“OUR BUSINESS OBJECTIVE IS TO SCALE CULTIVATION, DISPENSARY AND DELIVERY OPERATIONS THROUGHOUT THE STATE OF FLORIDA” BRADY COBB, CEO, BLUMA WELLNESS INC. (CSE:BWEL.U)
The Rise Of The Medical Marijuana Market…
The global medical marijuana market is expected to register a CAGR (Compound Annual Growth Rate) of 34.00% to reach US$54,677.1 million by 2023.
The use of medical cannabis in North America and Florida continues to grow and is now accepted as a legitimate option for patients who suffer from medical problems like chronic pain or seizures.
According to a new report, the global legal marijuana market is expected to reach US$73.6 billion by 2027.
…And Rise Of The Recreational Marijuana Market…
“Consumer spending on cannabis is growing strongly in North America, as its acceptance increases and the number of US states legalising the product for medical and recreational use increases. Sales in the US are expected to continue growing at 23% per annum out to 2024.”
“…at the current growth rate, more cannabis will be sold in 2030 than soda drinks.”
Global financial services firm Morningstar Inc. has said it expects US recreational cannabis sales to grow at a 25% CAGR and US medicinal cannabis sales to grow at a 15% CAGR.
The U.S. Marijuana Market – The Legal Situation…
In the U.S.A, Marijuana is currently legal for a medical use in 33 states, and legal for adult use/recreational use in 11 states and in Washington, DC.
About 85% of Americans support legalizing medical marijuana, and it’s estimated that at least several million Americans currently use it.
The Medical Marijuana Industry In The State Of Florida
Florida residents voted to legalize medical marijuana in November 2016 – permitting residents with physician-approved debilitating medical conditions to enjoy safe, legal access to medical marijuana products – although smoking medical cannabis was only approved in March 2019.
The Bill (SB 182), which came into effect on March 18th 2019, also allows patients to receive 2.5 ounces of cannabis flower per month.
As yet, Florida has not legalized recreational cannabis. However, several groups are working to have a constitutional amendment to legalize recreational use of cannabis added to the 2022 ballot.
According to the Office of Medical Marijuana Use (OMMU), Florida has over 367,000 qualified medical marijuana patients (with patient numbers growing weekly) and about 2,500 qualified physicians.
READ OUR SPECIAL REPORT – For a deep dive into the huge opportunity and leading management team that Bluma Wellness has brought to the market
The Future Growth Of The Legal Marijuana Market In Florida
Given that Florida has the fourth largest economy in the U.S.A. and an aging population in greater need of therapeutic and medicinal cannabis use, combined with a broader list of addressable medical conditions that can be treated with cannabis than in many other states, the prospects for future sector growth appear positive.
Arcview Market Research and BDS Analytics put the value of Florida’s medical cannabis sector at US$770 million in 2019, but expect legal cannabis spending to rise to US$1.74 billion by 2022, which would make Florida the 4th-largest cannabis market in the U.S.A.
These factors have attracted many cannabis providers to the market, many with a short-term perspective based on selling poor-quality products from multiple stores, a strategy which – in a post-Covid 19 world and with increased customer awareness – will result in long-term failure.
One company however has adopted a completely different approach based on cultivating and selling high-quality premium products, a focus on understanding the customer’s consumer needs and wants, a no-discount pricing structure providing increased margins, and a market-leading next-day delivery policy, all coordinated with a world-class high-tech track and measure system for optimal performance.
And this company is Bluma Wellness Inc…
Bluma Wellness Inc. (CSE:BWEL.U): A Strategic Business Success Model For 2020 And Beyond…
Based in Florida, U.S.A, Bluma Wellness Inc. (“Bluma”) is a fully-licensed, legal, medical cannabis business set to generate over US$27 million in revenue in 2020, a figure projected to rise to over $60 million in 2021.
This growth can be attributed to the contrarian company policy of developing a high-quality product offering first, a true focus on consumer wants and needs, assembling an experienced cultivation team, and only then going to market whilst avoiding the mainstream marijuana market’s current fixation on the flawed discounting and over saturated retail store business model.
