TPCO Holding Corp - GRAMF stock
OTC Symbol: GRAMF
Company Profile[edit]
The Parent Company Holding Corp. (TPCO) [OTCQX: GRAMF] is a California-based cannabis company with operations targeting the recreational and wellness markets in the United States. It integrates seed-to-sale operations incorporating cultivation, extraction, manufacturing, distribution, retail, and delivery to establish top brands boosted by its direct-to-consumer ecosystem. The company offers its consumer-centered products under eight owned and licensed brands. Its product portfolio includes capsules, chocolate, concentrates, gummies, infused pre-rolls, tinctures, topicals, vaporizer cartridges, and jarred and bagged whole flowers. The firm owns and operates three cannabis manufacturing assets spanning approximately 20,500 square feet in California, producing its form-factors above. Its product line includes Caliva and Monogram, among others. The company’s e-commerce offerings are mainly advanced through caliva.com.[1] As of September 30, 2022, TPCO operated approximately 11 retail dispensaries and two independent delivery depots under the Caliva, Coastal, Deli by Caliva, and Calma store brands distributed across California. Michael Auerbach founded the company in June 2019 as Subversive Capital Acquisition Corp. It changed its name to TPCO Holding Corp. in January 2021. Its common shares are listed on the Aequitas NEO Exchange (“NEO”) under the GRAM symbol and on OTCQX under the GRAMF ticker symbol. TPCO’s warrants are also traded on NEO under the GRAM.WT.U trading symbol. The company is based in San Jose, California.[2]
Corporate Business Operations[edit]
TPCO is a consumer-focused cannabis firm with operations targeting the recreational and wellness cannabis markets in the United States. The company’s operational footprint spans cultivation, extraction, manufacturing, distribution, retail, brands, and delivery. Its California operations are centered on the creation of leading brands. Its platform was designed to develop one of the most culturally impactful and socially responsible companies in the States, advancing quality, consistent, cost-effective, and generational brands to be distributed to third-party retail stores and through the firm’s outlet channels. It leverages its delivery and storefront retail outlets to propel it to high gross margins for most of its products.
The firm also adopted the one-on-one relationship strategy between its consumers and brands to help collect consumer data and insights. As of September 30, 2022, TPCO operated a single sales channel omnichannel retail: brick and mortar retail, e-commerce pick up and delivery, and sold various branded wholesale products. It also had 12 omnichannel retail locations and four consumer delivery hubs. The company disposed of its low-margin wholesale business to minimize complexity, focus on high-margin operations, and conserve cash during the third quarter of 2022. TPCO is committed to becoming the best-in-class cannabis operator in the world through the integration of professional leadership, technology and data-driven practices, omnichannel operations, brand and product expertise, equity advocacy, and social justice.[3]
The Parent company employs technological advancements to spread its research beyond retail locations to incorporate company-client interactions. Its e-commerce distribution channel includes a famous mobile application enabling customers to access in-store offerings or schedule curbside pickups from its retail locations across California. The Parent company also harbors over 17 owned and licensed brands that advance over 250 SKUs in more than 20 form factors. It operates Social Equity Ventures, a platform aiding in rectifying the wrongs of cannabis prohibition. The firm contributes at least 2% of its net annual revenue to the venture.[4]
Critical Company and Industry News[edit]
On March 9, 2023, the company confirmed its license agreement extension with Mirayo by Santana, a chain of top cannabis products inspired by Carlos Santana, a ten-time Grammy Award-winning guitarist, and iconic cannabis advocate. Mirayo advances high-quality cannabis products that leverage on superior powers of ancient remedies, allowing consumers to discover their divine light. The top-selling celebrity brand offers cannabis products in critical categories such as pre-rolls and whole flower.[5]
The Parent Company and Gold Flora, an established vertically-integrated cannabis company in California, notified the public on February 22, 2023, that they had closed a definitive business combination agreement (Merger Agreement) to combine the two firms in an all-stock merger. Terms of agreement in the deal specified that TPCO shareholders would own 49%. In comparison, Gold Flora counterparts would pocket 59% of outstanding common equity in the resulting company on a pro forma basis. TPCO is set to benefit from the merger in several ways, including increased magnitude and scaling opportunity, establishing a robust vertically-integrated platform, supply chain optimization, improved financial profile with a strong balance sheet, etcetera.[6]
TPCO released its Third Quarter 2022 financial and operational results for the period ending September 30, on November 14, 2022. Highlights of the company’s performance in the quarter include:
- Recorded an adjusted net loss of $31.3 million, excluding $13.4 million in losses associated with discontinued operations, 127.8 million in non-cash impairments, and $24.5 million in non-tax cash recovery
- Generated $6.6 million in profit from continued operations, or 34% of net sales
- Reported $15.9 million of Adjusted EBITDA loss from continued business operations
- The company successfully closed the Calma acquisition during the quarter.[7]
Governance[edit]
Executive Management[edit]
- Troy Datcher, Chief Executive Officer
- Has been the CEO since September 2021
- Before TPCO, he was the Senior Vice President and Chief Customer Officer of Clorox Co. for 20 years, overseeing global sales operations.
- Before Clorox, Mr. Datcher held the National Sales Account manager position at The Procter & Gamble Company.
- Mike Batesole, Chief Financial Officer
- Has been the company’s CEO since February 2021
- Has more than 25 years of financial and operational expertise
- He previously served as the CFO and CA Operations for Origin House through 2019 and 2021
- Before Origin, Mr. Batesole was the CFO of Shaklee Corporation, where he was charged with accounting, finance, operations, supply chain, and IT roles
- He also held financial roles in established technology companies such as VA Software Corporation, Dorado Network systems, and Bentley Systems in the early stages of his career
- Acquired his Bachelor of Science from the University of California, Haas School of Business. He is also an active CPA.
Other executive team members are Colin Brown, Chief Legal Officer; Esther Song, Chief Marketing Officer; and Roz Lipsey, Executive Vice President of Operations and Wholesale.[8]
- ↑ TPCO Holdings Inc. COMPANY DETAILS – CNBC News. Accessed on March 16, 2023.
- ↑ TPCO HOLDING CORP. FORM 10-Q/Nature of Operations, Page 11 – Seeking Alpha. November 14, 2022.
- ↑ TPCO HOLDING CORP. FORM 10-Q/MDA/Business Overview, Pages 34 &35 – Seeking Alpha. November 14, 2022.
- ↑ About the Parent Company – TPCO website/Homepage. Accessed on March 16, 2023.
- ↑ The Parent Company Extends Partnership with Mirayo by Santana – Yahoo Finance. March 9, 2023.
- ↑ THE PARENT COMPANY AND GOLD FLORA TO COMBINE TO CREATE A LEADING VERTICALLY INTEGRATED OPERATOR IN THE WORLD'S LARGEST CANNABIS MARKET – TPCO News. February 22, 2023.
- ↑ TPCO Holding Corp. Q3: 2022-11-14 Earnings Summary – Seeking Alpha. November 14, 2022.
- ↑ Governance/Executive Management – TPCO website. Read on March 16, 2023.
