As an investor, do you want to own an electric vehicle manufacturer, or one that says they will produce them years down the road?

Because there are a lot of big EV stories hitting the market, and they all sound great.  Big projections of growth for years to come. Many are coming through US SPACs, and receiving big funding, and big publicity.

The problem? They are still years away from production.

Meanwhile I have a nascent EV story in our portfolio that has doubled over the last month. And they will have a vehicle in production, delivered to customers across North America, in months, not years. I expect them to start announcing orders with within weeks.

Add in the fact that Canadian Prime Minister Justin Trudeau has announced a $1.5 billion plan to electrify Canadian transit—that puts a hurricane of tailwind behind this company.

But even without that—after meeting management face-to-face (mask-to-mask), I’m convinced my EV stock has a “pull-product”—where demand is intense and their new EV product (from this trusted supplier with almost a decade of trust built up) doesn’t need a sales cycle—it just needs to be available.

It looks like the time to put up or shut up is here. Through the spring and summer, the market was chasing stories. But over the last few weeks that seems to have flipped.

Consider an EV company formed from a recent special purpose acquisition vehicle (SPAC) acquisition: Canoo. 

Canoo is being acquired by Hennessy Capital Acquisition Corp IV (HCAC – NASDAQ), a SPAC targeting the electric vehicle market.

HCAC and Canoo reached a deal in August. The combined company will have a $2.5 billion capitalization and $600 million of cash.

HCAC stock took two moonshots, one over $12 and one over $13, after announcing the deal. But investors have since cooled, and the stock has come all the way back to $10.

Admittedly, Canoo has some cool ideas.  While the electric-vehicle business is trying to revolutionize how automobiles are propelled, Canoo is taking that a step further – re-imagining the automobile all together.

Canoo’s vision of the future relies on two innovations. 

The first – Canoo is creating a modular car – one chassis fitting many cabins, called the “skateboard”.  

Canoo’s skateboard is a flatbed that includes all the guts. They brag that you could sit on a chair, connect a joystick and ride off on it.

Source: Canoo Investor Presentation

All Canoo’s vehicles use the same skateboard. Sports car, light truck, delivery van and SUV.

Canoo’s second innovation is to sell vehicles by subscription.

Sound crazy? Maybe not as much after you consider that a subscription is not far off a vehicle lease. Take away the down payment and fixed time component – its basically a subscription.

Source: Canoo Investor Presentation

In interviews, Ulrich Kranz, CEO of Canoo, has stressed that the subscription model is geared to millennials. No down payment and rent for the car is month to month. Canoo plans to start with 13 urban centers and go from there.

Canoo could be a big winner in the EV space. It is certainly unique. Its success is going to depend on A. execution and B. whether consumers take to the design and the subscription model.

The catch for investors – the evidence remains two years away – at least.

Canoo Production Starts In 2022

Canoo has three vehicles in its pipeline.  

Source: Canoo Investor Presentation

The first to hit the road will be their “lifestyle” vehicle. It was introduced as a prototype in September 2019. IT is anticipated to be available by mid-2022.

The lifestyle vehicle is geared to mid-market, a reasonably priced automobile but one with some bells and whistles.

The footprint of the lifestyle vehicle is the size of a Toyota Prius. Yet because of the flat-bed design, it seats 6 or 7 passengers.

This car is certainly unique. The rear seats look more like a living room than the back seat of a car.

Source: Clean-Technica

Canoo has allocated space for LiDARs, sensors and cameras, along with the electrical guts to make it work. The vehicles will be autonomous driving-ready.

You can see it in the design. The extra space, the couch-like seats. It feels like a cabin that would have no driver.

Source: Canoo Investor Presentation

Next will come a B2B vehicle, available by 2023. This will be followed by a sports vehicle, in 2025.

It sounds great, but again – years away. I’d rather take on an investment that can show me the product now.

