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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https://www.investorideas.com/Audio/Podcasts/2023/011723-Cannabis.mp3
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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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