As always, I encourage members in our community and others who are interested in cannabis stocks or the industry to contribute their perspective. The following contribution, which is available to the public, is from 420 Investor member "dxchronicdvt":
VAPE currently trades under ticker symbol PLPE, and will undergo a name change and 40:1 reverse split on Monday 1/6. It will trade for 20 days under PLPED until Feb 03 when the ticker will become VAPE.
VAPE is a new company in the cannabis and e-cig industry that plans on focusing on cannabis concentrates, vaporizers, and e-cigs. VAPE subsidiary HIVE Ceramics is a company operating in a niche and growing market with what appears to be a far more superior product than its competitors.
HIVE ceramics currently has a product ready to launch sometime this month. A medical grade ceramic nail, used for dabbing. Dabbing is an increasingly popular way to ingest cannabis concentrates such as waxes, hashes, and oils. The process of dabbing uses a specialized smoking device called an oil rig.
In the past the oil rigs have used a nail made of quartz or titanium. However, these materials are not chemically inert when heated and leave residue that needs to be cleaned after using the nail. The nail that HIVE ceramics has made supposedly is chemically inert at high temperatures, cleans like new, is more durable, and gives a better taste than its quartz and titanium counterparts.
Judging by the comments on HIVE ceramics instagram page, comments made by CEO Kyle Tracey, and various MJ related forums; the excitement this product is generating in the dabbing community is extreme. Although the company has yet to issue a press release about the product an article in the LA Weekly suggests that “the first 10,000 units will be shipped this January, and most of those have been pre-ordered”.
It appears that dabbing is becoming an increasingly popular way to indulge and is touted by some to be the best way to get high off MJ. Most concentrates are very potent ranging from 50-90% THC concentration as opposed to top line buds being around 30% THC. The concentrate vaporizes upon contact with the nail and the smoker inhales the vapor. This is thought to reduce carcinogens produced by combustion of plant material.
Through AB’s in-depth research and analysis, and our own observations, we have learned that a majority of the companies involved in the industry are run by management that seems to be dedicated to making themselves rich rather than building a profitable company. Growlife CEO Sterling Scott has acted with integrity and transparency; taking time to make numerous appearances in live interviews answering questions candidly, the good and bad, for all to hear. In the past few months investors have taken notice and PPS has increased over 600%. Kyle Tracey, former president and co-founder of Growlife, and newly appointed CEO of VAPE, stated this in their most recent press release.
"I am tremendously excited about the opportunity to steward Vape Holdings for the foreseeable future" said Tracey. "My tenure at GrowLife has given me a wide breadth of understanding that will be extremely useful in launching Vape. Having learned and worked at the arm of GrowLife's current CEO, Sterling Scott, gives me an excellent blueprint on the right way to do things in this industry."
According to the same LA Weekly article mentioned earlier, “Tracey and Cook stated that the price of the ceramic nail will be around $5-10 dollars more than its quartz and titanium alternatives”. A little research on titanium and quartz nails shows this will most likely be $90-120.
If the price is $!00, and the profit is $50 apiece, and if they sell the 10,000 units a month that they seemingly will do in January for the rest of the year; then they will have earnings of 6 million EOY 2014 with this product alone. Based on current PPS of .20 this puts the forward P/E at 9. Very low for the rapidly growing cannabis and e-cig industries that VAPE will operate in. As the PPS stands today the company has a market cap of 58 million.
On Monday, 1/6/14, VAPE will undergo a 40-1 reverse split making the PPS $8.00. I don’t know the company’s logic on this, but possibly it’s to give institutional investors the chance to get involved and/or give VAPE the opportunity to secure better financing deals for acquisitions. One of which appears to be a MJ extraction facility located in Denver.
The following is found on vapeholdings.com:
1) Vape Holdings is currently negotiating with a Colorado state-licensed enterprise to acquire a state-of-the-art cannabis extraction facility, or its production via commercial offtake. As they are available, details will be announced by company press release.
2) Vape Holdings intends to pioneer standards of manufacturing stable, pure, and highly effective concentrates for a variety of purposes within states where marijuana / cannabis are legal.
3) Vape Holdings expects to increase scale after achieving the proposed acquisition of an initial cannabis extraction facility, and replicate this business in other locales or states where cannabis extraction is both legal and commercially viable.
Legal recreational sales happened in Colorado for the first time January 1 of this year. By all accounts everything went well. While MJ is still illegal federally the Department of Justice has outlined 8 rules that if followed “should” keep individuals and companies out of the court room. http://www.justice.gov/opa/pr/2013/August/13-opa-974.html. There are still the problems of taxes and banking. There are bills in “motion” to fix these problems. Not sure if the company plans on waiting for further legal changes to get involved with this aspect of their business plan or if they are going ahead with it full steam.
I believe the company is undervalued based on the ceramic nail alone. If they do get involved with the concentrates directly as is their plan and as is it appears they are positioned to do, they will make buku bucks and should eventually have a market cap in the billions rather than millions.
While most of the information here is subjective: hypothetical sales figures on a new product, quality management, future plans, etc. I believe the probability the company becomes extremely profitable outweighs the probability that it goes nowhere by a wide margin, and have invested/bet accordingly.
Thanks, dxchronicdvt for sharing your perspective!