Betting on EV Buses

Now take this for comparison:

The EV company I brought to subscribers is only weeks to months away from selling their new EV product – a midsize transit bus. 

This should be the perfect time to roll out an electric-bus. Cities are struggling with public transit amid the pandemic and looking for smaller footprint vehicles—which is what this company sells.

Buses are a natural fit for EVs. Fixed routes and overnight charging. While bus sales overall have been poor – a direct consequence of the pandemic – EV bus sales have been a bright spot. 

BlueBird announced in their Q2 that their electric powered school-bus sales were up more than 250% year-over-year. They have over 300 electric buses on the road since announcing their first bus delivery 2 years ago.

BlueBird plans to expand their electric bus capacity to 1,000 units.

NFI Group offers the widest choice of non-diesel buses: propulsion, zero-emission battery or fuel cell electric, electric trolley, hybrid electric, natural gas or clean diesel. NFI expects to build 400 all-electric buses next year, 50 of which will be fuel cells.

Justin Trudeau has been clear that the COVID recovery will be a green one. They are already planning rebates on zero-emission buses as well as direct purchases of fleets for municipalities. That’s a $1.5 billion program and a gift to my EV bus company and its shareholders!!

No, my pick is not going to revolutionize what a bus is like Canoo is trying to do, but that is okay too.

Innovation comes with risk. Canoo has a clever design, but it may also have some gotchas.

A conventional chassis has two elements that prevent it from being separated from the body of the car. 

Source: Canoo Investor Presentation

The first is the steering assembly – tying driver steering and the wheel axles. The second are the struts.

Canoo broke both. They have the first ever steer-by-wire platform. And they use a leaf-spring suspension. 

The steer-by-wire platform is untested.  Meanwhile the leaf-spring suspension was used on cars in the 50s and 60s. They were intentionally phased out of passenger vehicles. Their disadvantage was comfort – they didn’t provide as smooth a ride as a modern independent suspension.

Conclusion

Canoo projects some big numbers if you look way out. By 2025 they forecast 75,000 new subscriptions a year and another 20,000 of its last-mile vehicles which will be sold more typically.

But they have yet to produce more than a prototype so far.

My little EV bus manufacturer, on the other hand, has been in the bus business for years. Not only do they have revenue, they have EBITDA!!! This is what they do. They know buses.

Now they are going to sell their new EV bus—to the same customers they have sold buses to in the past. Customers they have a track record with, that trust their product.

Oh, and did I mention they make money? While Canoo burned through $42 million in the first half of the year.

So do you want a story or a real, producing company?

I know which one I want.

To get the name and trading symbol for my #1 EV stock—CLICK HERE

AUTOMATION IS COMING TO CANNABIS

LOWER COSTS COULD DRAMATICALLY
REDUCE COSTS / INCREASE CASH FLOWS
 

You and I have had an incredible year with the junior gold stocks that I have been bringing you on a regular basis. So many big winners……..

Now it is time to pivot to another sector that is getting red hot, especially in the US — cannabis stocks; especially MSOs—Multi-State Operators.

Two Investing Whisperer picks have done incredibly well–Trulieve Cannabis (TRUL:CNSX) and Jushi (JUSH:CNSX) –they have both more than doubled in 2020.
 

But if the Democrats win the White House next week, cannabis companies operating in the US should see another HUGE lift—across the board.  It could be a VERY big catalyst for all stocks in this sector.  And as you know, it’s happening within days.

I know the name of the next US focused cannabis stock that is ready move and I’m going to tell you WHY I believe that move is imminent.   This company – with its unique machine gun, rapid-fire pre-roll machine, is about to jump on the radar of every cannabis investor.

Key shareholders of my favourite US MSO are among the largest shareholders of a major success–—CloudMD (DOC-CSE); which I brought to you earlier this year at just 60 cents), run from 26 cents to $2.80 (that be a 10-bagger!) on hundreds of millions of shares in volume, get picked up by 4 analysts and complete two major financings totaling $70 million.

