NICI Quick Take
Cannafornia is a cultivator, manufacturer, and supplier of cannabis that was founded in 2017 by CEO Paul King and based in Salinas, California. King and his brother first moved to California chasing the opportunity to capitalize on the state’s new legal cultivation laws.
Cultivation: 145,960 square feet, 10 licenses
Nursery: 35,000 square feet, 2 licenses
Processing: 10,000 square feet, 1 license
Manufacturing: 1,000 square feet, 1 delivery license
Cannafornia sells its branded products at an annualized rate of almost $50 million. Its current California footprint includes 200,000 square feet of greenhouse spaced over two properties in Salinas, which includes 35,000 square feet of nursery space for breeding its own strains. The company added an additional 300,000 square feet that will begin producing revenue in late 2020. Cannafornia’s CBD manufacturing facility is located in Sacramento, but the entire production process is still handled by Cannafornia itself.
Its product portfolio includes clones, pre-rolls, eighths, cigars, and vape pens, and the company heavily relies on social media marketing and campaigning with influencers to spread the brand. The company has amassed over one million followers on Instagram on all its accounts.
Its CBD division offers edibles, pre-rolls, tinctures, and balms. This division has partnered directly with championship UFC fighters to promote its CBD products and is also looking to launch a line of products targeted at women.
The company is now looking to expand out of California into Florida, as it is operating at just about full capacity at its Salinas facilities. Cannafornia has struck a deal for a cannabis license in Florida, which is slated to close any day now.
Cannafornia held a private placement offering for aggregate gross proceeds of C$10 million at C$2 a share, which closed on October 31, 2019. This brings its total amount funded to C$13.5 million.
King wants to go public, but he doesn’t want to merge with another company or be bought out. His goal is to wait until the perfect market conditions appear, and subsequently take Cannafornia public in the United States.
|NICI Subsector||Cultivator, Processor|