Introduction
Cirona Labs was founded in 2018 by Hunter Friedland, while a senior at Cornell University. While at Cornell, Hunter participated in the National Science Foundation Market Discovery and Opportunities where he researched and interviewed over 30 Hemp Farmers and Processors on the Supply Chain issues within the new industry. Through this research, he concluded that there was a gap between Cultivator Harvest and the lack of available storage and drying facilities in order to keep product fresh.
During 2018, Hunter entered into brokering Hemp biomass and processing into Distillates and Isolates in the Oregon and Colorado Markets. In December 2018, Congress passed the 2018 Farm Bill which included legalizing all hemp crops for cultivation, manufacturing and distribution. Being aware of this immediate opportunity, Hunter applied on December 26, 2018, with the NY Department of Agriculture to get one of the first Hemp Processing Licenses in the State of NY.
In April 2018, Hemp Hunter Labs received a NYS license to process and manufacture Hemp derived ingredients in New York State, with the ability to sell Nationwide. After receiving the license, Hunter developed a business plan to build and operate a Hemp Processing Facility in the State of New York. From 2019 to early 2020, Hunter build an advisory board including the leading hemp horticulture researcher, Dr. Lawrence Smart, Department Head of Cornell University's Horticulture Section of the School of Integrative Plant Science within the College of Agriculture and Life Sciences. In 2019, Hunter met his future co-founders, with deep experience in Science, Cannabis R&D and Food and Nutritional CPG manufacturing and an experience Chief Innovative Officer in the field of manufacturing, distribution and brand development of confections.
Hunter and Co-founders decided to focus on creating a business using Nano Emulsion Technology to make oil extracts into water soluble ingredients. During 2020 through 2021, Hemp Hunter Labs filed a patent family with the USPTO covering formulations and processes to create novel approaches to converting oils to water. The Company sold the water-soluble ingredients to some the leading CBD brands in the US. While the market was ripe for distribution, the national CPG brands could not enter into agreements due to the current FDA stance that CBD is not approved for human or animal consumption.
In 2021, NYS passed legislation to legalize cannabis and to adopt regulations to create an integrated market for the cultivation, processing, distribution, and sale of Cannabis products. The New York Cannabis Board decided to offer the first cultivation and processing licenses to the existing Hemp cultivator and processors providing them an early market advantage. The founding team decided to pivot its focus on this immense opportunity. The Company filed for the conditional cannabis processing, manufacturing and distribution license, which was formally approved, and the Company received license number 2 on August 15, 2022. Through 2022, the Company raised a total $5 million in equity and entered into a long-term lease for a 50k square foot manufacturing facility with the goal of becoming the premiere co-manufacturing facility in New York providing out of state brands the ability to rapidly expand into what will be the second largest Cannabis market in the US.
The Company is in the process of building out the facility to include production lines for extraction, pre-rolls, vape pens and edibles with a projected launch by the end of February 2023. The Company projects top line revenue in 2023 of $12 to $15 million
Opportunity
First Mover Advantage to the $4 Billion NY Recreational Cannabis Market
Revenue/Range
$600,000
EBITA (Range)
N/A
Company General Business Specialty/Industry (Description: What does the company do)
Specialty
Our Specialty is our experienced diverse team covering all aspects of business. We have a competitive edge in the field of water-soluble nano-emulsions. This advantage provides our customers with faster acting products, such as feeling the effects of a gummy in 7 minutes versus 90 minutes.
Our water-soluble mixtures provides a higher absorption rate of the active ingredients over oil- based CPGs. Water Soluble mixtures also provide homogeneity in the manufacturing processes in beverages, edibles and tinctures. This is important because the industry is plagued by inaccurate dosing between individual product servings and will eventually be mandated to that all manufacturers use water soluble ingredients to assure accurate dosing and labeling. Last, using water soluble emulsions helps to eliminate the bitter taste that comes with oils and due to its completely homogenized solutions, provides superior clarity in products such as beverages.
General Business Model and Market
Our business model entails three categories.
First, we produce our own extracts, distillates and emulsions which can be sold to brands and other NY processors that do not extract. We can also provide solutions for Farmers that would like to create their own brands to differentiate from only having bulk cannabis flower for sale.
Second, we have the team and the experience to manufacture almost any product and format that is driven by rapidly changing consumer tastes.
Third, the company plans to develop, distribute and market its own brand. Developing brands produces the highest market value segment of the business and can be licensed through partnerships in other states with licensed processors and distributors from that state.
NYS is projected to be the second largest Cannabis market in the US with projected retail sales of $4 billion by 2025.
Revenue Range Stratification (Product Lines/Service)
Projected Wholesale Revenue Ranges for year 1
Bulk Sales – $1.5 million
Pre-Rolls – $2.5 million
Vapes – $4 million
Edibles – $6 million
Non-THC product sales – $1 million
Geographic Location(s) and Big Business Line Categories
Our Facilities are in Rochester NY.
We will work with local distributors in each of the major metros in NYS to get our products to retailers.
Additional Summary Success/Growth/History “Details” Bullets i.e. Growth, track record, Growth Potential
Projected sales by 2027 – $100 million
Transition Plan
N/A
Reason for Selling or Seeking Capital
We are seeking capital to fund our plan to cash flow positive by year end 2024.
Equipment for our extraction processes,
Hiring labor for production
Hiring sales and marketing people
Remaining executive team – Controller, Head of Compliance, Quality Control and Assurance
Cost of inventory and accounts receivables
Final Standard Comments
This is a unique opportunity for the right investor. The Company is in the enviable position of building market share rapidly over the next two years. We have one of the largest cannabis manufacturing facilities which will allow us to serve a multiple number of co-packing clients. At the same time, we have experienced brand, product and innovation that will give us the opportunity to build successful brands. Additionally, the company is positioning for rapid growth beginning in 2023. The Company's combined executive experience with over 100 years of senior manufacturing, product development, scientists, marketing and sales.