging facilities, which will help increase margins through improved labor costs and improve efficiencies to increase production output.
Once complete, Orchid Ventures intends to transition all of its operations into self-managed, licensed facilities. The company also intends to expand its presence into other legalized states.
Orchid Ventures is developing a 4,800-square-foot cannabis distribution and packaging facility in Clackamas, Oregon. Orchid is in the process of closing a purchase of a distribution license which will be transferred to this facility upon close. The company’s wholesale business has no negative impacts on the gross margin or top-line revenue.
Long Beach, CA and Costa Mesa, CA
Orchid Ventures is also developing two cannabis facilities in Long Beach and Costa Mesa, California respectively. The Long Beach distribution facility has an active Type 11 temporary distribution license. The facility also has a pending annual license application which will help Orchid streamline its logistics and improve its purchasing power. The company hopes to control most of its supply chain and improve the company’s ability to produce finished goods.
The Costa Mesa facility will house Orchid’s corporate headquarters and fulfillment center for southern California once operational. The State of California has approved the facility for a temporary Type 6 adult-use license. Orchid Ventures is in the process of obtaining a conditional use permit (CUP) from the city of Costa Mesa.
Brands and Products
Orchid Ventures is currently selling its THC products in over 300 dispensaries across California and Oregon. The company has developed one of the top-selling cannabis vaporizers on the market that features a unique hardware design and premium cannabis oils.
The company intends to launch new product lines in the future for concentrates, tinctures and other CBD-based products. Orchid Ventures also intends to expand its brand into new markets throughout the US, Canada and the international marketplace.
Partnerships and Agreements
In January 2019, Orchid Ventures secured an $8.17 million purchase order from Indus Holding Co., a leading cannabis distribution company in California. Indus has also invested $1.5 million (USD) in Orchid Ventures through the company’s RTO financing.
Corey Mangold — CEO and Director
Corey Mangold is the Principal and Co-Founder of Gigasavvy, a leading southern California creative marketing agency. He’s established a thriving agency that has launched and managed campaigns for Toshiba, Knott’s Berry Farm, Johnny Rockets, Hi-Chew Candy, Tenet Healthcare and Northgate Markets, to name a few. He has also worked tirelessly to create a thriving culture at Gigasavvy that has been recognized, four of the last five years, as a “Top 10 Places” to work in Orange County. Corey has turned over management of the agency to his long-standing partners while focused on building Orchid Ventures.
As CEO of Orchid Essentials, Mangold brings 20 years of start-up experience and a knack for developing successful companies. His vision and extensive experience in marketing and advertising, branding, design, sales and product development have already established “Orchid Essentials” as the brand to beat.
Rene Suarez — President and Director
Rene Suarez was the former CSO and Partner at Space Jam, a leader in the nicotine and vape juice industry. At the beginning of his tenure with Space Jam, the company was generating $80,000 per month. Through his vision and strategic execution, sales grew rapidly over $1.6 per month in less than six months. He was ultimately responsible for driving over $15 million in sales revenue in 2014 which catapulted Space Jam towards becoming an industry leader.
As the President of Orchid Ventures, Suarez brings several years of experience in manufacturing and a proven track record of developing products that the consumer is looking for. He has vast experience in supply chain, operations, sales management and has a keen eye for accounting and statistics.
Adam Mirkovich — Chief Operating Officer
Adam Mirkovich has over a decade of experience with managing supply chains for consumer products. Prior to joining Orchid Ventures as its COO, he was an independent management consultant specializing in building and optimizing value chains for startups and growth stage companies in the beverage, nicotine vape and nutritional supplements industries. Most of his supply chain experience came with from his tenure at Niagara Bottling where he led the product revision, introduction and discontinuance practices for customers’ private labeled water, flavored and carbonated beverages. He was a member of the supply chain logistics team at Niagara Bottling, providing strategic support of company expansion activities and tactical support of purchasing, production planning and multi-region logistics in North America. At Orchid Ventures, Mirkovich oversees the company’s entire supply chain in current markets and will lead the expansion into new markets.
Matthew Lee — Chief Financial Officer
Matthew Lee has extensive experience acting as CFO for Canadian public companies. He is presently serving as CFO for Metallic Group of Companies, Juva Life Inc., Mirasol Resources Ltd. and as a senior financial consultant for Cannabis Compliance Inc. He has a deep understanding of the capital markets and financial reporting requirements on the exchanges. He holds a Chartered Accountant designation with a Bachelor of Commerce Degree from the University of British Columbia.
Eric Vaughan — Chief Strategy Officer
Eric Vaughan joins Orchid with over 20 years of diverse experience in corporate strategy, finance and administration management, and digital marketing. He worked as Mangold’s right hand while at Gigasavvy where he oversaw financial management of annual budgets, scaled and trained agency headcount (recruited, hired, managed teams and created interdepartmental synergies to optimize output) and built in-house departments from the ground up to transform Gigasavvy into a truly client-centric agency. He also has earned a Bachelor of Science in Business Administration and an MBA from Loyola Marymount University.
