VPR Brands LP (OTC: VPRB) is a nano-cap public company best known for its HoneyStick brand of vaporizers, Goldline CBD line and its white label services.
Although thinly traded, this stock has been around for a decade — a long time in the cannabis business.
Even before entering the cannabis sector, VPR Brands was focused on creating vape-related products. Over the last five years, the company has focused solely on cannabis- and CBD-specific vape products.
"We have seen both the cannabis sector and vape industries mature and evolve and, along the way, aligned with several key extractors, cultivators and dispensaries on the cannabis side and the core distributors and power players on the vape side," VPR Brands CEO and Creative Director Kevin Frija told Benzinga in a recent conversation.
"Our company focuses on innovation, quality, performance and durability to empower cannabis and CBD users and provide the best possible experiences with our products.”
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'Intimate Experience' In Vaping
For Frija, VPR’s main differentiator is its management team. The company’s executives, as well as several key employees, have been in the vaporization industry for a decade.
“With this intimate experience in the industry our company is able to better spot trends, minimize its time to market and quickly evolve," he said.
As a company specializing in cannabis vaporizers through the HoneyStick brand and white labeling for extractors, VPR has grown not only in the vape sector but in cannabis, the CEO said.
Frija emphasized the importance of experience and good will in the cannabis space.
The CEO said he values innovation, styling, product development, branding, licensing, advertising, sourcing and logistics: concepts he learned from almost two decades in the fashion industry.
“All those things need to be coordinated seasonally to make the business flow year in and year out, over and over again — it never ends," Frija said.
Benzinga: How would federal legalization change your business?
Frija: Legalization would create real sustainable growth for our company [with it] being a close ancillary product to cannabis.
What now is only partial legalization in about half the states would increase the market as a whole, make our products more readily acceptable and grow nationwide demand as well as expand the [number of] dispensaries to showcase our products and introduce cannabis to a larger audience.
On the CBD side, we are already experiencing this with the farm bill, and it would be exponential on the cannabis side.
Benzinga: What are the main challenges that your company and the industry in which it operates are facing?
Frija: Bankers don't want to take our money.
In addition, I would say everyone is trying to get on the train of CBD and cannabis ancillary products. A surge of new entrants and competition in general forces the price down, as that is the only way new brands really gain any market share.
This drives prices down for the whole market and really takes away from the innovation and advocacy the mainstay brands can provide.
Benzinga: Do you have plans for expansion in other U.S. states and/or internationally?
Frija: The USA is a big market, and we are constantly trying to educate and promote positive awareness domestically.
We recently launched an international sales program and have a presence at all major cannabis conventions, forums and events throughout Europe and South America.
We want to keep up with cannabis worldwide; it's a race in which we're running a marathon for sure.
Benzinga: What is your take on cannabis industry consolidation?
Frija: Bigger is better is the story of our lives. It’s a natural part of the economies of scale. The large companies want to get larger, and that always leaves room for the small boutique or craft-style operations as well. We have lost some of our largest customers through consolidation and also gained some even larger ones.
Benzinga: Do you have any M&A plans that you could elaborate on?
Frija: Yes and no.
We are always speaking to other companies who may want to merge into a public company and who could leverage our brand and merge it with their distribution or other businesses where synergies make sense and will add value for our shareholders.
As we are on the smaller side, we would likely be the ones being acquired rather than doing the acquiring, but you never know.
Benzinga: What are the main synergies between the vaping and cannabis industries?
Frija: It's like orange juice and oranges.
For cannabis, [vaping] is one of the best forms of delivery in terms of discreetness, odor minimization and dosing — we believe it's one of the best ancillary products and will grow in accordance to the cannabis market both medically and recreationally.
As more research is done on concentrates and the more awareness that occurs on vaping, the joint better watch out.
Benzinga: How easy is it to adapt the technology from traditional vaping products to cannabis?
Frija: Its easy; but it’s not that simple.
It is a process to get it right: different temperatures, viscosities and heating methods really play a role.
As one tries to optimize the inverse relationship between intensity and flavor — and make sure you don't allow for any leaking of such an expensive fill — it's a balancing act. Along with making devices patient-friendly in their design. It's not simple, but we enjoy it.
Benzinga: What do you think about the involvement of big tobacco in the cannabis space?
Frija: Save the dinosaurs before they become extinct!
It's the next step for them, and the amount of money they have is definitely not good for the little guys, but they move slow and don't innovate. Cannabis is an evolving industry, and there will always be room for the innovator.
Benzinga: What's your response to concerns that vaping is becoming overly popular among teenagers and is often used by them as a way to consume cannabis?
Frija: I remember when you drive by a high school and many kids would stand in a group outside use to hang out a smoke cigarettes. Now they vape. It’s our job as an industry to limit it by using advanced age verification, our marketing and enforcement. We always advocate age enforcement. Ultimately, as long as tobacco is available, vaping will always be the better alternative.
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