Maverick Lifestyle filed for an initial public offering as the Wilson County company seeks to attract tobacco and marijuana users to its hemp-based cigarettes, blunts, gummies and related cannabinoid products. So far, its efforts haven’t led to profits.
The Stantonsburg-based maker of DVNT, Green & Wild and three other brands plans to sell 1.22 million Class A shares at a price between $4.50 and $5, according to a securities filing earlier this week. In addition, 15 of the company’s investors plan to offer 2.2 million Class A shares.
The company projects net IPO proceeds of about approximately $4.6 million, based upon a share price of $4.50. The money will support marketing and advertising, hiring, machinery upgrades and expenses, according to the filing.
The company said it has incurred “significant net losses’’ since its inception nearly three years ago, with $1.8 million in losses in the year ended Dec. 31, 2023. Revenue totaled $2.13 million in the year. At that time, it had an accumulated deficit totaling $7.7 million and working capital of about $527,000.
Maverick’s net loss narrowed to $543,683 in the first nine months of 2024 from $1.39 million a year earlier.
CEO Victor Krahn will control shareholder voting power as he and other Maverick officers and directors will own separate Class B shares. Each of those shares is entitled to 10 votes, whereas a Class A share gets one vote. The insiders will control an estimated 83.5% of voting rights.
The control by Class B shareholders “may limit or preclude’’ other stockholders from influencing corporate matters, including business decisions, the filing said. It also warned that buying Class A shares “involves significant risk.’’
As an “emerging growth company,” as defined by securities laws, Maverick will be subject to less rigorous public reporting requirements than more established companies. As a result, stockholders “could receive less information than they might expect to receive from more mature public companies,’’ the filing said.
“As a result, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern,’’ the filing said.
From its operations in southeastern Wilson County, Maverick has nine full-time employees who produce hemp-derived products, such as pre-rolled joints, cigarettes, cigarillos, disposable vapes, gummies and puff ball edibles. The company also develops high-speed machinery for the makers of hemp and cannabis products.
Maverick’s cannabinoid products comply with federal law limiting their content of tetrahydrocannabinol (THC), the filing said. Cannabis refers to all products derived from the plant Cannabis sativa. Unlike Maverick’s products, marijuana comes from parts of the plant that contain substantial amounts of THC, the cause of hallucinations.
Maverick is trying to grab customers from rivals making hemp-derived products, as well as producers in the long-term declining market for tobacco and the growing market for legal marijuana. It’s going after consumers in the southeastern and eastern U.S.,” where cannabis is not yet legal recreationally.
“Our goal is to provide choice, affordability, and a legal smoking experience for both existing tobacco and marijuana consumers and new hemp smokers as a preferred adult-use alternative to tobacco products and expensive, inaccessible cannabis consumption.’’
