Here are some summary notes from a recent conference call for the Mary Jane Group based in Denver. I just took notes as the CEO Joel Schneider spoke, so all of the following came directly from him. I decided to put them here to save you from having to listen if you want the info or are into this cannabis bed and breakfast idea.
The audio was extremely annoying. There is a constant stream of tones indicating people joining and leaving the call, I think. He is obviously a little flustered by all the noise. I would think they could have muted those sounds. Oh well. Here is a link to the call, if you don't believe me, it was pretty rough.
Mary Jane Group is developing an interesting business focused on cannabis friendly B&B's in Colorado, but it has had it's struggles. Here is a link to see the properties. I'd really like to check one out soon.
From what I gathered, this recording took place in July 2015. The stock is now at zero, and was basically at zero then. Filings through Yahoo! and EDGAR are here. I may try to call Joel instead of reading these filings to find out what is up with his firm. Strangely enough, I just accepted a connection request from him on LinkedIn a few days ago.
From what I gathered, this recording took place in July 2015. The stock is now at zero, and was basically at zero then. Filings through Yahoo! and EDGAR are here. I may try to call Joel instead of reading these filings to find out what is up with his firm. Strangely enough, I just accepted a connection request from him on LinkedIn a few days ago.
Conference call on weed!
- Joel Schneider, CEO of Mary Jane Group speaking
- He was a securities attorney for over 30 years, mostly represented small cap, not an innkeeper
- Lots of annoying tones they can't seem to mute
- Joel acquired the shell corp. (with a name I couldn't understand, Pateo or Badeo Corporation?), which is now Mary Jane Group
- Sole reason for purchase was to come to Colorado to get involved with and acquire cannabis businesses
- Joel met a man running Mary Jane Entertainment, which was a suite of companies with a bunch of different projects such as cannabis related online radio, newspaper, tours, events/lounges, glass blowing – none really operational, tried to salvage them, but ultimately they were failures
- Saw a need for cannabis lodging while living in a hotel
- Cannabis lodging did not exist before April 10th, 2014, the date when they signed a lease and took over The Adagio, the flagship property of Mary Jane Group (claim disputed by me)
- It is “a tremendous success”
- Dissolved failing businesses, which took until late 2014, while starting to operate B&B
- Had to raise half a million dollars in debt “to run businesses that were basically running the company into the ground”, so “because of this debt the stock has gone down tremendously”
- Continued to grow B&B business by acquisition – took over Mountain Vista B&B in Silverthorne, then took over Hotel San Ayre. (In the springs) This doubled rooms to 22
- No other way to get into business other than issuing convertible debt, “had a lot of convertible debt out there”
- Discussion of shell company filings and raising convertible debt eligible to be sold into the market, which eventually caused a run on the stock
- When first conversions vested and happened in April 2015, they all started happening
- Provisions for a certain convertible debt holder that wasn't a friend allowed a decreasing conversion price as the stock fell, and started forcing price of the stock down – impetus for run on the stock
- Strong bookings on all three B&B properties operating and profitably operating
- Unable to raise all money for Adagio, landlord extended lease, but did cost company $75,000 in a non-refundable deposit
- Believes in cannabis as growth industry, looking to grow at least one property per quarter – looking at Washington, Oregon, Alaska, California, Hawaii, etc.
- Looking to expand through management agreements for hotel chain “Bud & Breakfast”
- Getting calls from other “tired” B&B owners around the country to become part of the “Bud & Breakfast” chain – to boost occupancy, rates, efficiency, etc.
- Agreements would allow taking on additional properties without huge renovation capex, such as with San Ayre and Mountain Vista
- Believes good properties are available around the country
- CannaCamp - “was real and was something we had invested in”
- Approached by others in March 2015 about starting ranch or camp, went to look at CannaCamp host ranch location and wanted to go forward
- Put out press release which gave people cold feet, dealt with that
- Property was under contract for sale, had obtained draft of lease prior to closing, showed that they were allowed to operate CannaCamp for four months from July 1st through the end of October.
- Unfortunately, press release was picked up nationally and internationally – Jimmy Kimmel, Conan, Jimmy Fallon
- Purchaser of property got cold feet and refused to sign the lease
- Went looking for other properties in Durango, put up $75,000 to take over a 2nd ranch, partners backed out and “took us to a 3rd ranch”
- At that point MJ Group was forced to withdraw support for CannaCamp for 2015, could not be embarrassed anymore and pulled out after investing $20,000 in opening of original ranch, advertising, “cultivated spirits”, etc.