 

Now, their next play–a US focused multi-state cannabis company—is starting to see big increases in revenue and margin because of A) their scale and B) a proprietary manufacturing process that fills thousands of pre-rolls a day—perfectly.

This is the right stock, in the right sector, with the right team at the right time (especially if Democrats win in November)

Today I introduce you to it.  Tomorrow I give you the name and ticker.
 

Technology is DRAMATICALLY Reducing Costs

In the manufacturing business there is no substitute for speed.  My new US marijuana stock is growing top line and EBITDA with a new, fully-automated technology.  It is now revolutionizing the pre-roll cannabis business. This technology is able to pump out up to  1,000 perfectly pre-rolled cannabis sticks per hour.

Almost all pre-rolls are—to this day—rolled by hand. This is like bringing the looms to the Luddites in the 1800s in England. Faster, better, cheaper.

This machine dramatically reduces labour costs.  It makes a consistent, perfect product every time.  This is the Holy Grail for pre-rolls to become a much larger sector of the fast growing US market.

If it takes your company one hour to do what your competitor does in five……you can do it for 20% of his cost.
If you can make your product at 20% of your competitor’s cost YOU CAN EAT HIS LUNCH!!!

Against that kind of cost advantage–your competition has no hope.  You can underprice him and still make more money.  That pricing advantage is why Walmart went from one store in Arkansas to a $400 billion global juggernaut.

The cannabis industry is about to see an entire industry of lunches get eaten.

This technology—just fully operational since April—I think will revolutionize the cannabis business.

The technology is controlled by one publicly traded micro-cap cannabis company–my new favourite.

And this is not just a technology play—this company already has the leading pre-roll brand in California. 

Revenue is soaring at the company—their last quarterly showed 9-month revenue of $5.3 million vs. $265,000 for the same period in 2019.  That’s growth! And in the quarter ending April 30, EBITDA was POSITIVE–over $130,000!!!  This is what cannabis investors want–real cash flow!

And I think when they announce their year end financials before the end of November–it could be the inflection point for this company.
 
The technology is now cementing their market leadership, and it has the potential to quickly leapfrog their revenue and cash flow.

This company that now has a massive production cost advantage on every single one of its competitors. Control of the technology is like owning a royalty on the growth of cannabis across the country — because this manufacturing process will be the way the entire industry has to go to compete.

This technology is not a story……this manufacturing process is working NOW.  The impact of putting the machine into use on the profit margins of this company has been staggering.

You can see it with your own eyes through the quarterly numbers.  Pre-machine gross margins were around 15%.  Now gross margins are in the low forties! 

Competitors who don’t have this technology can’t compete.

And no competitor has the technology!

The machine means higher profits, faster growth and most importantly…by far the best quality product.
 

You Don’t See Cigarette Smokers Rolling Their Own!!

Here is a stat that I had to fact check several times….

During Q2 2020, in California pre-rolled cannabis products represented just 9 percent of the cannabis market. (1)

Just 9 percent!!  That means that the vast majority of cannabis smokers are buying raw cannabis flower and rolling their own joints.

That seems crazy to me. With our modern world that is entirely focused on making life as convenient as possible — rolling your own is a surprising way to go.

Especially for a product that is meant to relax you….not cause you extra work.

How many of your friends that smoke roll their own tobacco cigarettes?  For me the answer is zero…..yet with cannabis the answer would be almost all of them.

There is a reason for that—and it isn’t because cannabis users love the extra effort.

It is because there hasn’t been technology available that allowed for full automation of cannabis pre-rolling.  Who would build such a machine for an illegal industry?  But now….

The best rolling technologies today are not fully automated and are slow.  Worse, they don’t generate a consistent product.  The joints produced don’t burn evenly, a problem known as “canoeing”.

Cannabis users hate it.

With canoeing, one side of the joint burns much faster than the other.  The end result being a giant waste of cannabis and money……that means unsatisfied consumers.

