Las Vegas may be known as 'Sin City' but newly formed company Friday Night Inc (CNSX:TGIF) is looking to exploit those vices into something beautiful.
It is aiming to tap into the huge commercial opportunity that is the city's 'Strip' which attracts 48 million visitors a year, as Nevada's recreational cannabis permit is about to come into force (July 1).
For the initiated, the strip is around a 7km stretch of boulevard laden with hotels, clubs and casinos.
Nevada highly anticipated..
"Nevada is one of the most anticipated markets to date," says Friday Night's chief executive, the investor and entrepreneur, who has been involved in the evolving cannabis space for ten years - Brayden Sutton.
"Many locals feel like it's already legal down there," he tells Proactive.
The group is already very familiar with the Canadian market, which is highly regulated and does not have a recreational component, and the firm sees its move as a break into the US market, and further afield.
Friday Night already has a competitive advantage as it has bought a 91% stake in Alternate Medicine Association (AMA), a licensed medical marijuana producer - the second to get such a licence in Nevada, the very first in Las Vegas. This is key because only licensed medical producers will be able to apply for recreational licenses.
AMA already has sales of around US$ 200,000 per month and holds both cultivation and production licenses, so Friday Night will hit the ground running.
AMA's current product suite includes various high-quality flower, pre-rolled joints and many other items including their very popular concentrate brands.
Its second Nevada asset - also having acquired a 91% stake - is Infused Mfg - a company that provides hemp-derived and cannabidiol (or CBD) products, which are already completely legal and therefore 50-State friendly. It has achieved growing sales to date, and Sutton, said theoretically, products like theirs could find their way into major US retail chains that already carry similar products.
They have also just moved into a 5,000 square foot state-of-the art processing facility to meet the increasing demand.
"We've got tremendous upside on both these assets," said Sutton, adding that these deals were just two of around 30+ the firm was evaluating. "Best-of-breed only", says Sutton.
Valuation potential driving excitement...
The valuation potential, he says, is what's key to driving excitement around the stock.
Canada is potentially a couple (or more) years away from a full-on recreational market, yet the companies there are already priced for that post-legalization environment, reckons Sutton.
Whereas somewhere like Nevada is already going legal in mere days and the assets here are trading at incredibly reasonable valuations.
This presents a far more attractive opportunity for an investor, one perhaps who missed the run in Canada from 2013 through 2016, he suggests.
The firm has raised just US$6.6mm, has no debt so is in a great position to scale up the business.
Sutton is no stranger to the cannabis sector and previously served as the executive vice president for Supreme Pharmaceuticals Inc (FIRE.V) during its inception and roll-out.
Capital markets veteran Brian Keane is also on the board.
He has more than 18 years' of capital markets, investing and consulting experience in over 100 emerging growth companies in the US, Canada, Caribbean and Asia, transacting over $2bn worth of deals.
His CV included Rodman & Renshaw, LLC, Ladenburg Thalmann & Co, TechVest, and Qualified Capital where he focused on life science, biotech, mining and emerging growth companies.