Bluma’s view is that as the market matures, consumers will actively search for and demand quality products, as they become more educated as to what constitutes good-quality cannabis.
When it comes to plants, Bluma’s focus is on the quality of the genetics, growing the plant properly, investment in technologically advanced operational facilities, together with the expertise of their investors, growers and production team.
Their aim is simple: to own the premium flower market and flower-derived product market in Florida and any other state they venture into.
Why To Invest In Bluma Wellness Inc. (CSE:BWEL.U): The Four Pillars Of GrowthPILLAR #1) Investing in cultivation, processing and ‘grow’ to produce the highest-quality product
GOAL: a significant increase in the available premium cannabis product to sell to its customers after recent investment in its own cultivation and processing facilities in Florida.
- Bluma Wellness Inc. aims to grow the best cannabis in Florida, and its products sell at a premium to average market prices.
- With consistent quality control in place, it has consistently produced premium product, free of pesticides, fungicides, fungus, contaminants, and any bacteria.
- Current offerings include prime and rare strains of cannabis flower such as Mac1, Runtz, SherbD, ChemD, Chem91, I75, Fish Whistle, Dirty Lemons, and Ebony and Ivory, among others. It also sells solvent less live rosin and other concentrates, vaporizers, vaporizer accessories, and vaping cartridges.
- The company currently operates 78,000 square feet of cultivation facilities, but will extend this to 113,000 square feet by Q1 2021.
- Four retail dispensary sites in Florida currently, and a total of ten (10) by the end of 2020.
- As part of its current growth strategy, it recently completed upgrades of its processing, extraction and distillation laboratory at the Indiantown Facility in Martin County, Florida.
Bluma Wellness Inc. (CSE:BWEL.U) – Increased Production From July 2020…
The first harvest from its new state of the art Nexus Greenhouse in Indiantown is expected to reach dispensaries and delivery hubs in mid-July 2020.
This means that from July 21st 2020, plant production will go from 300 pounds a month to 1,500 pounds a month.
… In A State Of The Art New Facility With Unique Features…
The Indiantown facility uses cutting-edge technology to maintain constant growing conditions, with an indoor temperature at 73 degrees and 50% humidity, regardless of outside weather conditions while being able to harness natural sunlight as its primary light source.
It achieves this by:
- Using 25-50 computer-controlled water sensors in each room (to make sure plants aren’t over-watered)
- Installing light density sensors in each room (to enhance plant growth and production)
- Monitoring temperature and humidity to maintain constant standards (whilst factoring in variances at different times of day.)
- Using yield data to ascertain different strain yields (based on water, temperature and humidity)
- Constant Yield Analysis (to group-set the like-minded plants together – in future harvests – to generate larger yields without additional expense.)
This contrasts with the majority of MSOs (Multi-State Operators) struggling to make a profit due to their short-term focus on store openings and discounted inferior-quality products instead of investing in their cultivation facilities.
PILLAR #2) Focus on ‘next day’ home delivery and curbside pick-up (instead of opening multiple stores).
“Our business objective is to scale cultivation, dispensary and delivery operations throughout the State of Florida”
- Together with its in-store, call centre, and on-line ordering facilities, Bluma Wellness Inc. recently started Florida’s first approved cannabis curbside pickup network.
This was as part of an immediate response to the COVID-19 pandemic and was approved via variance from the State Department of Health, OMMU.
- The company also offers an innovative next-day door-to-door e-commerce next-day home delivery service, where orders can be placed online, customers can use CanPay and also cash for payment, and a dedicated fleet of delivery drivers provides product fulfilment to the end user.
- A loyalty rewards program is offered as well, and consumers must have a medical marijuana card to purchase products.
A Regulatory Environment Favorable To Bluma’s Business Model…
The current controlled regulatory environment in Florida offers Bluma Wellness Inc. a unique opportunity to build out assets with limited competitors and high barriers to entry to new entrants.
The company benefits from being a fully integrated producer of cannabis and selling high quality branded products to its growing customer base in Florida.
