MIAMI, FL, July 25, 2019 – Tiger Reef, Inc. (OTC: TGRR) (“Tiger Reef” or the “Company”), an emerging leader in cost-efficient clean energy solutions targeting the CBD and legal Cannabis markets and producer of ultra-premium rum under the Tiger Reef® brand designation, issues the following letter to Shareholders from the CEO:
Dear Valued Shareholder,
I want to start off today by expressing our deepest gratitude to our most loyal and committed shareholders. It has been a long road to get to our present moment of opportunity, and we couldn’t have made it here without your continued support. Today, I want to present a map of how we plan to reward that commitment by outlining the specific opportunity we believe will maximize shareholder value and future returns on capital invested in Tiger Reef.
Earlier this week, we announced the signing of a Letter of Intent (“LOI”) to acquire Atlas Solar Holdings, LLC (“Atlas”). We have been shopping for an opportunity like this for some time, and Atlas turned out to be a perfect fit for our needs as we ramp up our operations as a leading provider of renewable energy solutions tailored to companies operating in the cannabis and CBD sector.
It turns out that cannabis producers use 10 times as much energy as a typical office building. A 2018 New Frontier Data research study estimated that total power consumption for the entire legal cannabis industry in the U.S. clocked in at 4.1 billion kw/h of energy. At $0.12 per kw/h (avg cost of electricity in US), that comes to $492 million. Given the enormous growth we are seeing in the space this year, one can imagine that number is extremely light as far as the true scope of this target market for energy solutions in 2019 and beyond.
The big point is this: CBD and cannabis producers are increasingly confronting a long-term profit margin squeeze that is the direct result of excessive energy costs and falling cannabis and CBD prices as the industry gradually and inevitably evolves into a commodity market.
Tiger Reef is, to our knowledge, the only publicly traded company targeting this problem with a viable solution and an aggressive path. Our solar energy solution should cut energy costs for most cannabis producers by up to 40%, and to do so with a fully-renewable energy source, which drives extra value in the form of image-building with a target consumer base (cannabis and CBD consumers) that tends to care a great deal about environmentally friendly energy solutions.
With growth in the CBD and cannabis marketplace continuing to accelerate, and the number of producers continuing to expand at a steady clip, we believe we are targeting an enormous market opportunity with this approach. We are pursuing this opportunity in two ways: expanding our capacity to provide energy and expanding our sales and marketing operations.
Our LOI with Atlas obviously represents the first of these ideas. Atlas currently owns and operates 34 industrial solar installations that, together, produce over 420,000 KWh of solar electricity on an annual basis, thereby also generating roughly 420 solar renewable energy credits (SRECs) each year as well. Atlas also produces a pile of net cash flows – over $120K per year as a direct result of its solar operations.
The second prong here is the establishment of an aggressive direct marketing campaign to drive home the point to producers in the space that we can help open up their margins in many cases. This is critical. We have a solution that can work, but we have to make sure our target market understands that. In this case, our target market is the producers. And we are building a sales force to create that awareness right now.
Energy costs are increasingly squeezing margins in the cannabis and CBD space. This is something that will dominate strategic discussions over coming months and quarters at many large and currently cash-rich production facilities.
We are going to do everything we can to be a part of those discussions and to have enough capacity to deliver on this powerful opportunity when called upon. We will strive to keep you updated as this process unfolds.
Scott Sitra, President and CEO
About Tiger Reef: Tiger Reef, Inc. is a developer and operator of solar and clean renewable energy projects focused on reducing overall energy costs and the carbon footprint for Cannabidiol (CBD) producers and legalized marijuana growers. Tiger Reef also has developed a line of ultra-premium rums under the Tiger Reef® brand. For more information, visit www.tigerreefinc.com.
Forward Looking Statements: Certain statements in this release, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties. There can be no assurance that such forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Tiger Reef, Inc. (“Tiger Reef”) assumes no obligation to update forward-looking statements should circumstances or management’s estimates or opinions change, other than as required pursuant to applicable securities laws. For a description of additional risks and uncertainties, please refer to Tiger Reef’s filings with the Securities and Exchange Commission, including “Risk Factors” in its Annual Report filed on Form 10-K.
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