SACRAMENTO, CA / ACCESSWIRE / September 9, 2021 / Demand Brands, Inc. (OTC PINK:DMAN), ("Company" or "DMAN"), https://www.luckychief.com released today a shareholder letter and update:
Dear Fellow Shareholders,
Although we only merged the Viride Research Fund cannabis business and assets into Demand Brands, Inc ("Company") in the latter half of the 2nd Quarter much has already transpired, and we thought it an appropriate time to describe our retail operations more fully and update you on pending acquisitions and product line developments.
With respect to our initial Financial Statement filings, it is important to note the 2nd quarter revenues reflect just a few weeks of operation and a test sale run of two specific genetic strains (3.5- and 7-gram packages) in only 4 test retail locations. In the 3rd Quarter we commenced production of our grinder jars in partnership with a large-scale cultivator who is now supplying base product to the Company while we ramp up distribution in the Northern, Central and Southern CA markets. I had the chance to personally walk our cultivator's facility last week as well as meet with several distributors and during that visit we made some important decisions on what market strains are to be shipped for wholesale versus retail. This was critical as it drives our price points in the stores and maintains brand credibility. As the industry becomes more and more institutionalized, the demand metrics and pricing models are constantly evolving as more and more investment is poured into the segment. During our test run it became evident to us that the pricing models in California were shifting placing certain distributors and strains in much higher demand. To better compete in this environment, we are now offering 4- gram and 8-gram packages and added in the grinder feature which has been received well by our distributors. Currently the Company has approximately $200,000 of product on hand, which we estimate will retail in the $450,000 to $500,000 range. We expect to gradually increase production up to several thousand pounds per month and we estimate that this SKU (Stock Keeping Unit) will be generating several million dollars per month in revenue by the end of the 2nd Quarter of 2022. Initially we have been primarily focused on building a high-quality retail line and maintaining mid-tier price points however the Company anticipates introducing new product lines including extract, edibles, and other smoke type products regularly through the end of this year.
The Company also remains actively involved in the due diligence phase on several synergistic acquisitions which we believe will significantly grow the Company. We have a binding term sheet in place with an Oklahoma based operator and have made a good faith deposit. Should diligence come back successful we will move to complete the purchase. Our goal is to expand into the Oklahoma state market and obtain the company's freeze dry intellectual property which reduces drying and trimming costs by 7-10 days and produces a 60% cost saving in trimming. We believe the Oklahoma market is strategic to our growth as it sits approximately where the California market was 10 years ago, and we see the mid-west states as the next frontier in the US retail expansion. The Company is also in discussions to roll up our California cultivator partner and their microbial provider and we expect to progress these talks in the near term. We also have plans to acquire a patented seed library that holds some of the industry's highest demand strains. We believe that these prospective transactions will result in the Company becoming a truly vertically integrated platform with the best-in-class genetics and consistency, distributing through the California market under the Lucky Chief brand.
On the corporate financing front the Company is in an advance stage of negotiation with an investment bank to lead us in several capital raise rounds plus we are interviewing potential auditors. We also expect to announce in the near term additional executive hires and to retain an Investor Relations firm to keep you all informed more readily.
I am thrilled to be on this journey with you and look forward to building this business with your support.
/s/ Ian Dixon
Chairman and CEO
About Lucky Chief
Lucky Chief is a lifestyle brand and is a pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids. Lucky Chief was one of the first licensed producers of cannabis concentrates in California out of their Type 7 Lab in Oakland Ca and have their own in-house catalog of THC genetics. The vertically integrated "seed-to-sale" operation has been on dispensary shelves since 2016. The brand prides itself on their in-house cannabis dispensary named the Cannabis Outlet with the flagship location under construction in Atwater, Ca.
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes", "belief", "expects", "intends", "anticipates", "projects" "will", or "plans" to be uncertain and forward looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the company's reports and registration statements filed with the Securities and Exchange Commission.
SOURCE:Demand Brands, Inc.
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