Branding, Transporting and Distributing Cannabis in California
This profile is part of a paid investor education campaign.*
TransCanna Holdings Inc. (TransCanna) (CSE:TCAN), through its California subsidiaries, manages cannabis branding, transportation and distribution companies in California that assists cannabis cultivators and manufacturers in getting recognized by end-users and consumers. Currently, TransCanna offers its clients branding and design services, but intends to roll-out distribution, transportation and sales services in the near future.
TransCanna develops effective brand strategies for its clients including messaging, social media, packaging and outreach programs with the goal of providing a competitive edge in the marketplace. To date, the company is acquiring 23 revenue-generating branding and design contracts from Goodfellas Group Inc., a cannabis branding agency. Through the Goodfellas acquisition, TransCanna will also be acquiring Daily Cannabis Goods, a company with three branded pre-roll products.
Pending the approval of its licenses and permits, TransCanna intends to develop a large distribution network across California. The network will be comprised of up to five leases or acquired facilities in North San Diego, Adelanto, Culver City, Los Angeles and Sacramento. To this aim, TransCanna has acquired a 196,000-square-foot vertically-integrated cannabis facility in Modesto, California with nursery, cultivation, manufacturing, extraction, bottling, remediation, transportation and distribution capabilities. The company is also subleasing a 10,000-square-foot facility in Adelanto, California.
Once TransCanna has established itself in California, the company intends to expand its operations into Canada, Washington, Oregon, Nevada, Colorado and Arizona.
TransCanna’s management team has significant experience in California’s cannabis industry. Leading the way in terms of experience is TransCanna’s CEO James Pakulis, who oversaw the growth of General Cannabis to over $16 million in annual revenue in two years. Recently, Pakulis was president of Lifestyle Delivery Systems and assisted in raising C$20 million for the company.
- California’s cannabis industry is expected to reach $6.5 billion by 2020.
- 23 revenue-generating branding and design contracts are being acquired from Goodfellas.
- TransCanna has agreements in place for cannabis-infused beverages and edibles.
- Establishing a vast distribution network in California.
- TransCanna has acquired a 196,000-square-foot vertically-integrated cannabis facility in Modesto, California with nursery, cultivation, manufacturing, extraction, bottling, remediation, transportation and distribution capabilities.
- Planned future expansion into Canada, Washington, Oregon, Nevada, Colorado and Arizona.
- Management has over 60 years of combined experience in California’s cannabis industry.
California’s Cannabis Market
California has a total population of nearly 40 million and receives approximately 263 million tourists annually. Since legalizing recreational cannabis in January 2018, California’s cannabis market has faced challenges with licensing and the supply chain, among others. In California, the medical and recreational cannabis markets are regulated by a dual licensing structure, whereby companies must obtain licenses from both the state and their municipal district before they can open their doors for business.
The challenges of getting licenses is included in the distribution side of the industry. Many cultivators can obtain transport-only distribution licenses, which allows them to sell directly to dispensaries. However, they are not required to conduct third-party testing, which has led to quality and scalability issues. Despite these challenges, California’s cannabis industry is expected reach $6.5 billion by 2020.
TransCanna’s Business Model
TransCanna, through its California subsidiaries, operates under a business-to-business (B2B) model that will allow the company to consolidate the various aspects of California’s cannabis industry. To do this, TransCanna will provide branding and design, distribution and transportation and marketing and sales services to cultivators and manufacturers. Currently, TransCanna is offering its branding and designing services to cultivators and manufacturers and is developing its transportation and distribution network within California.
The backbone of TransCanna’s business will be the company’s 420 Global software platform which is designed to create a business intelligence backend capable of integrating solutions for accounting, human resources, procurement, manufacturing and project management. TransCanna has recently completed Phase 1 development of the platform. 420 Global will integrate TransCanna’s warehouse management system with METRC, California’s cannabis track and trace system, making it complaint with state regulations. The system will allow the company to efficiently operate its current and future facilities in California’s cannabis market.
Branding and design
TransCanna, through its California subsidiaries, develops effective brand strategies for its clients including messaging, social media, packaging and outreach programs with the goal of giving its clients a competitive edge in the marketplace. The company also intends to develop its own in-house brand in the future. To this aim, TransCanna is acquiring 23 revenue-generating branding and design contracts from Goodfellas, a cannabis branding agency, that will allow the company to offer its distribution, transportation, marketing and sales services to its manufacturing clients. TransCanna will also be acquiring Daily Cannabis Goods through the company’s acquisition of Goodfellas. The Daily brand features three attractively packaged and priced half-gram pre-rolls.