Because this industry was (is) illegal for years, nobody bothered to do a deep engineering dive and create efficient automation.  Even today, pre-roll production facilities are not much more than little sweatshops churning out low volumes of inconsistent, poor quality products.

That’s why pre-rolls have a paltry 9 percent of the market, a tiny share.

The industry was begging for a better pre-roll mousetrap and now one company has provided one.  The result is going to be a massive move of consumers to pre-roll…..because pre-roll costs are going down and quality is going way up.
 

Exponentially Faster And A Better Quality Product

The pre-roll market share is small because of the poor quality and high cost; not low demand for pre-rolls.
This new technology—I liken it to a “machine gun” of pre-rolls—addresses that quality problem. With the speed that full automation brings, production costs will be a fraction of the existing products.

But it wasn’t easy!

This technology—which will be a massive overnight success–has actually been several years in the making.
The engineering house that is building these “machine guns” is a leading Silicon Valley engineering company.
 
Two years ago, some budding entrepreneurs (pun intended!) asked this high-tech group to use their deep expertise and automate the manufacturing of cannabis pre-rolls.

Creating a machine like this sounds simple enough, but cannabis creates a multitude of complications.  Twisting the cone properly and consistently packing the product were just two of many factors that ended up being VERY difficult.

Filling the cannabis cones within the strict California regulations for weight was a nightmare.  There are thousands of variations of strains that differ, sometimes within a harvest itself, on stickiness, moisture content, grind, volume, etc.

Before this machine, NO automated technology or process could lower costs like this.  It’s complicated, and expensive–but now it’s done!  And it’s proprietary.

With two years of painful work, and some big brains from Silicon Valley pre-roll automation has now arrived.

The important factor here:  this will take anybody an incredible amount of time and money to repeat or duplicate a competing machine.
 

This Is Like A Royalty On The Legalization Of Cannabis

It’s a great place to be—owning the technology that an entire industry needs.  A technology that is magnitudes faster…..and also produces a better quality product.

Management estimates that this pre-roll technology will allow a better pre-roll product to be manufactured with lower costs.

Happy consumers will flock to pre-roll.  Shareholders of the company behind it are going to be even happier!

The old pre-roll methods are like the horse drawn carriage…..this automated pre-roll technology is like a supersonic jet. 

For the company that is the only one using the technology, rapid monetization is happening NOW. 
You see, the company’s own pre-roll brand already has 52% of the infused pre-roll market in California before its revolutionary machine was rolled out.

This brand is already in more than 350 dispensaries, and is expected to be in 400 by the end of 2020.

With automated production now behind it the quality of this already dominant brand is going up…..and the cost to manufacture is dropping dramatically.

Think of what that means.  I’ll spell it out for you.

This company can now sell a high quality product, at a lower price than competitors — and still generate fatter profit margins while doing so.

In the near future, the white label market will be a MASSIVE opportunity—producing other companies’ products for a fee.

Many, many pre-roll producers in the country are now clamoring for the opportunity to leverage this technology for their own brand.  And with regulations that require cannabis sold in each state to be manufactured in that state……this is going to be a national opportunity with machines needed in each state.

When you own the step change in technology, everyone comes knocking at your door.  The white label opportunity is going to be massive.

I can already see what is going to happen to revenue, profits and cash flow to my favourite cannabis stock now.

As legalization spreads to different states, or even federally through a 2020 election result…..there is big upside to these estimates.

Do Not Miss My Next E-Mail………

This US cannabis company is already growing like a weed, with 9-month revenue of $5.3 million so far in 2020—vs. $265,000 in the same period of 2019. 

They’re operating in two states now, with plans for more.  They have a sales platform that can fill over 350 dispensaries with high-quality, low-cost product—now with incredibly low-cost product, thanks to their new automated, rapid-fire pre-roll machine.

There is no viable competing technology.  It will be a land grab for market share, and the field is wide open and clear. 

