CFN Media Interviews New High Hampton CEO Gary Latham


Ryan Allway

March 12th, 2019

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High Hampton Holdings Corp. (CSE: HC) (OTC: HHPHF) (FSE: 0HCN) has been focused on vertical integration in California’s nascent cannabis industry. Over the past several years, the company acquired assets that span the supply chain, including distribution, branding and packaging, manufacturing and processing, and cultivation to scale based on its own production requirements, with strategic locations throughout the state.

CFN Media recently sat down with incoming CEO Gary Latham to discuss California’s cannabis market, High Hampton’s position in the space, and why investors should take a closer look at the stock over the coming year.

CFN: California’s cannabis industry had a bit of a rough year in 2018. High sales taxes contributed to lower-than-expected revenue and an ongoing fight between legal and illegal operators. At the same time, the licensing backlog has become an issue for hundreds of companies that were hoping to enter the legal market. How have these trends impacted High Hampton and how do you see them playing out in 2019?

CEO Gary Latham: “Certainly there were lower revenues than expected in 2018 but I hesitate to call out the tax structure as the culprit. I would tend to point more toward the compliance burden and the challenges with testing labs as the fundamental barriers to growth. Consider that everyone had to either build compliant operations from the ground up, or shape existing operations into compliant businesses…that takes work that delays growth and revenue. The best example is pesticides and contaminants. When those regulations kicked in and samples were failing, there was a lot of product that had to be removed from shelves, remediated, or destroyed. Getting used to those nuances cost time and money.”

“The licensing backlog is something to take seriously. In our experience, the State has done a very credible job of pulling together this complex regulatory framework and communicating it to the market. Those of us committed for the long haul are all in and have made a substantial effort to operate within that framework. So we can’t have a situation where our licenses suddenly expire and we’re out of business due to the State’s insufficient bandwidth to process applications. I think the State recognizes this and is working hard to make sure that doesn’t happen. I’m optimistic.”

CFN: High Hampton recently underwent a transition and laid out plans to become a leading brand and distribution company in California. Can you explain the transition a bit and how the new plan differentiates the company from others? What progress have you already made towards the four key strategy elements outlined in the plan?

CEO Gary Latham: “One thing that we observed over the past year has been the continued race to the bottom on pricing for flower and trim. Any impact of license delays notwithstanding, I expect to see that trend continue until the market settles more fully. We recognized that, along with other trends, and were agile enough to make a decision to shift our focus to what we feel will matter most over the long haul…brands, our ability to get those brands to the market through distribution and delivery, and our ability to acquire customers and understand the demands of those customers. Of course, we want control of our full supply chain to insulate us as much as possible from market fluctuations and to enable us to create the highest quality products. So we will ultimately contract for cultivated products and/or grow at a capacity that scales to meet demand for products.”

“In 2018, you saw High Hampton acquire capabilities in the manufacturing, edibles, and distribution space. Those are foundational to our business. This year we laid out the way those elements come together, and we also added a very strategic component to our lineup. In late February, we announced our intent to make a strategic investment in the 2083 Group. That investment provides 2083 with growth capital and gives High Hampton access to 2083’s delivery service and to an in depth understanding of the consumers they serve. That will give us a big leg up in producing relevant products and brands, and in understanding what it takes to attract and retain customers.”

CFN: High Hampton started generating revenue during the first quarter of this year following the licensing of CALIGOLD and Mojave Jane, and Bravo is slated to launch later this year. Can you discuss what investors can expect from these launches and any other upcoming catalysts to watch?

CEO Gary Latham: “That’s correct. We started shipping products from Mojave Jane and CALIGOLD in late February. We anticipate positive response to those products and we continue to see demand that outpaces supply, especially for clean, compliant extracts and concentrates from both Mojave Jane and CALIGOLD. And the demand for CALIGOLD’s award winning chocolates continues to grow. Our distribution capability should come online in September of 2019, which will have immediate impact on revenue. Assuming that we close with 2083 in Q1 as expected, we will also see revenue from delivery as Speedweed’s customer base grows from its existing level of over 200,000 consumers. “

“So in short, what investors should expect from us is growth. The catalysts for real acceleration will happen as we complete the build-outs of our East Los Angeles facility and our West Sacramento facility. Each will include the complete footprint of High Hampton’s operations, from manufacturing, to infusions and packaging, to distribution and delivery.”

CFN: High Hampton recently signed a binding LOI for a minority stake in California’s 2083 Group. Can you discuss that decision in a bit more detail? Are you looking to make other minority investments in the industry and how does that play into your other plans?

“The 2083 investment was an easy decision to make for us. High Hampton has a good handle on the parts of the ecosystem that lead up to the consumer. But we have stayed out of the retail storefront game for a variety of reasons. Nonetheless, we know that the business ultimately boils down to people, and the products and brands they consume. So 2083 and Speedweed give us a way to directly access consumers throughout the state, and do it in a way that is complementary to storefronts (dispensaries). They also give us a way to connect our products and brands with key influencers in the market, which we believe will be critical in the recreational and wellness space.”

“As for other investments, we will definitely look to create strategic relationships and contribute growth capital to parts of the industry that align with our strategy. A great deal of the cannabis business was built on the entrepreneurship and fortitude of small businesses that began and persevered in spite of severe legal challenges. Now we see many of those businesses being marginalized and threatened due to the increased cost burdens of compliance. You can expect to see High Hampton work with these under capitalized businesses either through strategic investments or acquisitions, here in California and in other states.”

CFN: Thank you for taking the time to speak with us. Is there anything else that you’d like to tell investors before signing off?

CEO Gary Latham: “It’s an interesting position to be a company operating fully in the US, while traded on the  Canadian Securities Exchange (CSE), It gives us access to knowledgeable investors which is a huge plus. At the same time, we tend to be viewed in the context of Canada’s cannabis market and macro economic trends rather than in the context of US cannabis market trends. What I can say with confidence is that we have pulled together the core elements of a successful, truly integrated business, and complimented it with a strong team that knows how to execute. This is good time to be in the cannabis business in California and a good time to support High Hampton’s growth in that market and beyond.”

About High Hampton Holdings Corp.

High Hampton Holdings Corp. is a Canadian-based cannabis sector brand and distribution company emerging as a true vertical integrator in California’s legal cannabis space serving recreational and wellness markets. The Company’s U.S. holdings are comprised of assets set up as a vertical stack including a distribution arm through BRAVO DISTRO; branding, packaging, manufacturing & processing carried out through MOJAVE JANE and CALIGOLD; and cultivation to scale via COACHELLAGRO and 420 REALTY. Operating out of licensed strategic locations within the state, High Hampton is leveraging its brand-focused business model to generate sustainable profits delivering quality product by recognized brands.

Disclaimer

The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer/

Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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