With services ranging from extraction through on to distribution, Humble & Fume Inc. has it all. A loyal base of 3,000 stores working is no easy feat to achieve, let alone the 1,100 new accounts they plan on servicing this year. This has resulted in 2020 revenues of C$60m, a radical 80% increase from 2019 revenues of C$34M.
Although Humble has the potential for mass distribution, they also create their own brands and products which, when launched, will significantly improve their profit margins and create a more long-term value for customers and investors alike.
Unless you’ve been living under a rock for the past year or two, you’ll know that the North American market for cannabis consumables is rather fragmented. Legalization still takes place within individual select states, with regulations varying along the way. Taking an accretive approach to their mergers & acquisitions strategy, Humble remains well-positioned to help consolidate the market by adding layers to their business to allow for an even broader foothold.
Ever since the pandemic hit the world, many more people are relying on online retailers to get their essentials. Like it or not, for many, this includes cannabis.
Ecommerce, hydroponics and packaging are all different avenues in which Humble is intent on entering into strategic acquisitions and partnerships. Owning every part of your process is critical when scaling a business for not only cost savings, but operational efficiency as well.
What’s The Forecast on Cannabis in the U.S.?
We all know the true north has already legalized the substance and, though the U.S. is still on their way to federal legalization, the industry is already a behemoth. Plus, of course, a growing number of legal cannabis countries = growing demand for legal marijuana. In 2020, the monetary value of the global legal marijuana market was US$24,600,000,000. It is expected to see a compounded annual growth rate (CAGR) of 14.3% from 2021-2028. Essentially, the market will be well over double its current size within the next 7 years.
As cannabis becomes legal everywhere, users (both new and old) will start to experiment with various consumption methods, taking advantage of the comfort of legality. After all, new cannabis users, who previously may have been wary of anything not within the law, often don’t make their start by walking around and smoking a joint.
Ingestible consumption has long been the way for a friendlier, healthier mode of administration of cannabis for recreational to medical users alike. Oils, consumed through skin patches or orally, as well as pills have been the go-to for those needing cannabis for medical and therapeutic reasons, while edibles (candies, pastries, etc.) and vapor pens have been popular for the casual and beginner recreational consumers. It is often the more seasons users who indulge in smoking as a consumption method.
In short: pick your poison, Humble & Fume Inc. has you covered.
Keeping up with the ever-changing market conditions of cannabis south of the border is key for a company like Humble & Fume Inc., which plans on being there every step of the way.
What Role Will Humble & Fume Inc. Play in This Market?
Humble & Fume Inc. has been positioned ahead of the curve for decades within the cannabis market. Connecting cannabis accessory brands with various distributors around North America has been the bread and butter of the business for longer than the established industry has been around. Their fully built-out national sales team can get 90% of carried products anywhere in the U.S. within 48 hours. They are the only agency that can achieve this and can do so with just 4 distribution centers.
Knowing everyone, everywhere comes with its perks. By looking at sell-through within their own distribution channels, Humble maintains a bird’s eye view of what the market wants, in immense detail. Data from 200 brands and 10,000 products that the company successfully distributes around the continent, is readily available with the click of a button.
Naturally, Humble decided to wield this information and bring its own SKUs to market, reversing the classic product development process. Which products did they decide to develop and plug into their massive web of distribution? Easy: the ones with high sales, low competition, and rising demand.
Distribution IS the Game
78% of all Canadian legal dispensaries (amounting to 1313 businesses) are clients of Humble’s wholesale leg; therefore, with rising cannabis consumption on a national scale, it’s no surprise that Q1 2021 revenue was 87% higher than the previous year, as Humble achieved sales of over C$20 million in the course of a single quarter. On top of that, the potential to increase sales margins with the introduction of their own products further compounds the future potential of the company.
If that isn’t reason enough…
- They are one of the leading platforms for the distribution of premium cannabis consumables and their respective consumption devices, across all of North America.
- They boast a complete selection of products and brands that spread across the needs of all kinds of different cannabis consumers.
- Their current North American distribution footprint is extremely well thought-out, which is likely why they have a loyal customer base of over 3,000 stores.
- Cash flow generation and profitability as reflected on their balance sheet, is growing constantly. They are closing in on the inflection point, which is essentially when the revenues start churning out net profits.
- Their partnership and M&A strategy is unmatched and will lead outsized future growth in revenue and profitability.
Disclaimer: Humble & Fume Inc. is an Edge Investments communications client, and we own shares in the company.