This company has had a three-year technology head start on an industry full of small and disorganized players.  They own this game.

They have the ability to mass produce a better product at a MUCH faster pace.  This is full automation versus manual processes.

This machine should greatly increase gross margin and cash flow for this company—and they will release their year-end numbers next month!

Between the US election and year end financials, there are two major catalysts for the stock coming in the next few weeks.

In my next e-mail I’m going to reveal everything you need to know about this company and the technology it controls.

This technology is going to change the entire industry as pre-roll becomes the choice of consumers……just as it did decades and decades ago in the tobacco business.

Now here is the kicker.

The company is ALREADY building a SECOND pre-roll machine.  They have to–because they can’t produce enough of their current California leading brand to meet customer demand.

When that second machine kicks in—growth for this company is going to be next level…and while growth does cost money, I am (very) hopeful EBITDA can scale with revenue..  Remember, no competitor has access to this technology.

In the five minutes it takes you to read my e-mail tomorrow you will learn the full details game changing cannabis automation technology it took this company three full years to develop — and why nobody else is even in the ballgame.

Be ready to open that e-mail the moment it arrives.

Sources:

1. https://www.statista.com/statistics/1139553/california-marijuana-retail-sales-share-by-product/

The Market is screaming that oil and gas are on a slow train out, and renewable energy is its way in.

That mmmaaayyyy be true, but I don’t really care. I get paid to make money for my subscribers, not be a macro-economist.

I have been trying to pick my spots in the renewables boom. But it is a mine field, littered with companies with no revenue and few prospects. These are momentum stories – slideshow companies that you can win with but do not want to buy and hold.

I am looking for a real deal. One that I think investors just missed out on is electric bus manufacturer Proterra. After a recent $200 million funding deal, I don’t think it will go with the several SPACs in the US that were courting it. It would have made a GREAT public play. 

But there is another great public play in the EV bus space that I think is about to embark on a huge growth curve. They’ve been in business for years, and two new bus designs–one of them EV powered–is creating a lot of excitement in that sector. I’m expecting large new orders starting in Q1 21.

Proterra was the most recent EV-belle-of-the-ball with the SPAC crowd. With more than 120 customers in North America, Proterra has sold and delivered more battery-electric buses than any other manufacturer.

Their flagship product, the ZX series, is on its fifth generation. The ZX5 bus boasts faster acceleration than other E-buses and more than 300 miles per charge.

Source: Proterra Website

Proterra builds buses, but they are well-known for their battery technology. Customers using their battery tech include Thomas Built Bus, Van Hool, FCCC, Optimal-EV and Bustech. Recently they have expanded to other vehicles: school buses, delivery trucks, shuttle buses, coach buses and garbage trucks.

Proterra is a private company. That means I can’t invest in them… yet. In July Reuters reported that Proterra was considering going public via a merger with a blank-check company – i.e. a SPAC. The story said Proterra had discussed possible deals with “several SPACs”.

This would not be surprising. SPAC’s have become a common way for EV companies to go public. But many (cough – Nikola – cough) have turned out to be smoke and mirrors. 

Proterra is not in that category–it’s a real business. Forbes estimated that Proterra had revenue of $200 million in 2019.  

Proterra has made inroads into Canada. Toronto, Ottawa and Edmonton have all purchased buses from Proterra. Toronto was the first Canadian city, putting 25 Proterra buses on the road last year. Edmonton announced a 40 bus EV fleet deployment in July.

Note the picture above is for LARGE buses.  My small cap EV bus stock makes smaller EV buses, which will be in much greater demand post-COVID as ridership has fallen so much.

In the $200 million funding this week, Proterra was valued at $1 billion. I think this funding takes the SPAC route off the table for Proterra for now, and they will almost certainly stay private. But if all that Big Money is so keen on the sector, I think they’ll be impressed with my small cap EV bus stock. Like Proterra, it has revenue and EBITDA and a big growth path right in front of it.

