Tuesday, January 17, 2023

Investor Ideas #Cannabis #Potcasts 643: Interview with CEO of Tilt Holdings Inc. (OTC: $TLLTF) (NEO: TILT)

Investor Ideas #Cannabis #Potcasts 643:  Interview with CEO of Tilt Holdings Inc. (OTC: $TLLTF) (NEO: TILT)


Delta, Kelowna, BC, January 17, 2023 (Investorideas.com Newswire), investorideas.com,  a global news source covering leading sectors including marijuana and hemp stocks and its potcast site  release today’s podcast edition of  cannabis news and stocks to watch plus insight from thought leaders and experts.


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Today’s podcast overview/transcript:


In today’s podcast Investorideas interviews Gary Santo, CEO of Tilt Holdings Inc. (OTC: TLLTF) (NEO:TILT), where we discussed some of the companies recent news, their 2022 year and how this leads into expectations for 2023, what to look for in brand partnerships as well as how the US market is developing over all.


Just last week the company announced that its Chief Executive Officer Gary Santo has been appointed to the Board of Directors of the National Cannabis Roundtable (“NCR”). Founded in 2019, NCR is a non-partisan alliance of cannabis companies and ancillary services and solutions providers working to advance cannabis policy in the United States.


“The National Cannabis Roundtable has been and continues to be at the forefront of federal cannabis policy,” said Gary Santo, TILT’s CEO. “While the industry made some important gains, including a presidential pardon of all federal convictions for simple possession of marijuana and the review of the scheduling of cannabis under federal law, unfortunately, the SAFE Banking Act failed to pass Congress. The failure of the SAFE Banking Act to pass the Senate shows once again there is still more work to be done. As a member of the NCR, TILT will continue to advocate for access to traditional financial services and capital markets for cannabis businesses, as well as the elimination of tax barriers such as 280E.”


Continued Santo, “TILT will fully support NCR’s legislative priorities around decriminalising cannabis, maintaining business continuity, ensuring consumer and worker safety, promoting social equity, and remediating harms from prohibition.”


Santo joined Tilt Holdings in mid 2020, at the height of COVID, after spending time at Columbia Care Inc. (OTC:CCHWF) which he later helped take public, and prior to that his background was in Finance, Healthcare, Life Sciences and Casino Gaming Equipment.


When asked about what brought him specifically to Tilt, Santo commented, “Tilt really was a tremendous platform. We are in a number of states, Massachusetts, Pennsylvania and Ohio, we have a partnership in New York as well as an entire part of the business that doesn’t touch the plant out in Arizona, Jupiter Research, our hardware division, where we provide batteries and cartridges for cannabis vaping. So we are truly an end to end provider on a business to business front and I think it puts us in a very unique position in a crowded market right now.”


Jupiter Research, LLC announced back in November that it had entered into an agreement with House of Blends Inc. to distribute the Blend Pen™ by Aiden™ in the United States and Canada.


Aiden’s patent-pending Blend Pen™ breaks the standard vape mould by holding two cartridges, side-by-side, within the pen. Each cartridge has adjustable power outputs, allowing consumers to become their own cannabis mixologists, by creating unique THC to CBD blends or combining strains to create their hybrid mixes. Blend Pen™ by Aiden™ also has an accompanying app in development to track and personalise the consumption experience based on usage information. It’s anticipated to be in the market for early 2023.


When asked about how the current cannabis vaping market and how it was affected by the Pandemic, Santo commented “when people were no longer having to go into the office, the utility that a vape provides, being able to step outside the building and take a quick pull and go back, you suddenly didn’t need that anymore. When the utility dropped away we saw every percentage point for vaping went down and smokeable flower went up. As we’ve seen a return to the workplace we’ve seen a return of those all in ones, but we’ve also noticed a change in the consumer in what they’re trying to vape. Before you had a lot of those flowery and fruit flavours, but we saw from people smoking the flower a return to the natural terpenes. So while traditional distillate continues to be a major part of the vaping industry, we are seeing a movement to less viscous forms, the waxes, the shatters the butters, that requires a different technology then what you would use in higher viscosity vaping. That’s where Jupiter is really at its sweet spot. We distribute C-Cell which uses a ceramic centre atomizer wrapper with a cotton wick, which provides much more even heating. We just rolled out three new technologies at MJBiz that are leaning now towards things like blending, things like less viscous forms of vaporisation where more natural terpenes are coming into play. I think what we are seeing is its starting to bifurcate into those who will stay with the high viscosity distillate and those who are moving into less viscous, more pure forms that feel more like you’re smoking the actual flower.”


