Nutritional High Building a Multi-State Edibles Manufacturing Platform

WHITEFISH, MT / ACCESSWIRE / June 10, 2015 / Consistency is key. This is the philosophy under which Nutritional High is building its business from day 1. Headlines abound about marijuana edibles containing anywhere from 0 to 200% of the dosage stated on the package. Some purveyors of edibles, be it homemade brownies or products purchased at dispensaries, find dosing an issue. Testing in Colorado confirms that dosing is a significant challenge for marijuana edible companies as they try to ramp up production, and this is a challenge Nutritional High is taking up.

The company’s initial facility is being built in Colorado, the nation’s largest legal marijuana market. Over half of the $700 million in marijuana revenue generated in the state last year is believed to have come from edibles and other infused products. In this facility, the company is installing a true high quality semi-automated candy line. This will be capable of producing confectionary products to the same standards and consistency that consumers expect from mainstream candy products. These dynamics ensure that consumers are purchasing and consuming accurate quantities of THC.

Consistency doesn’t stop at state lines. The company is replicating this model in several other states that permit either adult or medicinal use. The idea would be to ensure that a Nutritional High branded chocolate bar or hard candy bought in any store in Colorado would be he same as in any other store anywhere in the country, no easy feat in this emerging industry.

Attractive Roll-up & Royalty Model

The fastest way to expand in a new industry is through a roll-up strategy, by acquiring or entering into joint venture agreements with entities which obtained a license in their respective jurisdictions. By bringing scalability in a high margin segment of the cannabis industry, the company’s roll-up strategy has the potential to create enormous value for shareholders quickly, which sets it apart from many competitors in the space focused on organically growing individual products or services.

According to Mirus Capital Advisors, there are three critical components to a successful roll-up strategy, which the company has successfully addressed:

1. Large, Highly Fragmented Market – The cannabis industry is an ideal target for a roll-up strategy given that its both large in size and highly fragmented without any real dominant players. Often times, these opportunities are created through regulatory catalysts, such as the legalization of cannabis at a state level.

2. Proven Operational Formula to Apply – Nutritional High has developed an effective operational strategy focused on producing high-margin cannabis products on a semi-automated basis rather than creating less-scalable brownies and other baked products.

3. Disciplined Approach to Finding Targets – Nutritional High has focused on identifying high-probability targets in states, which are compliant with the Cole Memo. Many of the states are already experiencing high growth and Nutritional High has created an investment platform to allow shareholders to take advantage of this growth.

While assembling a portfolio of high impact brands, Nutritional High also partners with local companies which look to produce marijuana-infused edible products and oil extracts and need help to take advantage of this new industry. These companies would pay a royalty on the sale of Nutritional High-branded products, allowing shareholders to participate in this rapidly growing industry without the regulatory risk or capital requirements.

In June, the company announced an exclusive licensing agreement with Purple Haze Properties LLC to manufacture and distribute various marijuana and hemp-infused edibles using the song titles and bearing the likeness of legendary guitarist Jimi Hendrix. This agreement and others like it will augment the company’s brand portfolio and ultimately attract new partners in other states.

Initially Targeting Colorado & Illinois

Nutritional High began establishing its operations in Colorado where Palo Verde LLC, the Company’s tenant, has recently engaged contractors to complete the build-out of its facility in West Pueblo, Colorado. With a commercial kitchen costing substantially less than setting up a growing operation, Palo Verde will be able to produce edible marijuana-infused products and manufacture oil extracts at high margins.

While the build-out is expected to commence this summer, the company is working diligently to secure the appropriate local permitting, finalize packaging designs, source equipment and establish the initial production runs. Palo Verde intends to initially produce 6 to 8 chocolate and candy product lines, followed by 3 to 4 product lines of marijuana oil extracts and other infused products (eg. tinctures), which are all high-margin opportunities.

In Illinois, Nutritional High applied for a dispensary license with the goal of establishing a business to serve medical marijuana patients in District 12. The Company has entered into an agreement to purchase a property in Lawrence County with a view of commencing operations later this year.

Management has already taken action in Colorado and Illinois and is in active discussions with parties in a number of other states, and plans on providing additional updates on those initiatives in the future. Management expects that continuing to augment its existing branding portfolio will allow Nutritional High to ultimately unlock additional shareholder value over the long-term.

Looking Ahead

Many Canadian companies, like OrganiGram Holdings Inc. (OTC: OGRMF) (TSX-V: OGI) and Tweed Marijuana, are focused on domestic medical marijuana opportunities, while others like Abattis Bioceuticals Corp. (OTC: ATTBF) (CSE: ATT) are focused on growing in-house product portfolios. Nutritional High is taking a different approach by targeting the U.S. market with an innovative roll-up and royalty strategy looking to create tremendous value.

With its early successes in Colorado and Illinois, cannabis investors may want to take a closer look at the stock sooner rather than later. The company’s modest $7.1 million market capitalization, according to OTC Markets, may be significantly undervaluing the stock, as management continues to successfully implement its R&R Model and build long-term value.

The cannabis industry could be worth $35 billion by 2020 if all 50 states legalized marijuana and the federal government ended prohibition, according to GreenWave Advisors, while a more modest scenario could create a $21 billion market over the same timeframe. With widespread public support, federal regulators are also beginning to take a pro-active approach to governing the marijuana industry, as evidenced by the so-called Cole Memo asking prosecutors to abide by state laws.

While there is no shortage of public companies targeting the space – from vaporizer manufacturers like Vapor Inc. (OTC: VPOR) to growing technology providers like Terra Tech Corp. (OTC: TRTC) – there are few companies as ambitious in terms of growth as Nutritional High International Inc. (OTC: SPLIF) (CNSX: NHL), which is the first Canadian public company to focus on the rapidly growing U.S. cannabis industry.

For more information, visit the company’s website at www.nutritionalhigh.com.

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Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its services in the form of cash-based compensation or equity securities in the companies it writes about, or a combination of the two. For full disclosure please visit: http://www.cannabisfn.com/legal-disclaimer/.

SOURCE: Cannabis Financial Network

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