With Proposition 17 being passed in the state of Arizona, cannabis will move to an adult-use framework in 2021. Vext Science Inc., (CSE: VEXT, OTCQX: VEXTF) is an established player in the market and is the producer of the well-known Vapen brand, which is already on the shelves of most dispensaries in Arizona. With two operated dispensaries in Phoenix, CEO and COO, Eric Offenberger states, “Our products have always been 100 percent pure. The patients within Arizona’s current medical market look for us. We’ve been very fortunate to have influencers such as OFFSET and DaBaby that have taken our product, like our product, and talk highly of it.” Both OFFSET and DaBaby are famous artists in the US, with millions of social media followers.
Offenberger says, “Arizona is a limited license market, which means it doesn’t allow for quick entry into the market, for new players. Limited license markets offer companies like VEXT the opportunity for above average long-term returns on capital. If the Arizona market behaves like other markets where we have seen recreational or adult use come into play, we anticipate that we will see between three to five times growth in the market over the next 12 to 18 months. We have positioned our operated dispensaries and entire supply chain to prepare for this.” Offenberger confirms that the company has been operating profitably since 2016.
Offenberger acknowledges that Vext is giving careful consideration to joint ventures beyond Arizona. “In the last year, year and a half, we have been looking at expansion, depending on where it made sense for us economically, into other states. Most people are approaching us because of our social media. They have acquired a license but are looking for someone to partner with and help them operate. Not all states are the same. As regulation becomes more state specific, you’ll have to look at the opportunities in the states.”
It is estimated that by 2024 the cannabis market will be worth 30 billion dollars nationwide. Vext already has brand recognition in several states. Currently the Vapen brand of products is available in Kentucky, Nevada, Oklahoma, and California. The company plans to launch in Ohio and Massachusetts in the first quarter of 2021.
To establish a footprint in other limited license states, Vext is favoring what they call a ‘capital light, return focused model’. With the experience the management team has in multi-state operations in other industries, combined with the success of Vext in Arizona, the company is looking forward to continuing to execute on opportunities out of state.
“Vext wants to continue to be a profitable company that operates in the space. We do not want to get too big, too fast. We want to be smart about how we grow. There is not a lot of blue sky that we have been selling. We have been selling results.”
Offenberger says to grow and capitalize on the brand in a hot market and really perform, one must figure out how to operate efficiently within a state boundary.
“Some of the economies become different. So, it is unique that way. And that excites me.” As adult-use ramps up this year in Arizona, Vext is aiming for even better results.