Electric Buses – Still a Long Way to Grow

Proterra is in the right market at the right time. Going the electric with buses makes a lot of sense. Routes of a fixed length. Overnight charging. 

Yet electric buses have so far only scraped the surface of their market potential. 

China is a leader, with a fleet of over 400,000. But in the United States, that number pales – only about 600 electric buses are in operation.

Electric buses make up only 0.1% of the public transportation fleet in the U.S.

This is a big, untapped market for electric bus manufacturers. 

I like the space so much that I put a new player in the space in our InvestingWhisperer portfolio just last week. This company has revenue and EBITDA–it’s not a dream. (This company is NOT Greenpower, GPV-TSXv, which soared from $2-$30 in months this year. But I sure think it has the potential trade like GPV!)

I expect a very steady stream of positive news flow for my EV bus company. They have a great shot at $60 million revenue this year, and I’m expecting 50% growth next year with a HUGE jump in EBITDA along with that.

This sector is red hot. This stock has not run up big yet. Fundamentals are improving rapidly. Get the name and symbol of this company–along with my full report…

CLICK HERE

Keith Schaefer

Publisher

THIS EXCITING GOLD EXPLORER IS NOT
CHRIS TAYLOR’S NEXT DEAL

 

A Recipe For Success That Has Worked
– Time And Again

Do Not Miss My E-Mail Tomorrow Morning

RAPIDLY RECEDING GLACIERS
ARE OPENING UP NEW GROUND

I’m flummoxed.  I’m flabbergasted. I see that the stock of TAAT Lifestyle and Wellness (TAAT-CSE) has tripled to a high of over $3/share since I wrote about it in July—on huge volume.

I didn’t expect that…well for sure not this soon.  Their hemp cigarette—no nicotine, no tobacco, NO ADDICTION—isn’t set to launch until November or December.

I clearly underestimated how this story would resonate with investors…not that I’m upset—I own 150,000 shares still.

 The main reason for this is the new CEO, Setti Coscarella.  Ex-Philip Morris, ex-venture capital, current entrepreneur–when he does ZOOM calls or conference calls with investors, he maps out a realistic business plan to make TAAT a coveted cigarette brand.

The Market may have thought…hmm…hemp cigarettes (niche) that supposedly tastes and smokes like real tobacco (global mainstream)…I’ll wait to see how it turns out.  Maybe investors don’t believe just how much TAAT tastes & smokes like a tobacco cigarette.

And certainly, to have a big position you have to believe that. Coscarella didn’t commit to TAAT until he smoked it himself and said—not only is this just like tobacco, I think I can make this into a big global company over time.

But product uniqueness aside, when you listen to Coscarella lay out the business strategy—he speaks with certainty and authority.  And with the stock moving up on volume like that, the company will be able to raise money.  You can always raise money with a rising stock price.

This has turned from a product bet into a management bet. And I am more convinced every day that Setti and his team will continue to add a lot of value for shareholders.

I had lots of surprises in my update chat with him this week.  On the stock, they are getting some surprising interest from ESG funds—because TAAT cigarettes could end up getting a lot of people off tobacco.  TAAT is also getting a lot of interest in both the product and the stock out of Asia, which I guess is only natural given the much higher population that smokes there.

I was surprised to hear how important he thinks their patents are.

“We needed to add some intellectual property in addition to our trademarks, so that we have some IP that is also defensible, and can create value for the organization in the long-term going forward.

“With a patent you need some kind of novel process and that’s ultimately what we were able to figure out.

“We figured out a way on how to take the “hempiness” out and then infuse the flavor into the plant so that when it comes out the other end, it has the flavor properties of tobacco, as opposed to the flavor properties of hemp. And that process, from start to finish, had never been done.

“And when we figured out this process and saw that it was novel, in my mind, I said, ‘Well, this is something that needs to be patented so that we don’t fall into the same mistake that the vape industry fell into and the cannabis industry, in that we’re overly reliant on a flavor profile of a commoditized plant’.

