Hollister Biosciences Inc. (CSE: HOLL) (OTC: HSTRF) (FRANKFURT: HOB) (the “Company“, “Hollister Cannabis Co.” or “Hollister“) is pleased to announce a series of operational and strategic updates to create shareholder value, enhance; governance, operations and market positioning while preparing the Company for the next phase of its growth.
In November 2019, the Company completed its initial public offering and listed its shares on the Canadian Securities Exchange. At the time of the offering, Hollister was pre-revenue; its business plan was focused on the California market, it was an ambitious start-up in an emerging industry. The Company launched with administration and management primarily consisting of third party providers to enable focus on the rapid advancement of its operational and financial objectives while keeping costs in line with capitalization and profitability goals.
In March 2020, the Company completed its acquisition of Labtronix, Inc. d/b/a Venom Extracts (“Venom Extracts“) which transformed the Company into a multi-state operator and substantially enhanced its revenue, capabilities and reach. Hollister has since transformed from its pre-revenue position in late 2019 into a profitable multi-state cannabis operator. The Company has garnered a leadership position and deep penetration in a high growth limited market. The Company is among the leaders in operational efficiency, return on invested capital and has built a platform designed to scale. Most recently, the company announced revenue guidance for 2021, a Brand Campus to enhance its presence and profitability in Arizona, and two new members to the Board of Directors (the “Board“) as catalysts to lead the next phase of growth. The Company has a strong balance sheet with approximately US$12 million in working capital and no long term debt.
In advance of the upcoming annual general and special meeting of shareholders (the “AGM“), the Company has made a number of strategic enhancements to align governance, leadership, operations, management and infrastructure with its refocused strategy. The refocused corporate and brand strategy is primarily centered on the growth and distribution of owned and partner brands into new states and product categories.
“We plan to internalize functions that were previously outsourced including; communications, finance, accounting, management, investor relations, public relations, marketing, sales and strategy. Building internal capabilities for these functions will enable us to effectively communicate with stakeholders and market influencers, enhance governance and accelerate growth.” said Jakob Ripshtein, Chairman of the Board.
Brand and Communications Strategy
The Company has initiated a rebrand, including seeking a new corporate name and visual identity. The brand is being created to represent a focused vision towards becoming a leading house of brands with a mission to empower consumers with access and a variety of trusted cannabis packaged goods. The Company is planning a robust marketing and communications strategy to increase awareness throughout the investor community and for increased distribution of products and brands.
“As Chairman of the Board, I am pleased to announce the “house of brands” focused strategy and enhanced marketing efforts. I have a long history working in similar environments in the cannabis and the spirits industry during my time with Aphria (now Tilray) and Diageo. We possess the attributes of a leading player; profitable, low operating costs, strong balance sheet and hold extensive capabilities and brand equity in high growth categories. I look forward to accelerating the expansion of our owned and partner brands throughout the U.S. and eventually globally” said Jakob Ripshtein.
Chief Executive Officer
Effective immediately, Carl Saling has resigned as Chief Executive Officer and Director of the Company and has been appointed Senior Advisor to the Board. The Company thanks Carl for his leadership and vision and looks forward to his continued participation and friendship with the Company.
Jake Cohen, the Chief Operations Officer of the Company has been appointed as Chief Executive Officer and a member of the Board effective immediately. Jake is the founder of Venom Extracts, one of the industry’s premier award-winning cannabis concentrate brands. Venom Extracts sales were consolidated with Hollister’s sales starting after the closing in March 2020 and contributed approximately 95% of the Company’s overall sales. Venom Extracts’ product suite is a category leader in Arizona with over 4 million grams of cannabis sold in 2020, accounting for up to 30% of category sales state-wide (per BDS Analytics). Venom Extracts has strong brand recognition and distribution, with products in the vast majority of dispensaries in Arizona.
“I’m humbled and excited to take on this challenge. I have great respect and admiration for Carl as an individual and business leader. He IPO’d Hollister at a very challenging time in the public markets, managed expenses unlike any other public company I’ve seen, and ensured the platform was capitalized and had a team ready for rapid growth. Since the acquisition of Venom Extracts, Carl has been invaluable to the growth of both Venom Extracts and myself individually – I’m proud to now take the torch and execute the strategy going forward. I look forward to Carl’s continued support as an advisor, he’s done a great job preparing for the evolution of the Company” said Jake Cohen, Chief Executive Officer of Hollister.