Distribution and transportation
Transporting and distributing cannabis in California can be difficult as each municipal district can set its own regulations and laws which can differ from the laws and regulations set forth by the state. By establishing a large distribution network that covers the state, TransCanna intends to be able to swiftly and efficiently distribute cannabis. Pending the approval of the appropriate licenses and permits, the company’s subsidiaries intend to lease or acquire up to five facilities throughout the state so as to have at least one facility within a three-hour drive to the majority of its clients, ensuring ease of transportation.
TransCanna has acquired a 196,000-square-foot vertically-integrated cannabis facility on 5.5 acres of land in Modesto, California. The facility already has cannabis packaging and processing equipment on site and has recently gone through major renovations over the past two years. The renovations created specific divisions for nursery, cultivation, manufacturing, extraction, bottling, remediation, transportation and distribution.
“Acquiring arguably the largest vertically integrated cannabis centric three-storey multi-purpose facility in California reinforces our strategy to be fully self-contained in our ecosystem. We also have an additional 5 acres in the green zone adjacent to the facility to build up to 600,000 sq. ft. three-storey grow facility to supply our own biomass for the brands we acquire or create,” said TransCanna CEO Jim Pakulis.
Shortly after acquiring the facility, TransCanna entered into an LOI to acquire Lyfted Farms Inc., a state-licensed producer of high-quality indoor grown cannabis. The three licenses that Lyfted own are for cultivation (nursery), cultivation (grow) and distribution. Through the acquisition, TransCanna will be provided with a revenue generating brand of high-end flower, 50 unique genetic strains and a cultivation team with over 20 years of cultivation experience.
TransCanna is currently subleasing 10,000-square-foot facility in Adelanto, California with the goal of serving the densely populated southern California marketplace with industrial-scale production, distribution and transportation capabilities. The lease term spans a four-year period. In June 2019, TransCanna’s subsidiary, TCM Distribution Inc., received its adult use cannabis manufacturing and distribution permits from the City of Adelanto.
Sales and marketing
In California, buyers for dispensaries are approached by dozens of manufacturers and producers wanting to sell their wares, but many do not provide evidence that they can meet the demands of the dispensary or that they have high-quality products. TransCanna is preparing to remove this uncertainty by vetting its clients for both quality and scalability before offering buyers with a catalog of tested products to choose from.
TransCanna has entered the hemp industry by signing the LOI to acquire the branding asset package, Biovelle, an organic hemp-infused CBD coconut oil. The move into the hemp market will allow the company to expand its operations worldwide as more countries legalize hemp and CBD use.
“With the passing of the Farm Bill and the explosive growth of the hemp sector we decided to expedite our formation of our hemp related division. Acquiring Biovelle is the perfect fit. It represents a clean, natural healthy way to experience hemp derived CBD combined with the benefits of coconut oil, and it’s also an excellent catalyst to create a complete line of Biovelle products,” said Pakulis.
Once TransCanna has established itself in California, the company intends to expand its business offerings to each or all of the following states; Washington, Oregon, Nevada, Colorado and Arizona within the coming year. The company also intends to expand its services into Canada as well.
TransCanna’s Partnerships and Agreements
Persuasion Brewing Co.
TransCanna has signed an LOI with Persuasion Brewing Co., a private brewing company located in Modesto, California. TransCanna will be forming a Persuasion Brewing division at its 196,000-square-foot Modesto facility. The new division will produce a variety of CBD-infused non-alcoholic beers.
“Our 196,000-square-foot vertically integrated, cannabis-focused facility is perfectly designed to have a comprehensive bottling and canning line for multiple types of beverages. However, we firmly believe that our first beverage product subject to receipt of the appropriate licenses should be a private labeled non-alcoholic CBD-infused beer. We believe it’s the least expensive method to generate the greatest margins as quickly as possible, and that will continue to differentiate us from others in the marketplace,” said Pakulis.
TransCanna has signed a LOI with Tres Ojos Naturals to acquire the SolDaze brand. SolDaze produces cannabis-infused fruit snacks.
“Having reviewed over 100 branded products in California, we’ve been extremely selective in our acquisition vetting process. Our three mandatory acquisition criteria include SKU velocity, upward trending revenues, and products that differentiate themselves in the marketplace. The snack line from SolDaze, and specifically the cannabis-infused mango products, meets all three requirements,” said Pakulis.
James Pakulis — CEO & Chairman
James Pakulis has three decades of experience working with public and private entrepreneurial companies in a variety of emerging and high growth sectors. He is a former President and a Director of Lifestyle Delivery Systems Inc., a vertically-integrated cannabis related entity operating in California. Previously, Pakulis was chairman and chief executive officer of General Cannabis Inc., which owned WeedMaps. From 2010 to 2012, Pakulis oversaw the growth of General Cannabis from zero to over $16-million in annual revenue in 24 months.