“And that’s where I think the value will ultimately end up being.”

Since he came on as CEO a few months ago, he has found a new supplier with much lower costs, re-designed the pack to look like more mainstream tobacco product and brought in another Philip Morris alumni, Tim Corkum, to be Chief Revenue Officer.

“Tim was 20 years at Philip Morris. I thought that he would be a great fit here because he understands the process of negotiating with key accounts.

“And one of the hallmarks of success in this business is working hand in hand with your key accounts and treating them like partners.”

Coscarella said the other invisible partner in creating a global cigarette brand is the sales chain—the wholesalers, distributors and retailers.  He says that’s where most companies and brands fall down.

“What we’re working on now is building out the distribution channel for convenience stores, gas stations, drug stores.

“We are really focused on some key areas so that with the infrastructure that we have, we can succeed in getting the product on the shelf, and then building out the appropriate marketing campaigns that could be focused and tailored to help get the product off of the shelf.

“You see entrepreneurs patting themselves on the back because they went out and did a deal with Costco, or a Bed Bath & Beyond, and then you really drill down in terms of how many products you have, versus how many stores you’re in, and you see that they’re selling two or three things a day or a week, that’s because they just focused on distribution.

“They didn’t really do a lot of the in-store stuff, and that stuff is expensive.

“So you need to focus your efforts so that you can match that with the capital you have, so that you can ensure that you can show the appropriate success and then scale accordingly.

“Those are the things that are engineered and deployed through meticulous detail internally. We need to make sure that the internal infrastructure is set so that we can support that going forward, because success really isn’t in doubt in my mind. I know that we’re going to do well.”

Cigarettes are a stunningly profitable business, so there should be lots of cash flow to support the sales chain, says Coscarella.

“Now, look, the margins are healthy. I don’t want to sort of publicly disclose what the margins would be, at least not yet. As we start to report them, people will see. But it’s extraordinarily healthy.

“We’ll use that to support some of the human capital needs that we’ll need, but it will also be used to support marketing initiatives and then programs that you tend to run with your trading retail partners, to basically ensure that everybody throughout the chain is either making or saving enough money to make it worth their while.

“Otherwise, it just doesn’t become terribly interesting for anybody. With our price point and our margins and our manufacturing, we are able to achieve that in spades.”

There’s one really important factor here I think that investors are not realizing, or are underestimating (besides Coscarella).  With no tobacco, nicotine or addictive properties, TAAT’s hemp cigarettes don’t have the taxes on them that regular, tobacco cigarettes do.

So they can offer TAAT hemp cigarettes at a discount and still have lots of margin to incentivize the sales chain.

“We want to ensure that we can deliver our product at a cheaper price point. It won’t matter what brand of cigarette you smoke, this product is going to be more than affordable for you to try if it’s something that you want to use to help leave your nicotine addiction behind.”

So the plan is simple—they have low cost manufacturing lined up, a modern tobacco-like package design and new marketing channels set to be announced sometime in the near future.  Coscarella has his team and strategy in place, and the stock will allow him to raise the funds to execute (the company just forced conversion of the $1 warrants from a financing earlier this year).

Coscarella says he will move methodically and steady:

“We want to take it out to a few key markets initially. And given the price point and the marketing activities that we’ll be able to do in the markets, I think the product will perform well.

“Historically, on the tobacco side, when you launch a new product in the market, if you can achieve a 0.4% market share within about six to eight months, you’re well on your way. Because that’s the tipping point. Once you get over that market share percentage, then there’s enough momentum behind the brand that it can even start to grow organically. That’s kind of the initial target.

“And I know it doesn’t seem like a lot for somebody outside of the industry. But one thing about the tobacco business is that even fractional percentages of market share come with a lot of zeros.”

DISCLAIMER
 
TAAT Wellness and Lifestyle has in the past 12 months been a corporate client of the OGIB Corporate Bulletin.