When asked about the company’s position on brand partnerships and developments, Santo commented, “we have partnered with brands, so we are not buying them and becoming a house of brands that we own. We tend to stay away from things like Celebrity Weed or brands without a lot of depth. If we guess wrong, we are asset light in that mix so it just means that we will find another brand that will fit that same product grid and switch to that brand. We aren’t millions of dollars invested into a brand architecture we might have to reinvent. I think it's an interesting way to balance all the price compression you see and the wholesale noise you hear about.”


Tilt announced back in November that it will launch a cannabis product brand with its partner the Shinnecock Indian Nation, to introduce Little Beach Harvest’s ancestral plant medicine to Massachusetts. Joining the TILT brand partner portfolio is in addition to the Shinnecock Nation’s main collaborative effort with TILT: developing cannabis operations known by the same name, Little Beach Harvest, on sovereign Shinnecock Nation land in Southampton, NY.


The established partnership between TILT and the Shinnecock Nation is an integral component of the product line’s development, with members of the tribal nation joining TILT’s award-winning cultivation team in overseeing strain selection and product direction. From seed-to-sale, both the Little Beach Harvest dispensary and branded product line draw on the Shinnecock Nation’s centuries-long knowledge of plant medicines and natural healing modalities. The initial market release will be focused on flower with additional categories expected to launch throughout 2023. All products will feature a variation of Little Beach Harvest’s newly established brand look, which includes visual cues and colours inherently connected with the Shinnecock Nation.


“Little Beach Harvest naturally fits in TILT’s brand partner portfolio, especially given the Shinnecock Nation’s ancestral medicinal cannabis connection. We have a purpose-driven opportunity to bring Indigenous cannabis onto the same stage as Highsman, Her Highness and Old Pal while also creating a positive impact for a community historically excluded from and by the cannabis market,” stated TILT’s Senior Vice President of Marketing and Communications, Amy Larson. “Introducing the Little Beach Harvest brand beyond New York to other northeast states increases awareness of the part Indigenous communities are playing in the cannabis industry.”


TILT and the Shinnecock Nation announced their partnership in 2021 to create a fully vertical operation on tribal land that is wholly owned by the Shinnecock Nation. Funding and business management services are provided by TILT. Groundbreaking of the dispensary took place in July 2022 and is anticipated to open in early 2023. The 5,000-square-foot dispensary will be along the main Southampton roadway and will feature drive-through service.


Speaking on the difference between Tilt’s 2022 year and expectations for 2023, Santo commented “I think for 2023, people are cautiously optimistic. When you go back to 2022 analysts were predicting the usual growth of 30% and then slowly adjusted. I do think we have gotten so accustomed to ridiculously explosive growth. It was the only industry I ever saw where people looked at 30% growth and considered you a laggard. That’s not sustainable. I do think that the problem with the Investor sentiment is still investor access. This is a high growth industry. It’s specialty agriculture, specialty manufacturing and specialty retail all squeezed together into one industry with regulations differing from State to State. You have to have the right kind of investor base, not the retail investor. Unfortunately how this market was launched paired up retail investors with a high growth stock. The amount of capital that was raised was incredible to me. People were trading on emotion not on the fundamentals. I’m hoping we can make it a little easier for people to invest and find capital in the industry.


Santo also discussed the company’s recent news that the company retired US $7.5 million of its secured promissory notes in the fourth quarter and entered into amendments to the remaining senior secured promissory notes held by certain senior noteholders totaling US $2.1 million to extend the maturity dates of such notes from December 31, 2022 to February 28, 2023. With the payments, the Company has successfully retired approximately US $33.7 million of the US $35.8 million principal of senior secured notes that were originally scheduled to mature in November 2022.


The Company has also signed a fifth amendment to its previously announced definitive agreement with Innovative Industrial Properties, Inc. (“IIPR”) to sell and leaseback its White Haven, Pennsylvania facility. With all other matters for the property already satisfied, the Amendment allows TILT and IIPR to extend the end of the investigational period of the transaction contemplated to a date that is on or before February 28, 2023, to coincide with the new debt facility.


“We continue to be opportunistic in our approach to addressing our legacy debt maturities as well as improving our liquidity position. TILT has had to overcome challenging market conditions to obtain US $40M in non-dilutive capital earlier this year, which along with available cash on hand has resulted in retiring 94% of our legacy senior debt,” said TILT’s Chief Executive Officer, Gary Santo. “At the same time, we have continued to make excellent progress with new and existing investors in our efforts to finalise the terms of the refinancing of our remaining legacy debt.”


Santo went on to discuss the current pricing issues being faced within the industry, where the industry stock prices are now and where they could be over the next couple of years, how the cannabis industry has compared to other industries over the last three years as well as what Tilt has on the horizon for 2023 and beyond.


To find out more information about Tilt Holdings click the link here.


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