The Canadian market will serve as the foundation for an upcoming public debut of a marijuana accessory distributor.
As Toronto-based marijuana accessory distributor Humble+fume prepares for a stock debut, the Investing News Network (INN) caught up with David Kelly, director of digital strategy with Humble & Fume (Humble+fume).
After his panel at the Lift & Co. (TSXV:LIFT,OTCQB:LFCOF) cannabis expo in Toronto, Kelly discussed the pressures on the company as it nears its public launch, the types of products Humble+fume looks to adopt and the products consumers are looking for right now.
The company is gearing up for an upcoming public listing that would put a spotlight on its business model. The company has not disclosed an official target date for its public listing or which exchange the stock will be available on.
When asked about the challenges of reaching a public market, Kelly told INN the pressure on the company increases as it attempts to set up its foundation moving forward.
“We want to be able to build this business model in Canada and expand it in the US and then take that platform and take it into new markets,” he said.
On May 13, the company completed a C$20 million private placement financing of convertible debentures. These debentures will transform into common shares of the firm once its go-public transaction is completed.
At the conference, Kelly participated in a discussion about accessories in the marijuana market, dubbed the “Pot-Lovers’ Paraphernalia: Accessories Coming to a Store Near You.”
As a distributor, the firm operates by pursuing connections with retailers in legal marijuana markets to establish a presence for its accessory maker partners.
Kelly said the firm currently works with 90 percent of all Canadian cannabis retailers. Among some of the trends in the accessory space, Kelly conceded that luxury items have gained prominence, but Humble+fume still wants to target all cannabis consumers.
“Coming to legalization, people are trying to redefine or reimagine who the new consumers are,” he said.
When dealing with potential new partners, Kelly told INN, the firm considers whether the products in question are innovative enough and are effectively pushing boundaries in the space.
In the lead-up to the Canadian recreational legalization on October 17, Humble+fume managed to secure exclusivity deals with the Nova Scotia Liquor Corporation and with the PEI Cannabis Management Corporation, making it the only supplier of cannabis accessories for the Atlantic provinces.
Robert Ritchot, CEO of Humble+fume, credited the firm’s product categorization, prepare, consume, preserve and live, as one of the leading reasons for the winning bid.
While the focus remains on the distribution aspect of the accessory industry, the company established an ongoing partnership with marijuana grower 48North Cannabis (TSXV:NRTH) that will grant Humble+fume access to the development of products of its own.
The agreement will see the construction of an extraction facility and packaging line next to the 48North’s operations in Brantford, Ontario, funded entirely by Humble+fume, according to Alison Gordon, co-CEO of 48North.
As part of the partnership, 48North is also participating in the launch of a subsidiary alongside the distributor. Debuting as Fume Labs, this new party will work on the development of marijuana concentrates products.
Ritchot said the firm will use its experience as distributors for the upcoming launch of its own concentrate vaporizers.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.