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CIM: What is the retail price of the Oblend? What is your gross margin on Oblend sales?
Nicole: When an Oblend is purchased, the sale includes the Oblend, a cartridge starter kit, and the Oblend app. Our 5 year forecast assumes an average price of $599, decreasing to $499 in 2021, and $399 in 2022. Based on an independent market study which included over 1,500 cannabis consumers, 23% would pay $799 or above for an Oblend. Our forecast assumes that we’ve sold a cumulative total of 175,000 Oblends by the end of 2022, which represents less than .3% of the US cannabis market. Assuming that the average cannabis consumer spends $200 per month on cartridge replacements, Altopa would be generating over $500 million in revenue during 2022 just from the sale of Oblends and cartridge replacements.
Oblend margins are low but in line with typical consumer electronics. Our business is driven through the sales of consumables. Cartridge replacements will sell for $20 and up, depending on the cartridge ingredient. Margins on cartridges average 80%.
CIM: How much debt does the Company have?
Nicole: Altopa has issued convertible notes totalling $1.3 million to date. These notes carry interest which will convert with the principal into Preferred Series A equity upon the closing our $5 million Preferred Series A financing at a discount to the yet-to-be-determined valuation. Other than these notes, we have no debt.
Q& A
Altopa, Inc.
Nicole Wicker, CEO
U.S. CannaInvestor Magazine
Derwin Wallace (CIM)
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