CALABASAS, Calif., Aug. 22, 2022 (GLOBE NEWSWIRE) -- Resonate Blends, Inc. (OTCQB:KOAN), a Wellness Lifestyle cannabis holding company (“Resonate” or “the Company”), today provided a corporate update covering its recently filed Q2 2022 financial report and the advancement of overall operations. A letter to shareholders from Resonate’s Chairman and CEO, Geoff Selzer, follows:
Dear Shareholders,
As you all know by now, the Cannabis sector, especially here in California, has been a challenging market for the past year. We have made significant strides in many areas of the company, and we expect to be able to announce additional progress in short order. Our focus continues to be on accelerating revenues and acquiring revenue-producing companies that are strategically aligned with our core value proposition that value-added brands are the future of Cannabis.
Our first challenge is to increase revenues in our core brand KOAN. To that end, we have previously announced the rollout of our multi-serve packages that reduce the cost per serving of our product by approximately 65%. I’m pleased to announce that those products are in the final stages of compliance testing and will be delivered to our distributor, Nabis, within a week. Beyond that, we expect our Sleep Cordial will also be delivered to Nabis within 2 weeks. The Sleep product will be available as a single and in a multi-serve package.
We have discussed our intention to accelerate our acquisition efforts. The cannabis market is presenting some unique opportunities for potential strategic roll-ups. On August 12, we issued an 8-K that detailed our Investment Deck which was focused on acquiring a well-established and respected California cannabis firm that will not only add significant revenues but also help us increase margins, generate multiple income streams and support our focus on product innovation. The Definitive Agreements for this potential acquisition are being produced as of this update, and we expect to make an announcement soon on this transaction.
When we look at the overall market, we are seeing the greatest innovation occurring in smaller brands across California and the country. Given the current state of the cannabis market, we are also seeing multiple opportunities to acquire some of these companies. Consistent with our strategy directed towards premier cannabis brands, we have managed Resonate with a capital structure that is conducive for acquisitions. We believe that our focus on small highly innovative quality brands, science and rigid product SOP’s - as well as our corporate strategy and ethos, are the reasons we are seeing increased interest in joining forces and rolling into Resonate. As we continue to work on KOAN, we think the challenges in the cannabis market provide us with a unique opportunity to expand rapidly consistent with our overall strategy.
As I mentioned earlier, the California cannabis market has faced several hurdles in 2022 – including weaker consumer demand, continued taxation issues, regulatory uncertainty and lack of banking reform, to name a few. Our statewide distributor unexpectedly ceased operations in early Q2 that caused serious disruptions to our sales channel for five weeks. However, this presented a great opportunity as we were able to join the Nabis distribution network, the largest and most established statewide distributor in California. Nabis has a Marketplace platform that is popular with retailers across the state, and we are already seeing the benefits of this important relationship take hold.
Once our products were available for purchase through Nabis, we aggressively marketed our Cordials through product discounting which helped both to build brand familiarity and moved older inventory through the channel. In “sneak preview” conversations, both current and prospective retail buyers are responding enthusiastically to our new multi-serve bottles, 4-packs and single packaging options. Retailers are now pleased to see the lower cost per serving options available as well as our new Sleep Cordial coming to market. Retailers have expressed the need to reduce the cost per serving from the original Cordial 3-pack option – and we responded accordingly.
As we expand our dispensary footprint, we are experiencing success at the new cannabis lounges that are beginning to open across California, and we expect to make some new lounge announcements in both southern and northern California in the coming weeks. Our Cordials are uniquely suited to the lounge environments. The single-serve Cordial bottles and the variety of experience options are a perfect fit for guests at the consumption lounges. Patrons are able to choose the drink of their choice with the experience of their choice. We believe no other company offers that. We previously announced that the Artist Tree Lounge in West Hollywood highlighted KOAN all summer and we are happy to announce that they have just agreed to take our new form factors into all 5 of their dispensaries.
We believe the careful nurturing of our brand is one of our most important responsibilities as managers of Resonate Blends. Since nobody knows our product better than we do, we made the decision to bring the sales process in-house versus having an external salesforce. We expect to hire additional sales resources across the state to maximize the success of the cannabis lounges, new dispensary locations and Nabis’ statewide distribution strength.
With an established statewide infrastructure in California for manufacturing, distribution and sales, we are well-equipped to make progress with our go-forward focus on revenue generation. We are uniquely positioned to be a positive disruptive force in the wellness/lifestyle segment of the industry built on a growing body of proprietary IP, and we firmly believe that value-added brands are the future of the Cannabis industry.
We look forward to providing further updates and insight into our operational progress in the near term.
Stay safe, stay healthy.
Sincerely,
Geoff Selzer
Chairman & Chief Executive Officer
About Resonate Blends, Inc. (OTCQB:KOAN)
Resonate Blends is a Calabasas, CA-based portfolio of Cannabis Wellness and Lifestyle brands. The company created the Resonate System—a comprehensive system of interconnected experience targets to personalize consumers’ relationship with Cannabis through its products. Koan Cordials, the world’s first Cannabis Cordial and Resonate’s flagship product line, was awarded the prestigious Gold Leaf Award in 2021 for “Best New Brand” and also honored with a Clio Cannabis award. To learn more, please visit www.resonateblends.com
Safe Harbor Provision:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. The words “believe,” “will,” “may,” “may have,” “would,” “estimate,” “continues,” “anticipates,” “intends,” “plans,” “expects,” “budget,” “scheduled,” “forecasts” and similar words are intended to identify estimates and forward-looking statements. Actual results and developments may be substantially different from the expectations described in the forward-looking statements for a number of reasons, many of which are not under our control, among them, the activities of our competition, the future global economic situation, weather conditions, market prices and conditions, exchange rates, and operational and financial risks. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set out in the Company's SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.
Corporate Contact
David Thielen
Chief Investment Officer/Director
Resonate Blends, Inc.
david@resonateblends.com
571-888-0009
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/6f2b51d9-407b-4b68-8263-3beca35ae756
