TORONTO--(BUSINESS WIRE)--Halo Labs is pleased to announce an update on the Company’s edibles product launch and expansion plan in California and Oregon to capitalize on segment growth. According to BDS Analytics, edibles spending in the US and Canada is forecast to grow to more than $4.1 billion by 2022. In California, ingestibles generated $44 million in sales in April 2020, 3 percent growth when compared to April 2019. In Oregon, ingestibles generated $12.5 million in sales in April 2020 and represents 18 percent growth from April 2019.
In California, Jeff Stewart founder of Outergalactic™ Chocolates, is leading Halo’s ingestibles product launches in California. Since launching in 2017, their colorful line of milk, dark, and sugar-free chocolates have been recognized as, “Best Dark Chocolate Hybrid,” and “Best Chocolate Truffle” by Edibles Magazine. OGC also took home the prize for “Best Chocolate” at the Emerald Cup in 2017. Resident of Mendocino County and a cannabis farmer since 1982, Jeff Stewart is the former owner of The Chief Smokehouse (now known as The Big Chief) on Highway 101 in Laytonville, California in heart of the Emerald Triangle.
Kiran Sidhu, CEO and Co-founder of Halo Labs stated, “We plan to launch sales in California by Q3 2020 with 10 different gummy packages under the Hush™ brand. The gummies will be vegan, gluten free, and feature organic ingredients. Variety in selection is critical to capturing the hearts and minds of consumers. Therefore, in addition to delivering value at a target out the door price of $15 and $18 on 10 piece and 20 configurations, we also are offering a nanotechnology format for quicker absorption in numerous flavors. We aim to offer the best value proposition bar none to the California consumer.”
The Company intends to launch strain specific formulations in sativa, indica and hybrid. Halo plans to manufacture under Halo’s Type N license in Ukiah and roll out up to 36 different configurations in California. Total capacity per day in Ukiah is 1,125 bags or 11,250 gummies per day assuming a 10 piece configuration. Additional edible products will include Hush™ elixirs that are vegan, gluten free, with no added glycerin or sugar.
BDS Analytics found that the ingestibles product category is growing at a faster rate in Oregon than in California. Hush™ currently sits in the Top 10 edibles brands in the state. The Company believes expanding upon its current single piece 50 mg THC gummy and single piece 100mg 1:1 gummy will help garner market share. New configurations include a smaller single 50 mg piece, and 5 and 10 piece multipacks in 10mg and 5mg THC strength as well as a microdose line of 20 pieces in 2.5 mg THC strength. The Company is actively expanding gummy production by adding kitchen capacity onsite in Medford, Oregon as well as expanding contract manufacturing relationships.
Mr. Sidhu continued, “In Oregon we have been producing about 50,000 gummies per month with a third party kitchen. By building out our own capacity and expanding to additional third party suppliers, we anticipate at least doubling, if not tripling production by the end of Q3.”
Building on the California formulation’s anticipated success, new gummy SKUs in Oregon will also be vegan and gluten free. The Company will expand the Hush™ Sizzurp line up as well to include a marionberry flavor in THC and THC/CBD 1:1 formulations for a total of twelve offerings. These elixirs will also be free from added glycerin or sugar.
By expanding the edibles product set, the Company anticipates garnering up to five percent market share in California and up to twenty percent market share in Oregon. This represents $600,000 and $500,000 in incremental monthly gummy business respectively for a total target of $1.1 million per month.
Mr. Sidhu concluded, “Having our own kitchens and oil manufacturing enable us to capture more margin and be aggressive with price. We plan to offer the most delicious gummies and elixirs at the best value to delight cannabis consumers in our core markets.”
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows and extracts and processes quality cannabis flower, oils, and concentrates and has sold over 5 million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products and now via verticalization in key markets in the United States and Africa with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private label products across multiple product categories.
Recently, the Company entered into binding agreements to acquire a dispensary in Los Angeles, 3 KushBar branded dispensaries, five development permits in Alberta Canada, and Canmart which holds wholesale distribution and special licenses allowing the import and distribution of cannabis based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada while having an international presence in Lesotho within a planned 200+ hectare cultivation zone via Bophelo as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but is not limited to, the Company’s strategic tactics that will drive financial results in 2020, the success of new edibles products in California and Oregon, the ability of the Company's current working capital to meet its cash needs for fiscal 2020, and the ability of the Company to continue to build on its current market position.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.