This oil and fuel firm will quickly be promoting CBD private care merchandise.
The shareholders of a penny-stock oil and gas company in Minneapolis are now shareholders of a penny-stock CBD cosmetics business.
An oil and gas company in Minnesota, which previously made ice skates in Colorado, will rework its corporate structure. This time it becomes a manufacturer of personal care and cosmetic products that contain hemp CBD.
Avalon Oil & Gas Inc. (OTC: AOGN), a humble two-person company based in Minneapolis, will change its name to Groove Botanicals Inc., manufacture CBD personal care products, and put its oil and gas stocks on a ferry subsidiary , company officials said on Tuesday in a registration with the Securities and Exchange Commission.
Avalon's directors began researching a possible expedition into hemp-derived cannabidiol products early last year and pressed the trigger in March.
In order to implement such a change, Avalon only had to give the majority shareholders approval, which could only be achieved by its managing director. CEO Kent Rodriguez owns 51.02 percent of the company's shares, according to the SEC document.
Rodriguez could not immediately be reached for comment on Tuesday.
The change follows several years in which Avalon fought for sales and profits.
The company's last available annual financial statements – the financial statements for the twelve months ended March 31, 2014 and 2015 – show annual sales of $ 160,000. Less a one-time benefit from debt disposal, hundreds of thousands of dollars in losses.
Avalon was founded in Colorado in 1991 as Snow Runner (USA) Inc., a manufacturer of sled dog snowshoes. The following decade saw a move to Minnesota, name changes and bankruptcy. In 2005, the company's directors and shareholders decided to change the name to Avalon Oil & Gas Inc.
Just as business relocation is nothing new to Avalon, the company is by no means alone in shifting energy and exploration to the cannabis industry.
Several small oil and gas companies and mining companies have entered the marijuana industry. In Canada, which is expected to legalize adult cannabis later this year, more than 40 mining or energy companies have ventured into the cannabis industry, Bloomberg reported last month.