As MedMen falters, Cheech and Chong and High Times Look to fill the Branding Void
In large information this week, Tommy Chong got here on stay with Cannabis.web to announce that Cheech and Chong have been lastly stepping into the dispensary recreation with a deal to speak in confidence to 5 new Cheech and Chong dispensaries in California, Colorado, Massachusetts, and Nevada. During the interview Tommy talked about that they’re some earlier and present MedMen places, and could strive and take over these bodily areas when MedMen reaches a monetary nadir the place they both go bankrupt or need to sell-off shops and property.
Also this week, we’ve High Times making a mad sprint to strive and get into retail hashish by means of a flurry of offers introduced over the past 10 weeks earlier than luck ran out on their lengthy operating Reg A fundraising journey. The clock could have struck midnight this week because the SEC has stepped in and put a halt to High Times’ crowd fundraising due to a failure to file their corporate financial papers on time. While High Times has no downside doing webinars and sending out day by day emails to strive and lure traders to their Reg A providing, they declare COVID-19 has curtailed their capability to audit their cash, however not gather it, therefore they’ll nonetheless take bank card deposits for future inventory certificates, however can’t get those self same financial institution statements audited for the SEC because of COVID-19.
This could possibly be a dying blow for High Times’ hopes for a fast pivot to retail hashish gross sales and a full model turnaround. While High Times has a plethora of “non-material” lawsuits to already cope with, the SEC shouldn’t be a non-public celebration suing them for accounts receivable and lack of funds on service rendered. The SEC is the US Federal authorities, a Federal authorities that has the limitless assets of time and cash to research High Times. If the SEC finds that High Times continued to promote or try and promote shares after their June compliance date for having to get their financials launched, there might be settlement that most certainly embody a protracted delay, or outright ban, on the group’s capability to entry public markets.
But it does beg the query, who would have gained the battle of brand-named dispensaries, Cheech and Chong or High Times? I’ll exclude Planet 13 for now as it’s a single location arrange for the aim of being a vacation spot go to in Las Vegas.
High Times Dispensaries Pros and Cons
-Historical model with nice nostalgic affinity for thousands and thousands of people that get pleasure from hashish
-Strong bodily emblem and branding look
-Marking benefit of utilizing their Cannabis Cup Winners’ merchandise of their retailer chains and utilizing that hook to distinguish themselves from different dispensaries, it’s their advertising “ace in the hole”.
-The model has been vastly diminished since their reverse merger with Oreva Capital
-The lack of digital foresight and planning over time has vastly eroded their model benefit over present and profitable dispensary chains
-Lack of help from the hashish area – Their status within the hashish area retains hitting new lows every day, and whereas most of the people may wish to purchase good weed and shouldn’t be conscious, or , within the day by day drama of the marijuana business, the business itself is in no nice rush to help the model or the present administration staff.
Cheech and Chong Dispensaries – Pros and Cons
-Tommy Chong and Cheech Marin constructed an iconic model that’s nonetheless in pristine form and revered world wide
-Financial backing on the proper time – While Tommy Chong and his new partnerships are elevating cash for the undertaking now, the timing of getting the funds is essential, as in, proper time proper place. With the upcoming implosion of MedMen, the hashish inventory market crash, and the big Canadian producers pulling again on enlargement and present manufacturing, the funding greenback can go quite a bit additional now than 24 months in the past. There are distressed property lined up for Tommy and his staff to scoop up for pennies on the greenback proper now. Real property, rental agreements, leases, nearly all the pieces is on sale, and everyone seems to be searching for some return, something, on their property and capital.
-Chong’s Choice – Tommy Chong and his staff have already got hiqh high quality hashish merchandise in the marketplace that may demand a premium on pricing and shelf area. If the Chong’s Choice suite of merchandise may be expanded and used as anchor merchandise in Cheech and Chong shops, you then simply hit the vertical integration and margin safety “home-run”! As margins will lower for years to return within the hashish area, the “moats” as Warren Buffet refers to them, that Tommy and Cheech can arrange by proudly owning the grows of Chong’s Choice, creating the product, charging premium costs, and then proudly owning the shops that the product is being offered out of is a really mouth-watering alternative for savvy traders that know the way this area works, and what the long run appears like for branding and margins. This could possibly be marijuana retail’s “prefect storm”, solely in a great way.
The head-to-head battle could by no means happen now that the SEC has halted the High Times fundraising efforts, however it will have been an attention-grabbing branding experiment to look at play out in aggressive states like California and Colorado. Both manufacturers enchantment to the identical demographic, nostalgic stoners over the age of 40, who grew up with Cheech and Chong motion pictures and skits, in addition to studying the print version of High Times. That demographic simply occurs to guide the world in hashish product purchases, and shopping for energy on the whole, so each corporations have been hitting the fitting demographics to nice quick income numbers.
In my opinion, Cheech and Chong dispensaries would have gained this battle. Tommy Chong nonetheless has a pristine status, an iconic model, and sits proudly on the Mt. Rushmore of Weed. The public and hashish business will rally across the Cheech and Chong model because it carry happiness, discovered recollections and chuckles, and smiles to thousands and thousands of individuals. And “Hey, Maaaaaan” Tommy Chong has by no means finished anybody unsuitable within the marijuana business, by no means ripped folks off, or lower corners on offers. Unfortunately, the identical can’t be stated for High Times for the reason that Oreva capital merger. If karma is a bitch, Tommy Chong must be simply advantageous beginning a premium dispensary model, whereas High Times and MedMen are about to search out out karma from the SEC may be fairly a painful and lengthy expertise.
TOMMY CHONG ON GOING INTO RETAIL, WATCH BELOW…
TOMMY CHONG TALKS WITH CANNABIS.NET ABOUT WEED STORES!