Halo Collective Inc. (“Halo” or the “Company”) (NEO: HALO) (OTCQB: HCANF) (Germany: A9KN) today announced that it has received all final approvals from the Los Angeles Department of Cannabis Regulation (the “DCR”) and California Department of Cannabis Control (the “DCC”) to commence adult-use sales at its Budega branded retail dispensary in the Arts District of North Hollywood, California (“NoHo”). With the required license and permits in hand, the Company’s focus has transitioned from the regulatory approval process to further readying the location to open. This includes implementing the State’s required “track and trace” system, receiving initial product orders from vendors, merchandizing the store and preparing for its first customers in early March.
The 1,200 square foot retail facility is strategically located at the northwest corner of Lankershim Boulevard and Hesby Avenue in the NoHo Arts District, a vibrant and heavily trafficked section of metropolitan Los Angeles. NoHo is fast developing, with over $1 billion being invested over the coming years in a series of large-scale housing and commercial development projects1.
“It has been a lengthy, complicated process to get to this pivotal and exciting moment for the Halo team. Despite the ongoing challenges COVID and external forces have presented us, we have persevered and our first Budega store in NoHo is on the verge of opening. With the licenses in place the team can begin the final stages of preparing and stocking the store for its opening,” said Katie Field, President and Director of Halo.
Retail Strategy Budega
The NoHo location is expected to generate up to $10 million of annual retail sales at maturity2. The Company is also licensed for delivery, and this additional service is expected to increase top-line sales and help capture overall market share. The NoHo location’s delivery service area will include Studio City, North Hollywood, Hollywood Burbank, and the Eastern San Fernando Valley.
Budega will offer a product assortment exceeding 1,000 SKUs, including many top-tier California brands and the debut of the Budega branded product lineup. The Budega dispensaries will also stock Halo’s Hush branded cartridges, gummies and pre-rolls. Ms. Field commented further, “Not only will the opening of NoHo significantly increase our topline net revenue but, furthermore, the Company expects to increase profit before tax margins by stocking up to twenty percent of Budega’s shelf space with Halo brands and products.”
California remains the highest-grossing state for cannabis retail sales in the United States but also has among the lowest per capita density among other mature recreational cannabis markets. There are approximately 250 licenses3 in Los Angeles County for a population of 3.9 million across 500 square miles, compared to Oregon, which has a population of 4.3 million people and approximately 800 stores4 across 98,466 square miles5. In California, licensed cannabis shops offering legal goods are more sparsely scattered across the state. There are roughly two licenses per 100,000 people in California, one of the lowest rates in the nation among states that support legal recreational sales. By comparison, Oregon has 18 retail shops for every 100,000 residents. Colorado boasts a similar ratio, and Washington state’s rate is more than triple California’s6.