“This is an exciting time for me as a founder. I’ve seen the transformation of an idea that started at my family’s kitchen table develop into a leading multi-state cannabis company going from no sales in 2019 to USD$70 million projected for 2021. Over the course of several months we have been preparing for these changes, and I’m pleased to have recruited the team that will lead its next phase, most notably with “passing the baton” to Jake Cohen. While supporting Venom Extracts’ growth, Jake and I had the opportunity to work closely. Throughout my 30 years in business I’ve worked with many great entrepreneurs, none have the tenacity, drive and natural capabilities that I’ve seen in Jake. He is a winner and I look forward to continuing to support him in my new role as senior advisor” said Carl Saling, former Chief Executive Officer of the Company.
Chief Financial Officer
Eula Adams, MBA, CPA has been appointed as Interim Chief Financial Officer effective immediately and will be nominated for election at the AGM to serve as a member of the Board. In conjunction with his appointment, Mr. Adams plans to temporarily relocate to Phoenix to ready the financial and operational systems of the Company for expansion. As a priority, Mr. Adams will oversee recruiting a permanent Chief Financial Officer and Chief Operations Officer for the Company.
Eula has had a highly accomplished career spanning five decades across a variety of industries serving public, private, government and philanthropic causes. He has an extensive history in executive leadership and governance roles of large, diverse organizations. Most recently, Eula served as a member of the board of directors and Chairman of the Audit Committee for Harvest Health & Recreation Inc. from December of 2019 through the recent completion of its acquisition by Trulieve Cannabis Corp. (CSE:TRUL), which formed the world’s largest legal seller of cannabis by revenue.
Eula is a graduate of Morris Brown College with a Bachelor of Science degree in accounting, a Master of Business Administration from Harvard Business School, and is a Certified Public Accountant. He spent 20 years with Deloitte (Public Accounting, Taxation and Management Consulting), was the former Executive Vice President of First Data Corporation (Payments and Money Transfer); the former Senior Vice President of Sun Microsystems (Computer Servers, Storage Devices, Software and Services); and a former member of board of directors of MasterCard (U.S. Region). His corporate rise led him to be named one of the 50 most powerful black executives by Fortune in July of 2002.
He serves a number of public sector and non-profit positions and his memberships include: American Institute of CPAs; White House Historical Association National Council; Colorado Society of CPAs; United Way of Colorado; Board of Directors Grow Generation; Congressional Black Caucus Foundation; Sigma Pi Phi Fraternity; Kappa Alpha Psi Fraternity; CareerWise Colorado Board; Volunteers of America Board; Denver International Airport Advisory Board; Colorado Department of Transportation; and New Hope Baptist Church Board of Trustees.
Chief Commercial Officer
Mr Chris Lund has been appointed as the Chief Commercial Officer of the Company effective immediately. He will lead all communications, sales, marketing and branding for the Company and its subsidiaries. As his first initiative, Chris will oversee the rebrand and prepare a strategy for owned and partner brand expansion.
Chris brings more than 30 years experience of comprehensive brand building to the organization. He has played a hands-on role in guiding brand strategy, creative development, product commercialization and go-to-market execution of innovative products and services. As founder and Chief Executive Officer of Perennial Design, Chris played a key role consulting to and acting in advisory roles with iconic brands such as RBC, Loblaw Companies Ltd., McKesson, Home Depot, Bauer, Coca-Cola, Morrisons and Ahold Delhaize, and extended the reach of Perennial’s influence by establishing an office in Bangalore, India, serving clients such as Spencer’s, Easyday, and HyperCity.
“I am super-excited to be working on the rebranding project, and leading commercial strategy going forward. This industry is growing fast, globally, and the Company has the foundation to become a formidable house of brands.” says Chris Lund
Senior Vice President of Finance & Administration
Jill Karpe has been promoted to Senior Vice President of Finance and Administration of the Company effective immediately. Since 2017, Jill has led the finance, administration and compliance oversight functions for Venom Extracts. She has been responsible for all bookkeeping duties, including cash verifications, payments to vendors and payroll. Jill also maintains all human resource, office management and administrative functions for Venom Extracts. She brings 20 years of experience in the financial industry, specifically 10 years in banking and underwriting. Jill’s vast knowledge in finance combined with her Bachelors Degree in Organizational Leadership from Bethel University have made her a powerhouse for managing and organizing both people and numbers.
