High Hampton Holdings Striving to be California’s Largest Cannabis Consolidator

The Market Size

Before adventuring into the depths of High Hampton Holdings (CSE: HC) (OTC: HHPHF) (FSE: OHCN) one of the future leaders of the California marijuana sector, we need to first take a look at the projected numbers for the Californian Market. Food, sports teams (and now with Lebron James), music, the warm weather, and the beautiful beaches are just a few reasons why California is one of the top tourist destinations. Adding legalized recreational marijuana to the mix, we now get a potentially highly profitable and remunerative market. With a current population of 39 million people, and an approximate 260 million tourists visiting per year,  the medical marijuana market size is estimated to be 7 times larger than the Canadian market. Over 1500 legal dispensaries can support the high market demand, and stay profitable. Lastly, California currently has an estimated 1 million medical cannabis patients since 1996, and with California currently being the leader in USA Boomers, that number is set to significantly increase in the next couple of years.

 

The Opportunity and Strategy 

With the California cannabis market expected to exceed over $5 billion in market value within the next year, a structured, well funded and experienced team is needed to take full advantage of the burgeoning market. With High Hampton’s vision of being California’s largest consolidator in the medicinal cannabis sector, over $20 million in working capital (as per MD&A quarter ending may 1st 2018), and lead by Ceo David Argudo, High Hampton is well positioned to seize this golden opportunity.

The High Hampton Strategy:

     ● Acquiring value brands and operators in the California market and establishing distribution points in major regions of the state.

     ● Actively developing land and buildings located in appropriate zones to engage in both royalty and leasehold agreements.

     ● Operate as an incubator/accelerator providing growth capital and strategic advice to best of breed cannabis companies.

Vertical Integration:

Concentrating on acquiring real estate, licensing, distribution, branding, and operations within the medicinal cannabis space will lead High Hampton in becoming a vertically integrated company. With a vertically integrated supply chain, High Hampton will have a lower cost of goods sold and operating costs, compared to other market rivals. To stay compliant and save costs, future and current acquisitions will target industrial and commercial properties within “the zone” in cannabis-friendly municipalities, and licensed cultivators, distributors, retailers, and manufacturers. 

INDUSTRY COMPARABLES

COMPANY SYMBOL MARKET CAP$ (CDN) OUTSTANDING SHARES SHARE PRICE
1 #N/A CNSX:HC #N/A 81832559 #N/A
2 1933 Industries Inc CNSX:TGIF 57898596.34 222686909 0.26
3 Sunniva Inc CNSX:SNN 56542570.2 38994876 1.45
4 #N/A CNSX:CRZ #N/A #N/A #N/A
5 #N/A CNSX:MPX #N/A #N/A #N/A
6 iAnthus Capital Holdings Inc CNSX:IAN 324216000 150100000 2.16


With a tight capital structure, which has less outstanding shares than the industry average, and both well-funded and strong asset-based, High Hampton is undervalued and shows strong potential to grow compared to similar companies in the California cannabis sector.

4 100% owned Subsidiary

COACHELLAGRO ASSET

CoachellaGro is the pride of High Hampton and management waited patiently for their Conditional Use Permit (CUP) before going forward with any other acquisitions. Recently receiving their necessary permits, management has shown perseverance in acquiring companies that will help bring revenue and increase shareholder value. CoachellaGro is located on 10.8 acres of land, near where the iconic Coachella Music festival is held each year. Construction is currently underway for the 254k sq.ft facility, management engaged leading engineering firm Infrastructure Engineers Inc., global greenhouse design firm ALPS Inc.  (Aurora Cannabis Corp’s (TSX:ACB) subsidiary Aurora Larssen Projects Ltd), and lead construction team Vertical Construction to take on this task. High Hampton engaged experienced firms to build the world-class facility in a timely manner and to make sure no corners are cut. Once fully built, the facility will boast approximately 194k sq.ft of growing space, and should produce 50,000 pounds of cannabis and bring in $50 million or top line revenue per year. With the end of year approaching, cultivation should start in Q2 2019, and hopefully, we will see a significant increase in revenue in the months to follow.


 

CALIGOLD  

With an experienced management team, it only makes sense that High Hampton would acquire, CaliGold an award-winning multinational cannabis brand focused on the medicinal benefits of Marijuana. CaliGold makes Cannabis Cup-winning, strain-specific chocolate bars, which sources the finest quality chocolate and California cannabis flowers. The premium cannabis brand is a veteran of the sector and is expected to bring in $2 million in gross revenue.

 

420 REALTY LLC

420 Realty is the stepping stone to High Hampton becoming vertically integrated into the southeastern Los Angeles County area. 420  has applied for multiple permits in the city of Cudahy, CA  for a development agreement (DA) (the city of Cudahy has one of the highest population densities of any incorporated city in the United States). These permits include cultivation, nursery, manufacturing, delivery, and distribution licenses on a single parcel location allowing the company to offer products and services to individual consumers and to licensed dispensary outlets at reduced rates. In doing so,  420 intends to establish a brand identity that is synonymous with top­shelf quality and accessible pricing throughout the State of California while manufacturing, delivering, and distributing a wide variety of flower strains and marijuana concentrates in multiple CBD-to-THC ratios and terpene profiles.

This distribution network has a unique product offering and services due to its all­-in-one centralized business model including wholesale flower, concentrate, and vaporizer cartridge distribution and management services. This relates to a lower price due to vertical integration and controlling Costs of a Goods Sold. 420 will have the ability to provide additional services such as white label manufacturing and extractions, an essential service to other city and state licensed operators who otherwise don’t have a license to operate a manufacturing facility or distribution facility.

 

8 POINTS / BRAVO DISTRO

8 Points Management LLC is the largest distribution footprint in California and gives immediate access to a major distribution hub in West Sacramento. It is the first step toward building out a prominent distribution network throughout California for growing portfolio of future cannabis operations. 8 Points serves the cannabis industry with sales, marketing, transportation, and supply chain management services through its subsidiary Bravo Distro LLC. Bravo’s customers include California storefront dispensaries, delivery services, and chain stores, as well as non-retail accounts of cannabis such as manufacturers, cultivators, and the emerging CBD medical market of clinics, universities, research, veterinary, and other sciences with an expanding customer base. Collaborating with state agencies, taxation councils, and legislators, Bravo represents distribution done right – where everyone wins! Bravo enters the market as one of the most viable distribution options with statewide sales, marketing, delivery fleet, compliance measures, technology-driven, and most importantly, an incredibly talented team assembled of industry experts and resources.

A Unique Company

In a highly competitive Californian cannabis market, with new regulations being implemented, we may soon see a shift where only the experienced, fully licenced, and well-funded companies come out on top and the smaller companies may start seeing revenue issues. The High Hampton management team which has a strong cannabis, political, legal, and capital markets background, have taken what seems to be the right steps to succeed in the ever so changing market. The combination of their wholly owned subsidiaries gives High Hampton the largest distribution footprint in California of any Canadian publicly traded company. With a potential distribution network spanning from Oakland to Sacremento and down to L.A. and to Coachella, we will hopefully soon see revenue being generated. Now that 420 Realty is currently awaiting licenses and the CoachellaGro greenhouse facility is under construction, we look forward from High Hampton for updates on key milestones, approval of licenses, and future acquisitions to continue the journey of becoming an industry leader in a very attractive California Market.

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