NICI Quick Take

Shelter is a consumer-focused brand and packaging development company that has. It operates three divisions: Shelter Brands, Shelter Farmstead, and Shelter Craft Collective.

Shelter Brands consists of quality cannabis pre-rolls and vape pens under the names Wildlife, Journey, Botany, and Wayfarer.

Shelter Farmstead is the company’s processing and manufacturing facility where these products are produced. This 15,000 square foot facility was purchased through a definitive agreement to acquire Agro-Greens Natural Products Ltd. for a total purchase price of $6.2 million ($3.2 million in Shelter shares, and $3 million in cash over two years). The purchase price included Standard Cultivation and Processing licenses, and both medical and recreational sales licenses.

The Shelter Craft Collective offers assistance in processing and distributing harvests for other licensed producers, providing branding opportunities, white-label services and access to Canada’s distribution chain. Shelter is currently negotiating a Cannabis 2.0 white-label project with Canadian cannabis giant Aurora Cannabis. Previously, the company completed a white-label contract with MediPharm Labs for the supply of 365,000 vaporizer pens. MediPharm has since delivered its first Cannabis 2.0 shipments to Saskatchewan, British Columbia, and Manitoba, which included custom-formulated Shelter vape cartridges under the Wayfarer brand.

In Q2 2020, Shelter will launch Shelter Market, its medical e-commerce platform that it purchased: it has a Letter of Intent in place to acquire a large Canadian medical cannabis e-commerce platform that’s currently grossing about $1 million each month. However, Shelter has agreements in place that’s projected to reach $47 million in revenue in 2020, with $17.4 million in profit for 2020. By the end of 2024, Shelter projects to make over $300 million in annual sales with over $100 million of that kept for profit.

However, there’s not much about the executive team that sticks out. They’ve had their fair share of leading small cannabis businesses, but have never operated businesses of this caliber and potential. However, the man responsible for Aurora Cannabis’s operations, Dieter MacPherson, is on Shelter’s advisory board. He could be a key component in scoring the aforementioned white-label contracts with Aurora for its Cannabis 2.0 products.

IPO Details

Valuation $25.3M
Total Raised $2.8M
NICI Subsector Processor