Vapen MJ Ventures Corporation (VAPN.CN) is a leading medical cannabis concentrate brand in Arizona that recently commenced trading on the Canadian Stock Exchange (CSE) and is in the early innings of a massive expansion.
Unlike most US companies, Vapen’s expansion is focused on the global cannabis opportunity and we find this to be significant. The company is an extraction leader with a portfolio of premium cannabis concentrate products. Vapen’s suite of products include leading tetrahydrocannabinol (THC) and cannabidiol (CBD) brands and this will play a key role in the company’s ability to expand.
Today, we have issued an update on Vapen which is well on its way to becoming a leading multi-state US operator and believe that this is an opportunity to be watching. On the international side of the business, Vapen is well positioned to expand its reach and we find this to be an attractive aspect of the business.
Brings Expertise to Kentucky to Capitalize on CBD
Earlier this month, Vapen reported a significant development and announced plans to bring its extraction expertise to a Kentucky through a partnership with Emerald Point Hemp that is focused on CBD extraction. The companies formed Vapen-Kentucky LLC, to capitalize on this opportunity and we are favorable on what each company brings to the table.
Emerald Pointe Hemp is an eighth-generation family-owned, farming business with a proven record of successfully cultivating hemp for many years. The company has initially dedicated 100 acres of their 6,000-acre farm to the Vapen-Kentucky partnership for the cultivation of hemp. Vapen also has a proven track record of success when it comes to the cannabis industry and will support the partnership with its extraction expertise and its wholesale distribution operations.
Vapen-Kentucky will process hemp for refined, high purity CBD oil, utilizing the industrial hemp grown by Emerald Pointe. The companies will share equally in the net profits generated from the CBD extraction and wholesale distribution business of Vapen-Kentucky and expect to complete the first harvest in the fall. The initial harvest is expected to generate approx. CAD$24 million worth of wholesale refined, high purity CBD oil in the first year of operation and we find this to be significant.
Over the coming years, we expect to see the relationship evolve and for there to be more than 100 acres allotted to Vapen-Kentucky. Demand for CBD products continue to increase, and we are favorable on the potential revenue that can be generated through this partnership. All products that are produced by Vapen-Kentucky will be branded by Vapen and we are favorable on the awareness that will be provided through this relationship.
A Precise and Specific Expansion Process
Vapen is in the middle of a massive expansion where it is increasing the number of states that it is levered to. We are favorable on the markets that Vapen is targeting and find this to be an important aspect of the planned multi-state expansion. Part of this strategy includes securing strategic partnerships with cannabis license holders as well as hemp producers where it can support growth through its cannabinoid extraction expertise.
Once Vapen has identified a potential partner, they will propose a strategic alliance with the operator as it relates to the extraction and the brand. Once the operator agrees to certain agreements, the new operation will manage the wholesale distribution to dispensaries in the state with a trained sales staff.
Once an agreement is finalized, Vapen expects to receive a majority of the revenue and profit (50% to 60%) and we are favorable on this structure. During the last year, we have seen a significant increase in the number of United States cannabis retailers such that the market has become very competitive. This creates a significant opportunity for Vapen to help operators turn their business around in strategic cannabis markets.
Vapen is led by a management team that has a proven track record of success and we expect this to play a key role when it comes to securing strategic partners. Companies want to partner with businesses and operators that can help them advance operations and this is an area where Vapen excels. We are confident in Vapen’s ability to expand is due to the management team that is place and we are favorable on this aspect of the business.
A Domestic and International Expansion Story
In the United States, Vapen is currently working to expand outside of Arizona through multi-state revenue and profit sharing agreements. This represents a massive opportunity for the company which is currently in negotiations with licensed businesses in California, Nevada, Oklahoma, and Massachusetts.
One of the reasons we are favorable on Vapen is due to the markets that it is targeting for expansion and we will monitor how the team is able to execute on this. Another reason we are excited about Vapen is due to the focus on the international opportunity, especially as it relates to CBD. By focusing on CBD, the company will be able to set up infrastructure in these international markets prior to the legalization of THC and we are favorable on the growth prospects associated with this.
Currently, Vapen is manufacturing CBD for its international brand in Jamaica and is planning to distribute these products in Canada and in certain South American countries. The company is also one of the few companies to be focused on the opportunity in Southeast Asia and we find this to be significant. In this part of the world, Vapen is focused on the CBD opportunity in Japan and plans to distribute its products in this market. If successful, Japan could prove to be a massive catalyst for the company as it will be a significant revenue driver and will open up additional markets in Southeast Asia.
A Growth Story to be Watching
We are favorable on the markets that Vapen is targeting in the US and abroad and can see that the company has had its finger on the pulse of the global cannabis opportunity. Over the next year, we expect to see Vapen start to generate strong revenues outside the US and for the company to benefit from its focus on additional US markets.
Vapen is in the middle of a major growth cycle and has an attractive risk-reward profile. During the last month, the company has recorded mixed movements and this is an opportunity that we are excited about. Although the shares have held up better than most during the last month, the valuation is attractive when compared to its peers and this is a company to be watching.
Vapen is a company that has significant catalysts for growth and is led by a management team that is laser focused on execution. The company offers a premium product line and has done an incredible job when it comes to executing on the Arizona medical cannabis market. Going forward, we expect to see Vapen enter new markets and for revenue numbers to ramp higher. We are bullish on the growth prospects associated with the planned expansion opportunities and will monitor how the team continues to advance its fundamental story.
The cannabis concentrate market represents a massive opportunity and Vapen is well positioned to capitalize on this. To learn more about this opportunity, please email firstname.lastname@example.org.
Pursuant to an agreement between StoneBridge Partners LLC and Vapen MJ Ventures we have been hired for a period of 180 days beginning May 13, 2019 and ending November 13, 2019 to publicly disseminate information about (VAPN) including on the Website and other media including Facebook and Twitter. We are being paid $6,500 per month (VAPN) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero (0) shares of (VAPN), which we purchased in the open market. We plan to sell the “ZERO” shares of (VAPN) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (VAPN) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.