About Origin House

Origin House is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. Origin House’s foundation is in California, the world’s largest regulated cannabis market, where it delivers over 130 branded cannabis products from 50+ brands to the majority of licensed dispensaries. Origin House’s brand development platform is operated out of five licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. Origin House is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke

Company Problem

OH needed assistance putting together annual revenue forecasts for each of its cannabis brands. The purpose of the engagement was to establish a monthly operating budget specifically for sales, marketing and distribution. The company’s internal board of advisors and investors required a financial projection for each brand to allocate the master budget for the consolidated portfolio.

Edeska Solution

1. Edeska interviewed the team leaders of each cannabis brand to understand its product mix, pricing strategy across wholesale and retail, its monthly unit production capacity, and current penetration rate in California dispensaries.

2. Edeska reviewed each brand’s historical financials to analyze sales history over the last two years, monthly dispensary penetration rates, seasonality of unit sales, and historical sales/marketing spend.

3. Through using a historical trend analysis and the new sales, marketing, and distribution strategies to be implemented, Edeska prepared a monthly sales projection for each brand along with the required KPIs needed to achieve the revenue targets. These KPIs are outlined below.

- Total Sales Force

- Average Dispensary Accounts per Sales Force

- Total Dispensaries in Total Distribution Network

- % of Distribution Network Selling Brand Product

- Total Dispensaries Selling Brand Product

- Dispensary Breakdown by Tier Level

- Total Units Sold by Tier Level

- Product Pricing (Internal Metric to Support COGS and GPM $ and GPM %)

- Product Segmentation % of Total

- Sales Revenue

- Market Share [Revenue % of Total]

Edeska Results

Following the exercise, the company’s internal board of advisors and investors approved the budget of each brand.  Origin House has become a leading distributor and provider of brand support services in California, the world’s largest regulated cannabis market. Origin House’s proven strategy has been to build relationships with established dispensaries, build partnerships with established market-leading brands, develop promising cannabis product companies, and then leverage its full suite of support services to transform those products into strong California consumer brands. Origin House now delivers over 50+ cannabis brands to more than 500 dispensaries in California, representing approximately 60% market penetration

Six months following the engagement, OH was acquired by CL for $1.1 billion. The synergies of the transactions are highlighted below.

- Combination of CL and OH will result in the premier distribution company serving California, the largest cannabis market in the world;

- CL’s entrance into the California market with the addition of OH’s vast distribution platform;

- Establishes the cannabis industry’s first national “house of brands” with a growing multi-state footprint that includes leading distribution market share in some of the largest states in the country including California, Pennsylvania and Illinois;

- Combines the expertise of two industry leaders in branded product development and distribution;

- Positions CL as the preferred partner for additional premier cannabis brands seeking distribution on the industry’s most expansive platform;

- Enhances CL’s capital markets presence by significantly increasing its scale and the liquidity in the Company’s stock, resulting in improved ability to attract institutional investment and lower its cost of capital.