The current business model for the majority of cannabis companies is to open large numbers of stores, on average a 2-year time period with a $500,000+ start-up cost in Florida, together with the complications of legal compliance and municipal government hostility in certain locations.
Bluma Wellness Inc’s stated goal is to:
“Sell 80-90% as much flower as competitors, with only 25-30% of the store, to deliver like Amazon and offer a premium curbside pick-up service as good as Chick-fil-A.”
This approach reflects a broader retail trend of increased home delivery, particularly in a post-Covid economy, and represents a cheaper, more efficient way to deliver products to the end user.
Fewer Stores, Greater Customer Connectivity…
Bluma Wellness Inc. forecasts a 5-fold increase in retail and delivery locations in the next 8 months, from 3 in July 2020 to 15 by end of March 2021 (compared to 50+ stores for most of its competitors), with an end goal of a total of 21 dispensaries by the end of 2021:
- Each store with its own delivery hub (with custom-designed optimization software and proprietary designed middleware specifically built for next-day delivery)
- Each store also offers its own curbside pick-up facility
PILLAR #3) Building A Premium Brand(Based On Company-Wide Commitment To World-Class Excellence)
- To become a cultivator of consistently high-quality cannabis
- To provide high-quality product and service with premium pricing with no discounting
- To offer an inviting and friendly retail experience with good old-fashioned customer service
- To develop a strong brand generating deep customer loyalty
- To offer customer-focused next-day home delivery, and not a ‘temporary retail presence’ like other companies in the marketplace.
- To become the premium brand of Florida’s cannabis providers
As Bluma Wellness Inc.’s CEO Brady Cobb puts it:
“We aren’t just a better more efficient operation, we also aren’t in a race to the bottom as we focused on product quality and our brand, to protect our pricing. As cannabis gets commercialized, margins will shrink, but we will be insulated given our premium branding, pricing and most importantly flower. Everyone else is already at the bottom of the market, and they better buckle up for what’s to come.”
PILLAR #4) Using Technology/Metrics To Impact/Increase Bottom Line Profits(Internalisation of company-wide philosophy of constant marginal gains.)
Bluma Wellness Inc. has placed technology and the application of KPI metrics at the core of their business growth.
In the growing sphere all Bluma’s lab technicians have BioChemistry degrees, enabling them to maintain consistent levels of high-quality product.
Bluma’s focus on quality, and not price, has ensured that margins have remained high, and their extensive use of real-time technology enables a rapid analysis of all KPIs company-wide.
This has enabled them to rise to 2nd place in Florida for the average pounds of product sold per store, and selling over 30% more flower than competitors with only 15% of the number of stores.
- This has been made possible by forensic analysis of each store’s performance
One example of this is CFO Harry Rosenfeld (former Roadhouse Grill CFO) implementing staffing models based on matching the number of staff to in-store customer volumes at certain times.
Another key benefit to customers is the development of an in-house app via Bluma’s internal e-comm system, which enables customers to log onto app on their phone, set up a personalised auto-order facility and pay for products.
Company-Wide Data Tracking For Maximum Results In Minimum Time
Bluma Wellness Inc. have collaborated with Next Choice Advisors (NCA) in order to create real time and complete data tracking of all key systems we use
These data tracking applications include:
- BioTrack (seed-to-sale system)
- PayMaster (Payroll/employee records),
- EnFleet (fleet management for delivery)
FINAL SUMMARY: based on the factors outlined in this document, the prospects for future sector growth appear highly positive, with Bluma Wellness Inc. set to establish itself as a leading service provider due to the:
- Company focus on providing high-quality product
- Market-leading next-day home delivery and curbside pick-up service
- Vertical implementation of business technology to provide real-time KPIs in all business areas, to streamline operations and productions and increase growth.
- Experienced leadership and production team
- Fewer stores compared to competitors and using them as delivery hubs and curbside pick-up points
- Continued growth in new customers in Florida’s expanding market of medical cannabis users.
READ OUR SPECIAL REPORT – For a deep dive into the huge opportunity and leading management team that Bluma Wellness has brought to the market
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