1933 Industries has signed a Management Services Agreement to provide operational and accounting services, general management and oversight to Green Spectrum Trading, a medicinal and recreational cannabis business licensee in the State of California, for a two-year term. Green Spectrum operates as a licensed cannabis cultivator, manufacturer and distributor, and holds a pending home delivery business license. According to the company, the Agreement serves to establish a local presence for the Company's Alternative Medicine Association (AMA) branded products outside of Nevada, and expands the footprint of its CBD wellness line.
Deep Manufacturing and Distribution Experience Enables Agreement
Under the terms of the Agreement, the Company will provide the services necessary for the operation of Green Spectrum's business, including oversight over the general management of the business and operations, product manufacturing, distribution efforts, staffing, sales, marketing, accounting, and compliance. The Company will utilize its expertise in manufacturing and building distribution networks to undertake all initiatives relating to the establishment of a new cannabis manufacturing and extraction facility, inclusive of funding building and tenant improvements, providing start-up costs for the acquisition and installation of equipment, rent, labor, utilities, marketing, etc. The Company grants Green Spectrum a non-exclusive right and license during the term of the Agreement to use the Company's licensed marks to produce, manufacture, market and sell the Company's licensed products within California.
California's Industry Potential
According to Statista, the California cannabis industry is projected to generate over $6.59 billion in sales by 2025. By partnering with Green Spectrum, the Company will have the advantage of working with an established cultivator to build manufacturing and expand its distribution channels for its brands with the goals of becoming a statewide leader in the industry. According to Statista, California's cannabis industry is larger than Arizona, Colorado, Oregon, Nevada and Washington State combined and larger than the Canadian cannabis market.
"California is already positioned to become one of the largest cannabis markets in the world and setting up a local operation has been a key priority for us. Manufacturing our THC AMA branded line of concentrates and CBD Infused Canna Hemp™ portfolio of wellness products in the state enables us to reach markets across the most populous hubs and establishes us as a multi-state operator with a turnkey model that can be exported to other states", commented Mr. Chris Rebentisch, CEO.
He added, "We are taking the same vertically integrated approach that we have successfully built in Nevada to the California market, where we will control cultivation, extraction, product manufacturing, branding, sales and distribution. Our oversight will ensure the consistency and quality of our premium branded portfolio and will leverage our already established distribution channels reaching dispensaries and retail outlets. This is an exciting opportunity that enables our company to capitalize on California's growing market. We are pleased to partner with Green Spectrum and their cultivation expertise to quickly scale up operations."
Mike Mirolla, CEO of Green Spectrum remarked, "We selected 1933 Industries because of their proven track record in Nevada, their deep understanding of the cannabis markets and their considerable expertise in manufacturing, distribution and brand development. The partnership provides the ideal opportunity for both companies to leverage each other's strengths as we move forward in establishing manufacturing and distribution in California."
The Company expects that the new manufacturing facility in California will be operational by end of October, 2019.