Black Buffalo Inc. Raises $9.75 Million In Growth Capital To Expand Manufacturing Capacity And National Distribution
With key strategic investors Pendyne Capital, Watchfire Ventures, and Open Pantry Food Marts, Black Buffalo's capital raise will enable the company to significantly expand its reach to adult consumers looking to make the switch from traditional moist smokeless tobacco products to smokeless tobacco alternative products
CHICAGO, May 11, 2020 /PRNewswire/ -- Black Buffalo Inc. today announced the successful closing of a substantially oversubscribed $9.75 million growth capital raise including key strategic investors Pendyne Capital, Watchfire Ventures and Open Pantry Food Marts. Black Buffalo plans to use this capital to expand its marketing presence, upgrade its manufacturing capacity, increase its online distribution, and launch into convenience stores and physical retail outlets nationwide. To date, adult consumers age 21 and older have been able to purchase Black Buffalo's smokeless tobacco alternative products online at BlackBuffalo.com.
Black Buffalo was founded in 2015, and the company has invested over 20,000 hours of research and development into creating Black Buffalo's eight products, which include five long-cut and three pouches varieties, all of which contain pharmaceutical-grade nicotine but no tobacco leaf or tobacco stem.
"Black Buffalo's products were developed by a team that collectively dipped traditional smokeless tobacco products for over 60 years," says co-founder and President Mark Hanson, "and our guiding principle has always been that dipping is about much more than just nicotine delivery. It's also about the ritual: from the crack of the seal, to the look and feel of the high-definition embossed tin, to the rich, moist flavor of that first pinch or pouch. We believe that Black Buffalo offers the first true alternative for adult consumers looking to make the switch from traditional dip, as evidenced by our tens of thousands of customers."
With proceeds from this capital raise, Black Buffalo has assembled Premarket Tobacco Product Applications for its entire product portfolio, which the company intends to submit to the U.S. Food and Drug Administration's Center for Tobacco Products in the coming months. Additionally, Black Buffalo has purchased and expects Q2 2020 delivery of a high-throughput pouch maker from one of the world's leading industrial manufacturers. Adding this equipment will enable the company to continue to satisfy demand from its adult customer base, of which nearly half are regular consumers of pouches products.
Black Buffalo's sales have exhibited strong growth in 2020, with month-over-month revenue growth of 31% in March 2020 and 23% in April 2020. "One of the best parts of our initial e-commerce strategy has been having a direct relationship with our customers, whom we affectionately call 'the Herd.' Black Buffalo will always lead with product, but we're equally excited about the opportunity to continue to build upon our already strong brand," says co-founder and Chief Marketing Officer Jeffery David.
In late April 2020, Black Buffalo announced that Donald "Cowboy" Cerrone, one of the most well-known and respected fighters in mixed martial arts, has joined the Herd as an official brand ambassador (Cowboy can be found online as @Cowboycerrone across major social media platforms). Additionally, Black Buffalo has continued to make key hires and investments during the first half of 2020, including hiring Matthew Hanson as Chief Growth Officer, upgrading the company's marketing, manufacturing and distribution capabilities, and implementing transformative company-wide initiatives to support continued rapid growth.
"We have reviewed numerous potential consumer branded goods investments, and we are thrilled to partner with Black Buffalo," says Pendyne Capital's Co-Chief Investment Officer Bo Ramsey. "We believe Black Buffalo has the potential to capture substantial market share in the nearly $7.5 billion moist smokeless tobacco category, for which we believe no true alternative has existed to date for adult consumers."
Robert Buhler, President and CEO of Open Pantry Food Marts, says, "The alternative nicotine category has seen explosive growth over the past few years in the convenience store channel. We believe that Black Buffalo has the potential to be a category leader with its exceptional product portfolio of oral tobacco alternatives. We are excited to help launch Black Buffalo in multiple bricks-and-mortar retailer channels."
To learn more about Black Buffalo and its products, please visit BlackBuffalo.com. Black Buffalo products contain pharmaceutical-grade nicotine, which is an addictive chemical, and Black Buffalo products are intended for use solely by adults age 21 and over who are existing users of tobacco products.
Forward-Looking Statements Any projections or other estimates herein are forward-looking statements and are based upon certain assumptions that Black Buffalo Inc. ("Black Buffalo," the "company," "we," "us," "our," "ours," et. al as noted in context herein) has deemed reasonable. Financial, market, economic or legal conditions, the performance of the company, regulatory developments and other factors could cause actual results to differ materially from those set forth in the forward-looking statements herein. The business and prospects of the company may have changed materially since the date hereof. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) delays or cancellations in spending by our suppliers or customers, (iv) delayed or no approval of our Premarket Tobacco Product Applications, and other filings and submissions, by the U.S. Food and Drug Administration, and (v) the impact of the current coronavirus pandemic or other pandemics or natural disasters on our sourcing operations and supply chain. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.