ROCKY Mtn High/SH SH (OTCMKTS:RMHB) has been out of favor of late. There’s clearly no doubt on that point. Right as the cannabis space has been mounting a massive year-end rally, RMHB has continued to slide down the southern slope of Mount Pain, bucking the industry tailwind and sweating off another 60-80% since late September. However, recent sessions have signaled some new possibilities.
Press from the company has been a part of that story, with management announcing that the company has entered into a three-year Master Manufacturer Agreement with CBD Alimentos SA de CV, a food and beverage distributor from Mexico. According to the release, “During the term of this Agreement, CBD shall have the exclusive right to distribute in Mexico the Company’s energy and soft drinks with hemp seed oil and hemp seed extract. In return, CBD will utilize the Company as its exclusive supplier of its hemp-infused drinks.”
ROCKY Mtn High/SH SH (OTCMKTS:RMHB) bills itself as a company that develops, manufactures, markets, and distributes hemp-infused food and beverage products.
The company offers hemp-infused beverages, including energy drinks, black tea, and lemonade; hemp-infused edibles, such as energy bars; and hemp-infused energy shots and coffee shots. It is also developing wine based ready-to-drink cocktails; cannabinoid infused beverages; hemp protein bars and hemp chia seed bars; and hemp infused natural spring water.
Rocky Mountain High specializes in brand development of health conscious, hemp-infused food and beverage products. The Company currently markets a lineup of four naturally flavored hemp-infused beverages and a low-calorie Coconut Lime Energy drink. Rocky Mountain High Brands also offers hemp-infused 2oz. Mango Energy Shots and Mixed Berry Energy Shots, as well as a new Relaxation Brownie. The Company recently launched a naturally high alkaline spring water, Eagle Spirit Spring Water.
RMHB markets its products through brokers, distributors, and retailers. The company was formerly known as Totally Hemp Crazy Inc. and changed its name to Rocky Mountain High Brands, Inc. in October 2015. Rocky Mountain High Brands, Inc. was incorporated in 2000 and is based in Dallas, Texas.
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As noted above, the company has entered into a three-year Master Manufacturer Agreement with CBD Alimentos SA de CV, a food and beverage distributor from Mexico for rights to distribute the company’s energy and soft drinks with hemp seed oil and hemp seed extract. The deal was all about exclusivity. It gave RMHB status as the exclusive supplier of that market in the country of Mexico to the extent that the market is controlled by CBD Alimentos.
According to the release, “CBD’s initial purchase order will be 8,000,000 cans, worth up to an estimated $3,600,000 in revenue for the Company during late first quarter or early second quarter of 2018. The 2018 volume requirement is 16,000,000 cans including the initial purchase order. This translates to revenue to RMHB of up to an estimated $7,200,000 in 2018 under this contract. RMHB and CBD will work in good faith to agree to a 2019 volume requirement.”
Michael Welch, Chairman of the Board, President and Chief Executive Officer, said, “We are very pleased to have this significant private label opportunity to provide our original hemp-infused drinks in Mexico and are looking forward to working with CBD. This agreement, made possible by CBD, is an important milestone for our Company. We look forward to meeting Mexico’s demand for hemp-infused drinks with our great products. We will work closely with CBD to advance this strategic opportunity.”
Now commanding a market cap of $15.1M, RMHB has virtually no cash on the books, which must be weighed relative to about $2.9M in total current liabilities. One should also note that debt has been growing over recent quarters. RMHB is pulling in trailing 12-month revenues of $479K. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling at -87.5%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $RMHB stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $RMHB, either long or short, and we have not been compensated for this article.