Board of Directors
In connection with the Company’s efforts to improve governance, investor confidence and market performance, the Board has been refreshed and is now comprised of primarily independent directors, each having leadership and governance experience with relevant attributes to assist in the continued growth of the Company.
In addition to Mr. Jake Cohen, the Company has appointed Ms. Lily Dash and Mr. Brett Mecum to the Board, each of whom will be nominated for election at the AGM along with Mr. Eula Adams. These new appointments supplement the recent appointment of Mr. Jakob Ripshtein and Mr. Kevin Harrington to the Board last month.
Mr. Jakob Ripshtein, CPA
Jakob is the Chairman of the Board. Jakob served as the President of Aphria Inc. (“Aphria“), which was acquired by Tilray, Inc. (NASDAQ: TLRY), one of the largest cannabis companies in the world, and played an instrumental role in its growth throughout Canada, global product innovation and the integration of global supply networks. He joined Aphria after spending years as the Chief Financial Officer of Diageo North America (“Diageo“) (NYSE:DEO) and President of Diageo Canada, the multinational beverage giant behind such global brands as Johnnie Walker, Don Julio, Guinness, Baileys, Smirnoff and Captain Morgan. Prior to Diageo, Mr. Ripshtein held a variety of roles in finance, sales and strategy in various global companies and has been based in Canada, the U.S. and the U.K. Earlier in his career, Mr. Ripshtein oversaw business, sales and tax functions in the Canadian spirits, pharmaceutical and financial sectors. Mr. Ripshtein holds a Bachelor of Business Administration from York University, as well as a CPA and International Tax designation. Mr. Ripshtein is currently the Chief Executive Officer of Perennial Brands Inc, a full life-cycle brand strategy organization.
Mr. Kevin Harrington
Kevin is a veteran CEO, bestselling author and platform-building entrepreneur known to millions as one of the original “sharks” on the 4x Emmy-winning ABC series Shark Tank. His many landmark achievements include inventing the infomercial, pioneering the As Seen on TV brand, co-founding the Electronic Retailers Association (ERA), serving as a co-founding board member of the Entrepreneurs’ Organization (EO) and creating HSN Direct as a joint venture with the Home Shopping Network. Twenty of his companies have each topped $100 million in revenue, and his behind-the-scenes work has helped produce billions more in global sales. He’s launched massively successful products like The Food Saver, Ginsu Knives, The Great Wok of China, The Flying Lure, and many more. He has worked with amazing celebrities like Billie Mays, Tony Little, Jack Lalanne, and George Foreman to name a few. Kevin then built on that success to help pioneer the As Seen on TV brand.
In 2013 after divesting of the As Seen on TV brand, Kevin joined the board of directors of an emerging start-up in the functional beverage space; Celsius Holdings Inc. (NASDAQ: CELH) (“Celsius“), which at the time had a share value of $0.22 and a total market cap of less than $10 million. Since then, Celsius grew into a leading brand in the functional and energy beverage categories. Kevin served on the board of directors of Celsius until August 19th, 2021. Today, Celsius is valued at greater than $7.2 billion, and the share price is greater than $94 per share.
Lily Dash, ESQ
Lily has been appointed as a member of the Board effective immediately. Her background includes extensive governance, legal, transactional and emerging markets experience. Lily is a practicing lawyer, a dynamic entrepreneur with global experience, and a visionary technology and ESG founder. Lily’s vast experience and perspective will support the Company’s growth and expansion. Lily is a Chairwoman of the Board of Directors of Polymath Inc, Member of the Board of Directors of Earth Wallet, and Founder of Villabound Inc., Rexy Inc., and Co-Founder of WiFetch Inc.
Brett has been appointed as a member of the Board effective immediately. He is an innovative and seasoned government relations professional with a record of success at the federal, state, and local level throughout the country. He is known for an ability to build long term relationships, collaborate with stakeholders, and engage organizational grassroots to ensure legislative policy goals are met. He is an expert at understanding legislative processes, bill drafting, and budget appropriations at all levels of government, and is an experienced political operative and fundraiser with expertise running high energy and high-profile political campaigns, political action committees, and independent expenditure committees.