As the CSO for Orchid Ventures, Vaughan manages strategic planning, administrative operations and financial oversight to aid in Orchid’s foundational development. He has already implemented high-level financial tracking and analysis to closely monitor sales, profitability and cash flows to drive Orchid’s business objectives.
Luke Hemphill — Chief Revenue Officer
Luke Hemphill brings an extensive background in sales management and leadership from large enterprise companies including Straumann Dental Implants and Kendal Floral, both leaders in their industries. While at Kendal Floral, he managed sales and distribution operations for the West Coast, including a sales team of over 40 sales reps. During his time in leadership the company grew to over $100 million in sales. Additionally, he has earned a Bachelor of Science in Business Administration, and an MBA from Washington State University.
As the CRO, Hemphill manages Orchid Ventures’s sales and distribution management including developing distribution channels, implementing and driving sales growth strategies, and overseeing a sales team responsible for supporting Orchid Venture’s brand within the community. His creative approach to sales management and intuitive understanding of Orchid Venture’s customers’ needs makes Hemphill an invaluable asset for Orchid Ventures.
Jennifer Clifton — General Counsel
Jennifer Clifton has over 20 years of experience in corporate transactional law spanning several industries, including, most recently, the cannabis industry. She founded Clifton Cannabis Law in Oregon which was one of the first boutique law firms in Oregon to serve the emerging cannabis and hemp industries. Prior to founding Clifton Cannabis Law, she started two other businesses, served as in-house counsel and worked at large national law firms, including Kirkpatrick & Lockhart, an international law firm. She is a legal expert in cannabis law in Oregon and California. She holds a Juris Doctorate from University of San Diego School of Law where she graduated cum laude and was a member of the Order of the Coif and the San Diego Law Review.
Tom L. Soto — Independent Director
Tom Soto is a long-time investor in the impact sector. Having sold Craton Equity Partners to Trust Company of the West (TCW) in 2013, he became Managing Director of Alternatives at the $198 billion fund. He also served as an Investment Committee Member of TCW and Craton Alternatives.
His leadership, voice and investments have stood at the dovetail of energy, Tech, cloud based and IoT efficiency programs in renewables, and to over many Fourth Industrial Revolution driven platforms where technology contributes to improving the human condition. This ranges from Fintech, to electric vehicle technology and policy, to political process and regulatory frameworks needed to promote the new economics driving the planet into a future of prosperity and abundance.
Tom has a full understanding and history of sourcing opportunities, performing full due diligence, modelling, building organizational performance and measurement capacity along with building boards of directors and leading portfolio companies toward successful exits.
Tom is currently Chair of the Advisory Board for Aura, which is the nation’s leading online microfinance institution based in Silicon Valley.
Robert W. MacDonald — Independent Director
Robert MacDonald is an influential, trusted advisor with deep board and corporate governance expertise in energy, clean technology, banking and manufacturing industries. He has had success in raising billions of dollars in capital to catapult startups and growth companies into thriving, profitable entities. He has positioned businesses for successful IPO or sale; restructure underperforming operations while gaining investor confidence and capturing up to four times the capital investment. He achieved achieve measurable results by controlling hold periods and formulating exit strategies. He has served on 23 board of directors for 16 private and seven public companies, raising over $8 billion in funds over his extensive career.
In 1981, MacDonald, together with two other former Salomon Brothers principals, founded Catalyst Energy Corporation. Catalyst grew to become one of the largest IPPs in the country and was worth over $1 billion with nearly 800 employees and revenues of $414 million. In 1988, Catalyst was sold to the Bronfman family for $1 billion. From this point, MacDonald continued to finance the development of more innovative environmental technologies and power production. From 1988 to 1992, he was a co-founder and co-chairman of Eastrock Partners in New York where he provided private investment and financial consulting services to a variety of clients. In 1993, he joined William E. Simon & Sons L.L.C. He then became President of Simon Private Equity and served on its investment committee where he was responsible for all aspects of the management of Simon Private Equity. In 2006 Mr. MacDonald co-founded Craton Equity Partners I & II with Tom Soto. After the sale of Craton II, Bob served as a Senior Advisor to a number of private equity funds.
*Disclaimer: This profile is sponsored by Orchid Ventures (CSE:ORCD). This profile provides information which was sourced by the Investing News Network (INN) and approved by Orchid Ventures, in order to help investors learn more about the company. Orchid Ventures is a client of INN. The company’s campaign fees pay for INN to create and update this profile.
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The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Orchid Ventures and seek advice from a qualified investment advisor.