How the Rich Get Richer
It’s no secret that the cannabis industry has been going through some severe growing pains this year. The major cannabis stocks are all down double digits in 2019. And there’s talk of even more losses as wholesale prices keep falling in the face of oversupply in Canada.
It’s becoming more and more clear that the massive rallies in public cannabis companies are coming to an end. But that doesn’t mean there isn’t still a ton of profit to be made as this industry continues to grow here in the U.S.
Sure, there will be some big rallies as new states come online. And there will definitely be a boom in the stock market when the federal government legalizes the plant. But the majority of the billions still to come are going to go to investors who get in before the companies hit the stock market.
I often talk about my network and how it’s brought me some really great opportunities to invest in private companies at the ground floor. But I’ve yet to really show you any of those investments.
So today, I’m going to skip a step and offer you the chance to invest in one of them right along with me.
And what’s really great is that no matter how much money you make or what your net worth is, you can still get in on it. You don’t have to be a multimillionaire. But you can invest right alongside them.
Let’s Back Up a Year
In late 2018, one of my friends gave me a call to tell me about a small company in California that was getting ready to go public but doing one more round of private funding before that.
He wanted to know if I was interested in helping fund the company’s expansion plans in exchange for partial ownership — a textbook private investment. So I took a look at the company and talked to some of the founders and executives. And I liked what I saw.
But at the time, I was what you might call “cash poor.” Most of my money was tied up in other ventures, and I just didn’t have enough liquid cash to make the minimum outside investment.
But I liked what the company had to say and the business plan the founders had laid out for me. So I got in touch with some of my other friends who might have that kind of liquidity. And I helped them connect with the founders so they could take part in the funding round.
Now, usually in this business, you don’t get a second chance to invest. And even if you do, it’s never at a price even close to earlier rounds. But last week, I got just that opportunity. And I want to share it with you.
Second Chance to Be a First Mover
I’ve kept in touch over the past 12 months and followed the company’s progress closely. A few days ago, one of the folks who first introduced me to the opportunity reached out with another.
The company is ready to take its shares to the public, but it doesn’t want to do it in a way that only makes institutional investors rich. This is a company with a people-centric approach. And the founders want to go public in the same way.
So they’re offering the chance to buy pre-IPO shares to retail investors. And they’re offering the shares very close to the price the last private round went for. That means this company is giving everyday investors the opportunity to get in at almost the same price as the smart money from hedge funds and accredited investors.
For me, it’s like getting a second chance on that first round. And the best thing is that the minimum investment is only $2,000. So just about everyone who wants to invest will be able to do so.
Everything from Research to Retail
Before I tell you any more about the details of this incredible deal, let me tell you about the company itself. Because I’m just guessing that you’re probably interested in knowing what you’re investing in.
Juva Life is a fully integrated California cannabis company. What that means is that from seed to sale, it owns every step of the process that gets legal cannabis into the hands of consumers.
The company consists of six segments: Juva Cultivation, Juva Research, Juva Manufacturing, Juva Distribution, Juva Retail, and Juva Delivery.
I’ll give you links to a more detailed description at the end, but for now, I’ll just briefly tell you about each segment.
Juva Cultivation will grow high-quality cannabis for distribution to recreational and medical users in California. This includes the award-winning Frosted Flowers brand.
Juva Research will develop what the company calls “precision cannabis” that will allow doctors to get the right medicine to the right patient at the right time.
Juva Manufacturing will be capable of processing dried cannabis flower into all manner of products from e-liquids to edibles.
Juva Distribution will have the ability to distribute wholesale Juva Life products to dispensaries across the entire San Francisco Bay area.
Juva Retail will maintain a storefront presence in the Bay Area to serve as many as 200,000 customers at its flagship dispensary.
Juva Delivery will offer cannabis delivery services to over 1.5 million residents in and around the Bay Area.
So when I say the company will own the process from seed to sale, I mean every single step.
A New Approach to Vertical Integration
Now, this term — vertical integration — is the new hot topic in the cannabis industry. But it’s really nothing new. Companies have been doing it for centuries. And there’s a good reason for that.
It allows a company to control the quality of its product from raw materials all the way to retail sale. And it’s pretty much the only way you can be absolutely certain that every product meets your own rigorous standards.
