Initially, VitaCig was the brainchild of mCig's previous management. It didn't quite fit into Paul's plans to focus on the MJ sector but he was convinced that it could be developed into a separate business. Consequently, he decided to spin it off by giving a dividend to shareholders and let someone else develop the idea in a separate company. Unfortunately, it took longer than expected to complete the spin off and the novelty of the product wore off by the time Al Santos took over as the first CEO. Al had little cash or resources to grow the business and sales were plagued by customs issues in Korea. The solution for Korea's custom problem led to logistics and contract issues with EU that temporarily dried up revenue.
After 8 months sales had plummeted and Paul felt he needed to step back in. Since mCig owned more than 20% of VTCQ, the company could only benefit from its ownership if VTCQ produced positive earnings. He still wanted to focus on mCig and the MJ sector and let someone else deal with the VitaCig product, so he decided to look for a joint venture partner to purchase majority ownership and run the company. While he had several offers, he didn't feel any of them would do justice to existing VTCQ shareholders. In the meantime, he decided to try to boost VTCQ sales by putting his planned CBD product line into the company and renegotiating the overseas partner contracts. When Malecon approached him early this year, he finally saw an opportunity that would give both MCIG and VTCQ shareholders a win-win resolution to the problem.
The final deal with LX Retail Group (Malecon's parent) transferred the VitaCig product line and existing assets and contracts back into mCig and allowed Malecon to go public by purchasing the VTCQ shell. We've now learned that Malecon is projecting $6 million in revenue next year, far more than the VitaCig products could be expected to produce in that time frame. Both MCIG and VTCQ are now in position to do much better since that deal went through. MCIG, since it still owns 9% of VTCQ, will also own an asset that will significantly increase in value in the coming years.