Brett is the Chief Executive Officer of a full-service government relations firm representing corporate, association, and non-profit sector clients in 12 state legislatures through policy development of short and long-term legislative objectives. He has managed 20+ programs that provide meaningful engagement for association members with lawmakers, successfully ended increased taxation schemes on Premium Cigars in Minnesota, Nebraska and New York; curbed new over-regulation of the premium cigar industry in Oklahoma and was the only lobbyist to successfully amend the Arizona Medical Marijuana Act with implementation of testing protocols and new regulatory enforcement of the industry by the Arizona Department of Health Services. Brett is also regarded as a policy expert in the Blockchain and Cryptocurrency space and was the catalyst behind the state of Arizona creating it’s first Blockchain and Cryptocurrency task force.
The Company’s AGM will take place on November 22, 2021. Further details related to the AGM will be provided in a management information circular to be mailed to shareholders and filed on the Company’s profile on SEDAR at www.sedar.com. In connection with the appointments the Board, the Company also accepted the resignation of Mr. Anthony Zelen and Ms. Amasa Lacy from the Board and wishes to thank each for their service.
In connection with the various new appointments, the Company issued 4,375,000 stock options to acquire common shares (the “Shares“) with an exercise price equal to C$0.22 expiring on October 11, 2026. In addition, pursuant to an employment agreement with Mr. Jake Cohen, the Company has agreed to make certain bonus payments in the event of the successful expansion of the Company’s business into new states. Such bonus payments will be satisfied by the issuance of Shares at then current market prices upon achievement of the various milestones.
Amasa Lacy has resigned as Vice President of Production and Director and has been appointed Senior Advisor to the Board. We thank Ms. Lacy for her support and vision in getting the company to where it is today.
As a result of the management changes, the Company has discontinued the services provided by 2710989 Ontario Limited. Alex Somjen and Geoff Balderson have also resigned as President and Chief Financial Officer, respectively. The Company thanks Alex and Geoff for their service. In September, the Company also suspended activities at Dreamy Delivery in Oakland and Sacramento in an effort to reduce costs and align operations with the refocused corporate strategy.
About Hollister Biosciences Inc.
Hollister Biosciences Inc. is a multi-state cannabis house of brands with a portfolio of innovative, high-quality consumer packaged products. The Company produces its own branded products and provides white-labeling manufacturing for other leading brands. The Company’s products are sold in 370 dispensaries across Arizona and California. Venom Extracts, a wholly-owned subsidiary of the Company is a category-leader which sold over 4 million grams of cannabis in 2020, accounting for up to 30% of dabbable concentrate category sales in Arizona.
Products of the Company include Venom Extracts branded concentrates; shatter, budder, crumble, distillates, and HashBone, a premier artisanal hash-infused pre-roll, along with solvent-free bubble hash, branded and white-label pre-rolls, tinctures, vape products and full-spectrum high CBD pet tinctures.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking information” as defined under applicable Canadian securities legislation, including statements regarding the plans, intentions, beliefs, and current expectations of the Company with respect to future business activities and operating performance. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding: the impacts of the changes to the Board and management; the Company’s planned rebrand; the timing for the AGM; the individuals to be nominated at the AGM for election to serve as directors; and expectations for other economic, business, and/or competitive factors. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information.
Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance, or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: regulatory and licensing risks; changes in consumer demand and preferences; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; compliance with extensive government regulation; public opinion and perception of the cannabis industry; the impact of COVID-19; and the risk factors set out in the Company’s annual information form dated August 28, 2020, filed with Canadian securities regulators and available on the Company’s profile on SEDAR at www.sedar.com.
The Company, through several of its subsidiaries, is indirectly involved in the manufacture, possession, use, sale, and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States. Local state laws where the Company operates permit such activities however, investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable US federal money laundering legislation.
While the approach to enforcement of such laws by the federal government in the United States has trended toward nonenforcement against individuals and businesses that comply with recreational and medicinal cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve the Company of liability under US federal law, nor will it provide a defense to any federal proceeding which may be brought against the Company. The enforcement of federal laws in the United States is a significant risk to the business of the Company and any proceedings brought against the Company thereunder may adversely affect the Company’s operations and financial performance.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated, or expected. Although the Company has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information, which speak only as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Hollister Biosciences Inc.