After the CEO of GTEC said he’d buy this stock, we wanted to make sure our members knew all the strengths, weaknesses, opportunities, and threats of the company…
Norton told us that he would buy Icanic Brands (OTC: ICNAF).
In addition to Norton’s video response, we also wanted to share with you a S.W.O.T. (strengths, weaknesses, opportunities, threats) analysis of Icanic from our research team for all of our members.
Icanic Brands is a vertically-integrated operator in California, which was a $4.4 billion market in 2020. It has everything from cultivation to manufacturing – even including labeling and testing – in its portfolio of operational assets.
This control allows Icanic to keep production costs down. This is evident in its 41% gross margin in its most recent quarter – a number fueled by revenue growth far outpacing production costs.
Icanic has a distinct focus on developing automation technology for its manufacturing processes. Currently, its two most advanced pieces of tech are a pre-roll machine that automates the grinding, filling, and rolling of its pre-rolled joint products and an inventory management system.
It has a distribution partnership with cannabis distributor NABIS, placing Icanic products in 375 of California’s 620 dispensaries.
Icanic is still a small producer.
It has limited capital to work with, and despite improving operations, has still not achieved profitability.
As such, Icanic will have to rely on its relatively small C$2.2 million in cash and whatever external capital it can raise to continue funding its operations and expansions.
Its main market is California, but Icanic also has cultivation and manufacturing assets in Nevada.
Its plan is to test its existing brands in Las Vegas. This move can lead to both diversification benefits and increased brand awareness.
Should the market in California slow down, it still has operations in Nevada that can ease the burden. For brand awareness, even more consumers will have eyes on Icanic products – especially tourists.
If the consumers have positive experiences with Icanic products, they may recommend them to friends or seek them out in their home markets.
Icanic is also continuing to invest in technology. It hopes to further decrease costs by automating additional manufacturing processes like labeling to further decrease costs.
There are also many buyers looking to scoop up promising, smaller operators with hopes of increasing their market share. If Icanic can continue improving its operational efficiency, it may prove to be a valuable acquisition target.
Its Nevada expansion is a double-edged sword. While it can serve as an opportunity, there is the threat that expansion into a new market is a less responsible use of its capital than expansion in its main market. In other words, dedicating resources to Nevada expansion may be less efficient than scaling operations in California.
One response to “Icanic Brands S.W.O.T. Analysis”
May 27 2021