So cannabis companies are completely on board. But Juva Life is taking that one major step farther.
Where other operators see vertical integration as an end-to-end process, Juva views it as a constant loop. Where other companies stop following the product once it’s sold in a retail store, Juva is tracking the customers who buy the products after they leave the store. But not in some creepy way.
Through patient monitoring and tracking, Juva plans to make constant adjustments to the compounds in its formulations to keep prescription-grade products at the leading edge of effectiveness.
By focusing on patient-reported outcomes and using real-world research to drive better product formulations, Juva will set itself apart from the competition by creating “research grade formulations of precision cannabis products based on real world evidence.”
Juva Founder, CEO, and Chairman Doug Chloupek takes it a step further. “We’re looking beyond adult use,” he says. “By offering an alternative to single compound pharmaceutical products, we target specific ailments to really make a difference in how people feel.”
That’s where Juva really sees the greatest opportunity in the marketplace. Its research shows that identifying five target ailments and treating just 1% of the newly diagnosed in a year would create a $300 million annual market in California alone. And as Chloupek points out, “The demand is there, and nobody else has the kind of expertise [Juva has] put together to make it work.”
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As of now, the company is still pre-revenue. That means it’s not selling anything yet. But that’s going to change very quickly.
Juva already has all the permits it needs to start growing, processing, distributing, delivering, and selling cannabis all over the Bay Area. And after this funding round, it’ll be able to complete the final touches and get all of its operations rolling.
I’m talking about five facilities totaling 48,500 square feet already under lease with licenses to grow and sell cannabis at all five. Once fully operational, each of those five facilities will be able to generate $15 million a year in revenue on average — that’s $75 million split among them.
Several of them are already operational for direct-to-consumer delivery and distribution. And the first harvest at its biggest facility in Stockton, California will be ready by March 2020.
The company is expecting to add another $60 million in annual revenue from new products under development at Juva Research. All told, the company is projecting potential revenues over $130 million per year once all of its operations are up to speed.
So, while it may not be making money now, it’s got the potential to be raking in hundreds of millions within a year or two. And it’s thanks to that pre-revenue status that we’re getting such a great deal.
What’s the Deal with Juva?
Don’t worry, that heading isn’t the setup for some terrible Seinfeld joke rip-off. Although it sure does sound like one. Now that you know a little about the company, I’m going to tell you all about the opportunity to invest.
Like I mentioned earlier, Juva is a people-focused company. It’s not just trying to sell as much cannabis and make as much money as it can. It wants to build a reputation as the top cannabis company in California, the world’s fifth largest economy.
It also wants to own every step of the process of getting its products to consumers. And that’s how it’s planning on making its stock market debut as well.
Management has decided to skip the institutions and super-wealthy individuals this time. They’ve already got a lot of money. And Juva wants to help people, not funds. So it’s taking its pre-IPO shares direct to the public.
The company is offering a total of 57 million shares to retail investors who are interested in scooping them up before they’re available on the market.
Each share costs $0.50 and comes with a half of a warrant (like an option) to buy additional shares for $0.75. There’s a $2,000 minimum investment. So that means you need to pick up at least 4,000 shares (and those will come with 2,000 warrants).
But I think you’re going to want to pick up far more than the minimum. The company just recently opened the round. And it’s already filled more than half of it. That’s a little over $15 million already.
It’s got commitments from early investors to fill up the rest. But the management team wants to make sure everyone else has the opportunity before they start taking care of friends.
Your Next Steps
You can get more information about the company by checking out its investors page here: Juva Life Investor Information. There’s a lot more information on the executives, the board of directors, and the medical advisory board working with Juva. I highly recommend you check it out.
And once you’ve made up your mind to get in on the action, you can head straight to the offering by clicking here.
Like I said, it’s been very popular already. So you’re going to have to register first. But once you do that, you’ll be all set to take your first step into the lucrative world of pre-IPO investing.
To your wealth,
After graduating Cum Laude in finance and economics, Jason analyzed complex projects and budgets for the U.S. Army. Then, at Morgan Stanley, he led the assistants' team for the North American repo sales desk, responsible for hundreds of multibillion-dollar trades every day. Jason is the assistant editor for The Wealth Advisory income stock newsletter. He also contributes regularly to Wealth Daily. To learn more about Jason, click here.
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