CEO Gary Latham sums up Mojave Jane’s strategy in a letter to shareholders.

Dear shareholders,

Following the closing of our placement on September 10, 2019, I felt this was an opportune moment to reach out to you and provide an overview of recent development, and discuss how Mojave Jane, following a period of restructuring, is now very well positioned to execute on its refocused strategy, capitalize on a number of exciting opportunities, and deliver shareholder value.

Strategy

Let’s first reiterate our strategy. When I took over as CEO, I inherited a Company that was focused squarely on mass scale production through the development of a high-tech, CapEx heavy cultivation infrastructure. With cultivation capacity in California, the world’s largest legal cannabis market, more than abundant, it was clear to me and my team that this represented a risky and expensive path to growth.

In our view, a fragmented and consumer-oriented market like California provides many opportunities for well differentiated companies with a focus on niche extraction and manufacturing, high-end products and innovative services, strong brands and, above all, the ability to get products in the hands of consumers. This is the end of the value chain where true value is created, and this is where Mojave Jane will operate.

To execute on this strategy, we have made a number of investments that will enable us to accelerate revenue growth. For instance, we are building extraction capacity to increase product availability of our Caligold brand, as well as develop and launch further products and brands in the future. We are currently in the process of securing licensed space to house our expanded capacity and ramp up production. Working to our advantage is the fact that prices for cannabis properties in California have come back to earth, providing us with options that will deliver greater value for their cost.

Caligold – A brand with resonance

Secondly, our CALIGOLD brand offers high-end, cannabis infused, full spectrum chocolates that resonate very well with Californians, as evidenced by overwhelmingly positive reviews on cannabis culture websites. The capital raised enables us to establish CALIGOLD’s commercial kitchen, expand the product portfolio, and increase the reach of our brand and drive revenue growth. We have also created immediate measures to enable production and product availability now, and hope to be able to report on this shortly.

HAI Beverages – A disruptor poised to take the beverage market by storm

We also recently signed an exclusive agreement with HAI Beverages for their technology and products in California. HAI’s technology is disruptive. I know this is a much-overused word these past couple of years, but the capabilities we obtain through our relationship with HAI create a platform to make rapid inroads into the Californian infused beverage market. Importantly, the products we create through this partnership are not limited to the existing cannabis market. Instead, they will be aimed at the far larger alcoholic beverage market where consumers are seeking to replace high sugar, high calorie beverages with healthier alternatives.

The HAI technology platform delivers flavor-neutral, water soluble cannabinoids. What is more, HAI’s technology enhances bioavailability of cannabinoids, reduces the time to onset of action, and limits the duration of action, the holy grail in cannabis infused beverage technology. In this way, cannabinoids can replace alcohol as the active ingredient, which we regard as the most disruptive innovation the beverage industry has seen in decades.

The end-product is for a HAI-infused beverage to deliver a similar experience to that of an alcoholic drink, but without the negative side effects. The technology is so adaptable, that virtually any type of drink can be created with it. This makes us a very attractive partner for the many beverage brands that operate in California

Through our assets and distribution infrastructure, we will be providing the platform for HAI to commercialize its technology in California, while we will be able to capitalize on what we believe will possibly the most significant consumer opportunity in years to come. Together with HAI, we will produce, distribute, and deliver a range of beverage products to the California market. Additionally, Mojave Jane has the right to produce, distribute, and deliver products under the Mojave Jane brand that leverage HAI technology and incorporate the formulations we produce.

SpeedWeed – A game changing investment delivering the final mile

Tying our strategy together – and delivering that critical last mile connection to the customer, and therefore revenues – is our investment in 2083 Group, and through them in SpeedWeed. I believe the importance of the 2083/SpeedWeed investment for Mojave Jane is not well understood, so I would like to take this opportunity to go into more detail.

As we announced today, we are making the second tranche of our investment in 2083 this month, lifting our ownership interest to just under 25%, on a path to our intended 40% stake. The capital injected will be used for a number of initiatives to take SpeedWeed and the 2083 Group to the next level.

In short, SpeedWeed is a technology company active in the cannabis delivery sector, much like Uber Eats and Skip the Dishes are in food delivery. However, whereas these comparables are predominantly app-based connectors between drivers and food establishments, SpeedWeed’s activities go well beyond the mere logistics of delivery. SpeedWeed provides seamless workflow technology, marketing and fulfilment services to dispensaries, helping increase their reach, revenues and margins. This is of paramount importance in such a competitive environment, and this makes SpeedWeed the partner of choice for dispensaries.

SpeedWeed is also closely integrated with brands. As opposed to Canada, where growth of the cannabis industry has been slower than anticipated due to the lack of

brick and mortar stores, California is a much more mature brand market and has a well-established and very competitive physical infrastructure. This has resulted in an environment in California, as opposed to many other markets, where the brand equity resides predominantly with the product brands, rather than the retail brands. SpeedWeed works with industry-leading brands, and in some cases is the exclusive fulfillment partner, showcasing the importance of SpeedWeed in connecting brands with consumers.

This level of integration with brands and dispensaries ensures that the entire customer experience is significantly enhanced, resulting in exceptional satisfaction ratings and a high standing with industry participants and customers alike. Competitors like Eaze, which is a highly capitalized technology company that has moved into cannabis delivery, do not have this level of integration, are seen as outsiders, do not deliver an enhanced customer experience, and consequently are not nearly as highly rated as SpeedWeed. As a result, SpeedWeed’s registered base of potential customers stands at over 200,000 and growing.

While the pricing difference between the legal and illicit market in California has reduced order frequencies since delivery was made legal, SpeedWeed’s business model lends itself to significant expansion. Currently active in Southern California, the cash injection from Mojave will enable SpeedWeed to engage with the many dispensaries that are on its waiting list, as well as expand into new markets in Northern California, enabling the company to achieve scale, rapidly grow revenues and improve profitability.

We are incredibly excited about our partnership with SpeedWeed. This partnership delivers the final mile to the customer and so much more. It integrates Mojave with California’s vast dispensary network, provides close ties to leading brands, and enables us to pursue accelerated revenue growth. The two companies are also exploring innovative business models for SpeedWeed, and we look forward to reporting on this soon.

2083 Group is more than SpeedWeed alone. I already discussed the marketing and branding capabilities, which are partially driven by other 2083 subsidiaries. Beyond marketing, these companies provide celebrity endorsement services to brand. They also produce and distribute a variety of cannabis industry related media content through stations such as Sirius-XM, Cumulus Networks, iHeartRadio, Premiere, The World Famous Comedy Store and All Things Comedy. Working with 2083, Mojave Jane will be leveraging these capabilities and this reach. Consequently, expect to see and hear a lot more of your company. While these are adjacent activities, the importance for Mojave is increased visibility, both as a commercial operator in the California market, and as a public company. In other words, more eyeballs on the company, more eyeballs on the stock, which we believe will create additional momentum in delivering shareholder value.

Conclusion

In a nut shell, our strategy can be described as extracting value, delivering growth. We are tying together the value-add segment of the industry value chain, establishing that critical connection to both brands and customers, while delivering high-quality, innovative and disruptive products and services. From extraction to products, brands and commercial distribution, we are executing. I am very excited about the potential of the Company, and I look forward to updating you frequently as we execute on our strategy.

Sincerely,

Gary Latham
CEO & Director, Mojave Jane Brands Inc.

Leave a Reply

avatar
  Subscribe  
Notify of