{ "docId": "019dd923-622c-750b-8b9a-dcf15c64a194", "docSlug": "9350276739a4", "documentTitle": "New Age Beverage Corp. (NBEV)", "authorId": "62_Grizzly_Research", "authorName": "Grizzly Reports", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-06-27 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 20, "pageCount": 29, "prevPage": 19, "nextPage": 21, "slideType": "villain_critique", "function": "name_villain", "density": "overcrowded", "nDataPoints": 3, "notes": "This is a research note from Grizzly Reports criticizing NBEV's business practices and regulatory compliance.", "elementsJson": [ "paragraph", "bullet_list" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-dcf15c64a194/20", "deckHref": "/decks/019dd923-622c-750b-8b9a-dcf15c64a194", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-dcf15c64a194.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-dcf15c64a194#slide-20", "components": [ { "bbox": null, "kind": "callout", "text": "NBEV's CBD related licensing deal with the Marley brand has terribly economics for NBEV.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-70fa-7556-8655-2697749b377d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.77, "x": 0.118, "y": 0.775 }, "kind": "list", "text": "We note that under the FD&C Act, it’s illegal to introduce drug ingredients like CBD into food. Our research indicates that Michigan (one of NBEV’s target states), will default to FDA rules. California also defaults to FDA rules (no CBD in food)", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "05d08a7e-697a-4f49-8267-62d3b961a018", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.77, "x": 0.118, "y": 0.555 }, "kind": "list", "text": "NBEV announced that they will be selling CBD beverages in Colorado, Oregon, Washington, and Michigan starting in March 2019. On Fox Business News CEO Brent Willis said that people can already buy these CBD drinks in certain stores and soon in the 4 states.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3d8cf1b9-0003-4719-884d-43a5ee9b24ce", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.77, "x": 0.118, "y": 0.695 }, "kind": "list", "text": "Is CBD in food legal? In short, probably not. After the Farm bill was passed, the FDA posted a memo that said putting CBD in food is not legal, if moved intrastate.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "60a72345-fbe5-439b-ab1e-63627eed00c7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.77, "x": 0.118, "y": 0.655 }, "kind": "list", "text": "Their press release from January 2019 claims “pharmaceutical grade CBD”.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "696ff264-b3ab-48d4-b02b-bbf9dc4ce0f6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.77, "x": 0.118, "y": 0.855 }, "kind": "list", "text": "Bruce Linton, the CEO of Canopy Growth acknowledged in a recent interview on CNBC’s Mad Money that the FDA has been clear that food including CBD it is not ready for human consumption.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6f5d0dd3-6b19-4ff8-b975-b788638cf015", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.77, "x": 0.118, "y": 0.418 }, "kind": "paragraph", "text": "NBEV's CBD related licensing deal with the Marley brand has terribly economics for NBEV. NBEV ends up paying 50% of revenue for the licensing deal, yet our research indicates that standard rates for this industry are around 25%.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0aacb6fe-a388-415e-85df-301a7b5d27cd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.77, "x": 0.118, "y": 0.118 }, "kind": "paragraph", "text": "support their opinions. Deloitte seems to find itself on the wrong end of many international scandals this year: for example, the Malaysia fine the South China Morning Post reported, and the $8.0 million fine Deloitte had to pay in Brazil.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2ee1a5c8-5671-4e8b-b27c-032acd0f2cc2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.77, "x": 0.118, "y": 0.195 }, "kind": "paragraph", "text": "It is interesting to find big divergences between Chinese and US filings, but this challenge is not new to auditors. It has been repeatedly noted that issues relating to information access remains a key hurdle for outside investors in China.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4340f19e-50b1-499c-962f-24bd20f94f38", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.2, "x": 0.118, "y": 0.518 }, "kind": "paragraph", "text": "CBD Products in the News", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "65b310c1-4009-40a8-a8b9-55121a419b4b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.3, "x": 0.118, "y": 0.335 }, "kind": "paragraph", "text": "A few Words regarding the CBD Hype", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8585cc52-9539-4828-be77-50243d6f66d5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.2, "x": 0.118, "y": 0.378 }, "kind": "paragraph", "text": "Marley deal is terrible", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f291d488-5e3d-45f7-a950-64ed6198351d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Bruce Linton, the CEO of Canopy Growth acknowledged in a recent interview on CNBC's Mad Money that the FDA has been clear that food including CBD it is not ready for human consumption.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-70fa-7556-8655-2a224b7df7d6", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }