Ignite International Brands (CNSX:BILZ) President Discusses the Dan Bilzerian Advantage
Ignite Cannabis President Jim McCormick discusses the Ignite brand and Dan Bilzerian’s for the cannabis space. He explains that Ignite is more than a cannabis company, it’s a consumer products company selling cannabis, CBD,THC, vapes, and sees its brand as being able to be spread across multiple product lines. McCormick reveals Ignite is an asset-light company, while the company is not growing cannabis, its partnering with leading cultivators and white-label producers. Currently, the company’s revenue model includes online sales and dispensaries but is looking to close a national distribution model for its CBD products. McCormick talks about the brand’s leading product offerings, which include vapes and toothpicks. He explains that Bilzerian’s considerable social media following gives Ignite an advantage over other cannabis companies but emphasizes Ignite’s other branding elements, such as packaging, are also key to consumer loyalty. Ignite is a global opportunity and is looking to raise $100 million this year as it rolls out products in the US, Canada, and UK. McCormick hopes to have positive cash flow by 2020.
Jim McCormick: My name is Jim McCormick. I’m President of Ignite International.
James West: Sure. Jim, when did Ignite start in the cannabis business?
Jim McCormick: Well, Ignite is the creation of Dan Bilzerian, he’s the founder of the company, and it actually appeared in his radar screen around 2016, the middle of 2016, when Dan saw the emerging cannabis space and realized that there was no leading brand. Dan had had the Ignite brand kind of sitting idle, and then in 2016 he saw the opportunity to use that brand in the cannabis space. So the company was essentially born then, but its product launch took place in October of 2018 – so a relatively new company to the consumer products world.
James West: Okay, and what does Ignite actually do in the cannabis world?
Jim McCormick: Well, you know, it’s funny: even though the company Ignite started as a cannabis idea of Dan’s, we’ve seen in even the short time that I’ve been there, that the brand is much more than that. So we don’t actually consider ourselves a cannabis company; we consider ourselves a consumer products company. Cannabis is one arm of that, and THC products, but also CBD, which now in the US is completely legal and abroad as well, and a $22 billion segment this year. So we see CBD as one of the key components.
We also have a vaping line which also comprises of not just interchangeable THC and CBD pods, but also the ability to sell nicotine in the vaping form. So we’re much broader than a cannabis company, and we see the Ignite brand being ab le to be spread across multiple product lines.
James West: Sure. Is Ignite a cultivator of cannabis?
Jim McCormick: No. Our model is actually an asset-light model, so whereas the typical MSO in the States or Canada has everything from the grow to the dispensary, I can’t grow anything, so you don’t want me growing anything for the company or personally. So we really focus on building our brand and about meeting the consumer. That’s all we focus on. So the model is a little bit different. But we think in the long run, the value-add will be around building that brand, so that’s where we want to spend 100 percent of our focus.
So in that model, we have to find great partners to produce our products, and that’s, you know, one of the challenges that we have, whether it be on a state-by-state basis for cannabis or nationwide in Canada, or as we explore the UK, you know, finding partners there. And we see more and more opportunities to partner with white label producers that that’s all they do; they don’t build brands, but they produce great products, and so it’s a really good fit. And we find those partners, and that’s how we go to market.
James West: Right. Okay, so your revenue comes from retail sale of your Ignite brands in dispensaries throughout United States, at this point?
Jim McCormick: Yeah. Again, dispensaries is the THC model, so we see revenue from there, but also online sales of CBD products and nicotine products, but also as we move out, we’re closing a deal for nationwide distribution. So we’ll be in convenience, we’ll be in smoke shops, brick and mortar, so consumers can go to a local shop and get Ignite products. And then that’s under the CBD umbrella, and then as we build out the Ignite brand, we continue to roll out state by state with our cannabis line and other cannabis lines as they come to market.
James West: Sure. So what are your top-selling products right now in California?
Jim McCormick: It’s – we see vape is really one of, in all forms, whether it be CBD or/and the THC product line, vape is the fastest-moving, it’s the fastest-growing segment within the THC space, and as we see, you know, vaping and CBD usage evolving, it’s very early days. We see vaping as a very big component of that. Of course, all traditional flower products and THC and drops in terms of CBD. We have launched a toothpick line.
James West: Yeah, somewhat famously, I would say, at this point.
