Pot stock investors can’t afford to only watch the biggest names in the industry. If you want to make sure you’re playing the industry right, you’ve got to keep an eye on the penny pot stocks too. That’s why today, Rich is once again talking to Kiran Sidhu, CEO of the up-and-coming Halo Labs (OCTQX:AGEEF).
A former M&A banker and a serial entrepreneur, Kiran has been CEO of Halo Labs since 2016 and Director since 2018. Prior to that, he was the Chairman, CEO, and Founder of Transact Network, and the CFO of On Stage Entertainment (NASDAQ:ONST).
Today, he returns to RichTV Live for a record-breaking fourth time. Since Rich first profiled the company in August, Halo Labs has achieved some pretty important milestones. So let’s jump right into it.
Halo Labs Poised for Growth in Africa
Halo is a leading cannabis extraction company that manufactures oils and concentrates, having produced over 4.5 million grams since inception. The company leverages a variety of proprietary processes and products. With a consumer-centric focus, Halo markets its innovative, branded, and private label products across a number of categories.
The company currently operates in California, Oregon, and Nevada. Its most exciting holdings, however, are in the African nation of Lesotho.
The Kingdom of Lesotho is known as “the best place in the world to grow cannabis.” This is largely due to its low-cost labor, its proximity to Europe, and its ideal climate for cannabis cultivation. These factors have drawn several Canadian cannabis companies to the area, including Halo.
“In terms of cultivation [licenses], ours is the largest,” says Kiran, who just returned from a visit to Lesotho. “We have about 1,000 plants that have taken quite well to the local conditions. The genetics are taking really well and we’re really happy with what we’ve seen. We couldn’t be happier.”
On top of that, Lesotho’s government is famous for being very pro-cannabis business. Two years ago, it became the first African country to legalize the cultivation of marijuana for medicinal purposes. Now Kiran confirms that even the King of Lesotho has taken an interest in Halo’s success.
Halo Labs Expands into North California
Returning stateside, Kiran discusses his company’s recently announced plan to acquire and merge with Mendo Distribution and Transportation (MDT).
Based in California, MDT holds a Type 11 cannabis distribution license and manages a Type N license on its 4,500 square foot facility. The acquisition, costing $4.75 million, will be paid for with Halo stock. This will preserve the company’s strong cash position.
Upon completion of this acquisition, Halo Labs will be able to produce and distribute product infusions such as edibles. The company expects this to increase revenue and gross margins across all Californian operations while reducing distribution costs.
“The acquisition gives us a nice foothold in a place where you have to be,” explains Kiran. He’s referring to the Californian cannabis market, which is already worth $3.1 billion. That makes it the world’s biggest legal market, and it’s still growing all the time.
Halo’s Q3 Results and Forecast
For the three months ended September 30, Halo Labs posted gross profit of $2.9 million and a gross margin of 41%. This was the company’s best quarter since its inception.
For the year-so-far, Halo raised $25.4 million in revenue, which represents a 223% increase from the same period last year. In 2020, the company plans to further increase margins in Oregon and California, continue to expand internationally, and expand into CBD product lines.
AGEEF stock is currently priced at $0.27, up from $0.19 at the start of November.
Do you think Halo Labs is a smart pot stock penny play? Let us know your take on this exciting extraction company.
Featured image: DepositPhotos © PromesaStudio