A Vertically-Integrated Cannabis Brand
This Orchid Ventures 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 and 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 350 dispensaries across California and Oregon. Within three months of launching, Orchid became the 8th largest brand in Oregon, a testament to the company’s rapid growth and strong response to its high-quality vapes.
“The expansion we’re seeing in California has been eye-opening, but what has been most impressive is our sell-through rate at the retail level. According to managers and owners of some of our California retail accounts, we are in some cases the best-selling vape cartridge and in some, the best-selling product across all categories. We expect this growth to continue as we ramp up our sales and in-store marketing efforts,” said Orchid Ventures Inc. CEO & Founder, Corey Mangold.
Orchid Ventures also intends to expand its presence throughout the US and into other legalized markets around the world. To this aim, the company plans to enter the cannabis markets in Nevada, Washington, Michigan, Florida and Massachusetts in the near term. The company intends to do this by licensing its award-winning brand “Orchid Essentials” and by creating innovative product lines.
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.
Orchid Ventures Company Highlights
- 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.
- Creating innovative product lines to supplement revenue generation.
- Future domestic and international expansion opportunities.
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.
Orchid Ventures’ Facilities
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 has a 4,800-square-foot cannabis licensed distribution facility in Clackamas, Oregon, which opened in June 2019. In addition to increasing capacity, this facility gives Orchid more control over its supply chain and serve as an innovation hub for new product development to test in the Oregon market.
Long Beach, California
Orchid Ventures is also developing a facility in Long Beach, California. 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.
GreenBloom Cannabis Co.
Orchid Ventures has acquired five retail stores, two cultivation facilities, one distribution company, and five brands from GreenBloom Cannabis Co.
The company is working on developing a cultivation and processing facility in Calexico, California that contains 300,000-square-feet of canopy and 25,000-square-foot extraction facility, making it one of the largest facilities in California.
Orchid Ventures’ Brands and Products
Orchid Ventures is currently selling its THC products in over 350 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. Since launching in California, Orchid Ventures has experienced rapid growth within the state and the response to its high-quality vapes was strong.
The company intends to launch new product lines in the future for concentrates, tinctures and other CBD-based products. To this aim, Orchid Ventures has launched an extensive CBD product development program that is also expected to work on formulations for lesser-known cannabinoids such as CBG and CBN. The company is currently in discussion with consumer-packaged goods (CPG) companies to assist in the development of these new products.
Orchid Ventures intends to expand its brand into new markets throughout the US, Canada, and the international marketplace. The company plans to launch its products in Nevada, Washington, Michigan, Florida, and Massachusetts in the near term.
Corey Mangold — Founder, 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.
Richard Brown — President
Richard Brown brings extensive operational experience that spans a diverse set of industries such as CPG, retail, health care and financial services. During his career, he specialized in both scaling up companies with high-growth potential and transforming businesses to energize revenue growth. Most recently, Brown was President of H&R Block’s Canadian operations, where he led the growth of tax and financial services for this $300 million company, plus built a proprietary digital tax software platform and e-commerce business. He also held senior executive positions at Burger King and Taco Bell in the US and PepsiCo Restaurants International in Canada, plus he spent 10 years in brand management with companies like Unilever, Gillette and Lipton in the CPG sector.
At Orchid, Brown will focus on building the necessary infrastructure, operational expertise and organizational talent required to execute Orchid’s multi-state brand strategy and fuel momentum in the space. He will be responsible for building strong brand platforms and disruptive go-to-market strategies that will accelerate revenue growth across existing and new markets. With his experience building product innovation in the CPG sector and his knowledge of franchising and licensing, he will play an important role in Orchid’s expansion plans by establishing contract manufacturing and licensing distribution agreements that will ensure a reliable and high-quality product supply that meets consumer demand expectations.
Tom L. Soto — Board Chairman
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 — Board Member
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.
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