Greg Ball – CFO
Greg Ball holds a CPA, CGA (British Columbia) designation, and has served as Director and CFO of the company since November 2017. He has been a professional accountant since 2005 and has over 30 years of accounting experience.
Steve Giblin – Director
Steve Giblin is an accomplished leader in the global hospitality, technology and real estate industries with a demonstrated track record of value creation. He has strong C suite relationships with the Marriott, Hilton and Radisson brands and he managed the Silverbirch and Delta hotel real estate portfolios for the British Columbia Investment Management Corporation. As CEO of Silverbirch, he grew revenues from $280 million up to $500 million and increased the portfolio value over 50 percent. He has worked closely with other companies including established brands like that of Bentall Kennedy and Great West Life and general contractors, such as Ellis Don, PCL and Bird.
Arni Johannson — President
Arni Johannson has over thirty years operating and investing in both private & publicly traded companies throughout Canada and the USA. Mr. Johannson’s has had numerous successful exits across a number of different sectors and has served on more than 20 corporate board of directors during this time.
Juan Flores – Director
Juan Flores received his undergraduate degree from the University of Arizona in 1986, and his law degree from Whittier College in 1990. He is an attorney with over 25 years of legal experience with a strong background in municipal, government, real estate, corporate and general civil law litigation. He has had a private practice for over 25 years, and has handled various legal matters for the city of Douglas, Arizona.
Alan R. Applonie — General Manager
For the past 18 years Alan Applonie was instrumental in growing a privately held consumer packaged goods company from start-up to greater than two billion dollars in annual revenues. His vast skill set includes an emphasis on supply chain and operations, primarily with CPG agricultural based products. Alan also has infrastructure systems experience with Amazon, Starbucks, 7-11, Walmart and Krogers.
Nam Tran — Brand Director
Nam Tran has been in the brand and business development fields for over 20 years specializing in marketing, sales, distribution, production and events. He has garnered nationwide recognition for his brand recognition in the music, fashion and action sports industries. In 2007, he entered the cannabis industry and has since provided bold, aggressive branding and cutting-edge marketing campaigns for cannabis-related entities including Raw Rolling Papers. He currently oversees an expanding portfolio of 29 cannabis centric brands. Several of his past clients include: Redbull, The Big Industry Show, Gopro, Bear Mtn, Hightimes, Pay Per View, 420 Rally, Simple Farms and Fresh Water, among others.
Tyrell Rohrer — Senior Supply Chain Executive
Tyrell Rohrer has an extensive background in supply chain management as it relates to the cannabis sector. Over the past ten years, he has become a seasoned liaison between manufacturers, farmers, acquiring agents and consumers throughout California. He is noted as an expert and is known for his pragmatic insight into farming, which he did for several years, and for orchestrating complicated transactions among independent cannabis-related organizations. His deep-rooted understanding of the complex cannabis ecosystem has allowed him to streamline the distribution process resulting in significantly improved turn-around times and cost savings.
Ron Enriquez – Logistics and Events Manager
Ron Enriquez has spent the past 26 years in a wide variety of positions revolving around retail sales, purchasing and logistics. Working from entry level positions up, he has achieved the general manager role at several sports-related entities with over 300 individuals directly or indirectly reporting to him. His well-rounded business background has provided an excellent platform for coordinating and implementing the various elements of supply chain management.
Tanya Marie Pascua — Sales Director
Tanya Pascua has significant sales and marketing experience in the cannabis sector. During the past seven years, she has provided her sales and marketing experience to many of the high-profile retail dispensaries. Specifically, educating store owners, organizing merchandise and implementing customer-related marketing strategies. Over the last three years, she was a principal of a private cannabis entity that she started, developed and grew the sales force to 20 representatives throughout five states. She has an exceptional understanding of cannabis consumers and the knowledge to connect the consumers to retail outlet stores.
Antiem Tran – Creative Director
Antiem Tran is a creative design and branding expert. He has been directly involved in the successful branding, design and roll out of 29 cannabis-centric brands in California. As a Creative Director, he is responsible for the concept, layout, design and graphics for his client’s projects. His skilled leadership combined with an exceptional eye for detail has earned him numerous accolades. He received his Master’s in Architecture from Southern California Institute of Architecture (SCI-Arc), and his Bachelors in Architecture Technology from New York Institute of Technology where he graduated Summa Cum Laude.
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