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Vapen MJ Ventures Corporation (CNSX:VAPN) Begins Trading on CSE

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Vapen MJ Ventures Corporation (CNSX:VAPN) is a vertically integrated agricultural technology company based in Arizona. President and CFO Bob Brilon is thrilled with the company’s first week as a publicly-traded entity and highlights that its trading volume is increasing daily. He provides an overview of Vapen MJ and notes its exponential revenue growth over the past few years. Brilon emphasizes Vapen MJ’s key differentiators, like product quality, brand recognition, and customer service, as vital for keeping its existing customers. He discusses the award-winning Vapen brand and the company’s extraction capabilities as an important factor in sourcing partnerships and joint ventures in other states and internationally. Brilon explains that in 2018 the company generated $18 million in revenue and $6 million in EBITDA from its Arizona license and expects that revenue number to grow to $22 to $26 million next year. Vapen MJ is currently undertaking a $4 million raise and Brilon expects to use the proceeds from the raise to pursue expansion opportunities.

Transcript:

Narrator: Vapen MJ Ventures Corporation is an agricultural technology services and property management company. Vapen executes all aspects of cultivation, extraction, manufacturing, retail dispensary, and wholesale distribution of high margin cannabis and CBD products.

Vapen MJ has 75 million issued and outstanding shares, with inside ownership sitting at 80 percent with a three-year escrow.

Vapen MJ Ventures Corporation is listed on the CSE under the symbol VAPN.

Fraser Toms:  In this segment we’re joined by Bob Brilon, who’s the President and CFO of Vapen MJ. Bob, how’s it going today.

Bob Brilon:   It’s going wonderful. How you doing?

Fraser Toms:  Good, thanks! So, you guys have that new car smell of being a new listing on the CSE under VAPN. So you guys have only been trading just a couple days. Just give us an overview of the company and kind of what led up to the listing.

Bob Brilon:   I sure will. Yeah, it’s been a great week for us. We listed on Monday, and it’s been some great volume, and it’s upticked every day, so we’re excited.

The company itself started back in 2013. It’s here in Arizona; Thai Nguyen is the founder and CEO, and he started this company to grow – it’s a three part license, and so it’s a vertical license so you can grow, you can extract, and you can run a dispensary. And we do all three, as well as manufacture and do kitchens. So we do edibles, also.

But it’s been a great time. We’re three years, really bootstrapped it; the company itself had great growth path, and then ultimately in ’16, ’17, ’18, became very profitable, and the growth path, the revenue growth, just expanded exponentially.

What we found out along the way, though, was we really were doing things different than the other guys. We were doing customer service, we were making sure that the quality of the product was better than everybody else’s. so that enabled us to keep customers and grow customers.

Then going public became the idea because several Canadian companies had come down, taken a look at the facility, and actually made offers. And we looked at what we had, and really with our Vapen brand name and with our standard operating procedures, we felt like we had something special. And it ends up we went out, started talking with other operators in other states; they really like what we’ve done with Vapen, the brand name, the marketing on it, the influencers behind it. At the same time, they see our extraction capabilities, and so we’re going to set up some partnerships with people out there in many different states where we’ll be 50/50 owner or a 60/40 owner and have a nice profit share from that.

We’ll do some of the what’s typical, and that is going out and acquiring other dispensaries that we believe that we can do a turnaround. They may be doing 6 to 10 million in revenue, and we want to bump them up to that 15 million to 20 million revenue per year. So it’s an exciting time for us, so we’re looking forward to it.

Fraser Toms:  For sure. So what’s – how can we understand your footprint right now? I understand it’s expanding and you’re looking to scoop up dispensaries and so on and so forth, but just to people know kind of where you’re located and how many locations and maybe what, where you’re doing the extraction, and if you’re growing, and how much, and all that kind of stuff.

Bob Brilon:   Sure. The revenues from the past – again, that’s what’s nice about us, is we have, you know, last year $18 million revenue, over $6 million in EBITDA – that was all generated from just this one Arizona license. And like I said, that’s from the grow where we’re doing the bud is being sold at the dispensary, it’s about half the business; the other part of the business is Vapen. So we take the Vapen extracts and the distillate, we sell it through our dispensary, but we also sell it through 65 other dispensaries here in Arizona under the Vapen brand name. So it doesn’t look like a competition, and they’re able to make their 50 percent profit on that, and everybody’s happy.

So that $18 million is right here in Arizona; again, we’re expecting that to be 22 to 26 million next year. But going forward, we’re already in negotiations with the different partners out in, and we’ve talked about different states that we went to immediately, which was, like, Oklahoma, Massachusetts, Nevada, California. So you’ll see some press releases on that in the very near future, as soon as we get those locked down and get some operations there so we can project exactly what those can do for us this year.

Fraser Toms:  Okay, so it looks like you guys are expecting to do a raise to sort of meet some of those goals. From what I’m seeing here, you want to raise $4 million? Is that right?

Bob Brilon:   That is correct. We put that out in the early press release, and that raise is going very well. We should be able to close that very, very soon.

Fraser Toms:  And that’s just to continue to expand and sort of hit your milestones over the next year?

Bob Brilon:   It is, on these different opportunities, these joint ventures in the different states, part of our piece of the deals is to bring in about $500,000 to $800,000 worth of equipment, and that’s the extraction equipment. So that’s where part of that money will be used.

Fraser Toms: Okay, great. And then just kind of looking further ahead, what’s the ultimate goal for the company? Is it for the Vapen brand to be sort of a nationally recognized go-to brand?

Bob Brilon:   Most definitely. We will be, as we have done here, we will be promoting that brand. There’s a lot of hip hop influencers that have been introduced to the brand, have been very helpful in getting the word out there about, and it’s the quality that what stands out, is when we go up head to head with somebody else, there’s a taste test there. There’s, you know, the quality of the THC involved, and we’ve won consistently. So we’ve very excited to take that brand name throughout the United States and actually internationally here, very soon.

Fraser Toms:  Okay, yeah, that was my next question, if you were going to peek your head north of the border or around the globe depending on the different countries that have legalization so far. So I guess that is in the works, or it’s a part of the plan?

Bob Brilon:   Oh, it definitely is, and we also do CBD. And so we’re already shipping CBD around the world at this point, and we’ll be discussing more, because those distribution networks and channels are becoming much more solid for us. We also have partnerships for us here in the United States. We’ll be producing and extracting CBD from hemp.

Fraser Toms:  Great, okay. Well, thanks so much, Bob. That’s a good overview of the company, and we’d like to check back with you in a few months’ time and see how it’s going.

Bob Brilon:   Well thank you very much. I appreciate the time this morning.

Fraser Toms:  No problem, cheers.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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