Jim McCormick: Yeah, it’s an interesting – it was my first product launch as president, so that one kind of came. But you know, it just shows the flexibility of CBD, and consumers are really resonating with the health benefits. And so you’ll see a lot more product offerings we intend to bring out, roll out, over the coming months under the Ignite brand.
James West: Sure. Okay, so the thing that first drew my attention to the Ignite brand was these building-sized billboards, and especially since coming from Canada, where we’re not allowed to advertise at all. Is the ability to advertise key to success for a brand like Ignite?
Jim McCormick: Well, look: I think for any brand, you have a number of things that make it successful. First and foremost, you have to have it available to consumers and have distribution, but as you’re building awareness of a brand, there’s a couple of ways to do it. So obviously, having a building-sized billboard of Ignite brings immediate awareness to people driving by. The thing that attracted me to Ignite and what makes us unique, is Dan’s social media following. So even in places where we aren’t present – so, I have a home in Texas – I’ll have my Ignite gear on and I’ll be walking around and shopping or something, and people will come up to me and say, ‘That’s Dan Bilzerian’s brand!’ You know? ‘How do I get one of those hoodies?’ Things like that.
So we have this massive awareness of Ignite thanks to Dan’s presence, but you know, at the end of the day, you can’t rely on just one aspect. So you have to have a through the line campaign, whether it’s billboards, and point of sale is very important. Consumers make, you know, decisions, right at the point of sale. I think our packaging is as good as anybody’s out there; I think our logo is one of the best logos I’ve ever seen. So it immediately draws attention at the point of sale, but you know, what’s important to understand is, it’s a consumer product. It’s no different than ketchup and laundry detergent; you have to make it, you have to get it like a consumer wants it, and you have to get it where they can buy it, at the end of the day.
So you know, for us, we have this beautiful brand, we have great partners, and now it’s just about execution. And that’s what we focus on, and we don’t have to worry about growing, and running dispensaries, and things like that. So that’s what we spend all our time doing.
James West: Sure. Okay, in the State of California at this point, there’s some figures say there’s up to 8 out of 10 dispensaries and grow-ops are actually operating on an unregistered, illegitimate, illegal basis.
Jim McCormick: Right.
James West: Does that threaten the integrity of the industry and the future of it, in its entirety?
Jim McCormick: Well, there’s a lot to this, okay? So California is by far the biggest market within the US. It has a long-developed illicit market, black market, whatever you want to call it, and so with the, you know, legalization is an early inning. So it’s only been, you know, not even two years yet, and what you see is that, you know, there’s a price differential; you have a 30 percent excise. But what consumers like is the fact the products are tested, products are reliable, you’re not buying on a street corner from somebody that’s, you know, a little bit dodgy, maybe.
So it’s a long run game. You have dispensaries that aren’t licensed, and the state is getting much more aggressive in closing those down, but sometimes these people just move. So the economics have to work themselves through, and this isn’t going to change overnight. The market is way too developed, and there’s still that price differential. But I believe over time, and with sensible regulations, sensible excise policies, we’ll see the market more and more legitimized over time.
James West: Sure. Okay, from an investor perspective, then, how soon till the company’s profitable? How much money do you need to raise to get there?
Jim McCormick: Well, look: we have a lot of opportunities globally. This is a global play, and time is our best friend, and we’re standing there at the same time. So we have to grab these opportunities while we can, so we’re looking to raise up to $100 million CDN, which we believe will take us well into this year with our plans of rolling out US, Canada and the UK. Also looking at other markets in South America as well as central Asia. So that’s vital, to have the fuel, and what does that money get used for? Well, it’s not to buy a fleet of Teslas, I can tell you that. It’s used for working capital, it’s used to close joint ventures where there’s capital injections needed, and really to execute our game plan.
Profitability, obviously early stage company. We expect to have relatively high gross margins, and so, you know, we would look to be cash flow positive certainly in 2020. Can’t say exactly when, because that’s dependent on the market rollout, but you know, we run the company very lean and mean, and this asset-light model should give us a path to profitability much quicker than some more traditional vertically integrated operations.
James West: Perfect. All right, Jim, that’s great. Great introduction. We’re going to follow the company. Thanks for joining me today.
Jim McCormick: Thank you very much for the time!
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