FinancialNewsMedia.com News Commentary
Most people if asked could identify the two biggest revenue streams to come from the legal marijuana/cannabis industries: a) recreational; and b) medical marijuana/CBD Infused wellness products. ZDNET addressed both aspects. The first: “…marijuana is one of the most exciting growth industries in the US as it becomes legal in some states, attracts investment, and becomes a vertical that can utilize multiple technologies ranging from the Internet of things to cloud to analytics.” And the second: “In a majority of US states, medical marijuana programs serve as a natural alternative to traditional pharmaceuticals for treating numerous conditions, like neurological and psychiatric disorders, pain control, and cancer. And marijuana has the potential to be the next big legal recreational substance after tobacco, alcohol, and caffeine. Canada has been among the countries leading the way to develop the marijuana industry.” Active Companies from around the market with current developments this week include: Sugarmade, Inc. (OTC:SGMD), Cannabis Strategic Ventures (OTC:NUGS), Aphria Inc. (NYSE:APHA) (TSX:APHA.TO), GrowGeneration Corp. (OTC:GRWG), CannTrust Holdings Inc. (TSX:TRST.TO) (OTC:CNTTF).
But there are more, presently underserved uses to increase the size of the total revenues of the markets. ZDNET continues: “The byproducts of marijuana being grown and processed in industries that have real economic potential include hemp fibers for clothing, upholstery, and other fabric use, as well as sources for biofuel, cooking oils, and green plastics. New research shows that there are potentially hundreds of uses of cannabis and hemp beyond pharmacology, natural medicine, and recreational drug use. Many complementary industries in the agricultural, industrial, technology and services sectors will support the overall marijuana growth industry.”
Sugarmade, Inc. (OTCQB:SGMD) BREAKING NEWS: Sugarmade a major supplier to the growing hydroponic cultivation sector, today announces its intent to acquire a retail location of Washington State-based Hydro4Less. The operation is expected to produce approximately $5 million in revenues and to be profitable during calendar 2019. Additionally, via the pending transaction, Sugarmade will gain an option to purchase two additional Hydro4Less retail operations, which are currently producing in excess of $20 million annually. Should all three acquisitions close, Sugarmade will increase its annual revenues by approximately $25 million per year.
This pending acquisition when combined with pending transactions with BizRight, LLC and Athena United, LLC, both of which also operate in the hydroponic cultivation sector, will place Sugarmade among the ranks of the largest cannabis-related revenue producing companies. Throughout these transactions, Sugarmade will remain only as a supplier to the cannabis industry and will not transact in business where cannabis or cannabis derived products are bought or sold.
“Our BizRight marketing arrangement gives us a strong online presence while our Athena United deal gives us exposure to the large commercial growers, which is an area of expected accelerating revenue growth. Hydro4Less rounds out our marketing efforts and expands our marketing footprint in the Pacific Northwest by adding additional resources that are commercially focused, while also contributing a retail walk-in component allowing our customers to not only acquire products quickly, but to also connect with our highly experienced staff,” commented Jimmy Chan, CEO of Sugarmade.
Under the terms of the pending agreement, Sugarmade will acquire the Washington state flagship location in an all stock transaction pending mutual due diligence, completion of the definitive agreement and approval by both boards of directors.
Mr. Chan continued, “Sugarmade is expecting to realize exceptional revenue growth this year from all of our hydroponic-related market sectors. We are excited about having the very talented staff of Hydro4Less join the Sugarmade family of companies. We continue to seek additional acquisitions to further boost our already expected robust revenue growth rate.” Read this and more news for Sugarmade at: http://www.financialnewsmedia.com/news-sgmd
In other industry developments and happenings in the market this week include:
Cannabis Strategic Ventures (OTCPK:NUGS) recently announced that it has signed a Letter of Intent to partner with a Santa Barbara County cultivation operation that holds approximately 40 commercial cannabis licenses from the County of Santa Barbara, the California Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch, and the CalCannabis Cultivation for growth, manufacturing and cultivation. The parties involved are working on a final agreement. “As we increase Cannabis Strategic Ventures’ stronghold in the California cannabis market, we are pursuing partnerships that are strategically aligned with our corporate growth plans,” comments Simon Yu, CEO, Cannabis Strategic Ventures. “Obtaining access to a large batch of licenses located between the cannabis-friendly cities of San Francisco and Los Angeles will allow us to expedite our growth and scalability.”
Aphria Inc. (NYSE:APHA) (TSX:APHA.TO) announced that it has recently entered into an exclusive agreement (the “Agreement”) with Toronto-based UNOapp, Inc. (“UNOapp”) to collaborate on the development of technology and analytics solutions for Canada’s adult-use cannabis industry. “With our innovation-focused approach, Aphria is setting the pace for the evolution of the adult-use cannabis industry in Canada,” said Jakob Ripshtein, President of Aphria. “Our industry’s long-term future will be driven by consumer-centric, innovation-led product, brand and technology solutions. We are excited for this collaboration with a fantastic technology partner in UNOapp and look forward to developing industry-leading solutions that shape the adult-use cannabis market for years to come.” Founded in 2010, UNOapp has developed proven technology, marketing and analytical solutions that has enabled more than 4,500 customers across the globe to engage with their customers and drive revenue.
GrowGeneration Corp. (OTCQX:GRWG) recently announced that it has purchased all the assets of Chlorophyll, Inc. (“Chlorophyll”). Located in Denver, CO, this super store, with over 20,000 sq. ft. of warehouse and retail space, will be the 6th store in the GrowGeneration portfolio of stores in Colorado. “This transaction marks our 1st acquisition in 2019, adding $8 Million in revenue to our Company. Adding Chlorophyll, located directly in a strategic location with high visibility in Denver, CO., adds one of the largest and highest volume hydroponic stores in the country. Chlorophyll has a seasoned team, and we are excited that the founders, