Feb. 17, 2021 12:20 PM ET | SOURCE: Seeking Alpha
- The business hopes to support all exchanges of cannabis, and it currently covers 88% of the California market.
- M7 has inserted itself as a primary player within the supply chain of California’s cannabis industry, and for cannabis-friendly investors, this business model is set for growth.
Manifest Seven (CSE: MSVN; OTCMKTS: OTCPK:MNFSF) (“M7” or “Manifest7”, or the “Company”), an omnichannel logistics network for legal cannabis, is building California’s distribution infrastructure for medicinal and recreational marijuana use. The company terms itself as an “a cannabis superhighway,” and it aims to connect dispensaries across the state, from Sacramento to San Diego. M7 oversees all delivery routes through its proprietary software solutions, and it offers accounting insights and connection point data for retail cannabis sources. The business hopes to support all exchanges of cannabis, and it currently covers 88% of the California market. To date, it has issued four licenses to retail stores, and company distribution centres transfer products to over two hundred distinct dispensaries. M7 has inserted itself as a primary player within the supply chain of California’s cannabis industry, and for cannabis-friendly investors, this business model is set for growth.
Manifest7 recently announced two notable developments for its direct-to-consumer brand Weden, stating that it would expand its distribution hubs from northern California to Oakland and Brisbane. Both cities connect directly to M7’s new scaled facility, a massive delivery factory that expanded overall operational square footage by over a thousand percent. The updates have helped improve workflow by 65%, including space for a larger delivery fleet. With that kind of infrastructure, M7 is poised to take over the San Francisco Bay area submarket. Pierre Rouleau, M7’s Chief Operating Officer commented: “As we continue to expand Weden’s statewide brand presence, we gain important touchpoints with end-consumers throughout California and an opportunity to demonstrate the unparalleled support offered by our 1-800-CANNABIS customer service centre. We are thrilled to have the opportunity to serve the Peninsula community by offering a robust menu of California’s most sought-after cannabis products.” With M7’s entrance into Brisbane, the Weden brand can employ local on-demand courier services to dispensaries within an hours radius. With over three million residents in the lower bay area, M7 can expect drastic increases in revenue.
The Oakland developments help M7 shore up its existing operation in northern California by extending the current business-to-consumer on-demand delivery services. The move into Oakland will improve fulfilment capabilities; response times for orders should decrease while a wide range of product offerings can now store in inventory. Dispensaries in the Oakland area are primed for sales as users demand for delivery options increases with the advent of Covid-19. Sturges Karban, M7’s Chief Executive Officer made note of this in his press release, stating: “As we progress the statewide expansion of our core regulated cannabis operations and advance the Company’s business toward consolidated net profitability, we are keenly focused on optimizing the efficiency of our operations. Our newly repurposed Oakland facility will allow Weden to more effectively address the growing demand for cannabis delivery services in local communities throughout the San Francisco Bay Area market that, to date, have been largely underserved. [Sic]” With both Oakland and the new facility in Brisbane active, the M7’s balance sheet should see improvements.
The expansion events follow the company’s Canadian Securities Exchange listing after it performed a reverse takeover transaction. The listing gives Manifest7 better access to capital markets and global visibility. Media coverage could help spur further action in markets outside of California. For example, a primary note holder exercised close to four million in convertible notes and common stock purchase warranties. Manifest7 used the influx to issue nearly five million Class A Voting Shares to investors. The infusion of capital sets Manifest7 on a firm financial footing, even with the expenditures spent on facility improvements. Such public votes of confidence demonstrate to investors the underlying strength of the company’s structure. Expect stock valuations to increase as more warrants convert company debt into usable equity.
Manifest7 also takes advantage of e-commerce software solutions to provide its services – the e-commerce elements of the company might pique investor interest. M7’s proprietary software supports the accounting and sales data of many Californian dispensaries, all of which helps stabilize the cannabis industry on the retail level. The business-to-business back end offerings that Manifest7 supplies offer a secondary profit stream, regardless of how well the primary delivery services function. Having both business-to-business and business-to-consumer revenue models denotes M7’s business healthy business operations. Of course, the ninety-six percent revenue increases are sure to entice new buyers in the small-cap market space. M7 announced its financials in its third-quarter report, and it depicts a strong balance sheet. Manifest Seven is well on its way towards net profitability; expect continued growth throughout 2021.