- Despite having some bookings, property partners “dropped the ball”
- Next effort will probably be called “Bud & Breakfast Mountain Resort and Retreat" - examining properties - shooting for 4/20/16, but takes things time to ramp up
- Starting with an industry that did not exist, $609,000 in revenue in first year of business, primarily from Adagio in Denver
- All convertible debt converted to equity, gone through the bad times
- Still have non-convertible debt of $350,000
- Dedicated management “crew” including management, chefs, hosptiality, etc.
- Generating revenue 7 days a week and working 7 days a week
- Generating retail and spa revenue at properties
- Operationally running sound and will need to raise additional funds for specific projects within aggressive growth plan
- We are in that window where our stock needs to remain above $.01 per share for 10 consecutive days, otherwise gets taken down to pink sheets
- This leaves management in a quandary, does not want to do a reverse split, but a small one could be necessary
- Market is not appreciating the businesses – next year of revenue will exceed current market cap, doesn't know of other businesses like that
- Being the sole director and officer is not “correct”, looking to expand management, this will change
- Trying to expand business, he has talked to many cities and has learned a lot about which are accepting and which aren't
- CannaCamp was a “failure” that cost the company money
- Being unable to close on the Adagio was a “failure”, but “we still run that business and it gets rave reviews”
- Just scratching the surface in terms of using it as an event space, and many other revenue growth opportunities
- A very enthusiastic rah-rah growth speech (which I admit was fun to listen to (beside the beeping) because I too am enthusiastic about the industry)
- Question from investor: Do you drug test your employees? No, but they do not allow use during shifts. Encourage off shift mingling with guests, which part of not just being a hotel, but also entertainment
- Encourages guests to consume in common areas like the porches, living rooms, etc. No smoking in rooms, cannabis is highly social already
- An apology for CannaCamp failure
- Pushes his firms PR sophistication (odd, since PR blew up in his face after over hyping and under delivering, they aren't alone in the cannabis world)
- Discusses possible reality show and other unique cannabis hospitality/lodging/media/licensing opportunities
Wow! Good stuff. I like that business model of just an awesome, unique B&B with great food nestled in a developed wine region in an adult use state. What a country!
Disclosure: I don't own stock in Mary Jane Group. You can see my portfolio as of the middle last month here. I'm not a very active trader.
- Generating retail and spa revenue at properties
- Operationally running sound and will need to raise additional funds for specific projects within aggressive growth plan
- We are in that window where our stock needs to remain above $.01 per share for 10 consecutive days, otherwise gets taken down to pink sheets
- This leaves management in a quandary, does not want to do a reverse split, but a small one could be necessary
- Market is not appreciating the businesses – next year of revenue will exceed current market cap, doesn't know of other businesses like that
- Being the sole director and officer is not “correct”, looking to expand management, this will change
- Trying to expand business, he has talked to many cities and has learned a lot about which are accepting and which aren't
- CannaCamp was a “failure” that cost the company money
- Being unable to close on the Adagio was a “failure”, but “we still run that business and it gets rave reviews”
- Just scratching the surface in terms of using it as an event space, and many other revenue growth opportunities
- A very enthusiastic rah-rah growth speech (which I admit was fun to listen to (beside the beeping) because I too am enthusiastic about the industry)
- Question from investor: Do you drug test your employees? No, but they do not allow use during shifts. Encourage off shift mingling with guests, which part of not just being a hotel, but also entertainment
- Encourages guests to consume in common areas like the porches, living rooms, etc. No smoking in rooms, cannabis is highly social already
- An apology for CannaCamp failure
- Pushes his firms PR sophistication (odd, since PR blew up in his face after over hyping and under delivering, they aren't alone in the cannabis world)
- Discusses possible reality show and other unique cannabis hospitality/lodging/media/licensing opportunities
Wow! Good stuff. I like that business model of just an awesome, unique B&B with great food nestled in a developed wine region in an adult use state. What a country!
Disclosure: I don't own stock in Mary Jane Group. You can see my portfolio as of the middle last month here. I'm not a very active trader.
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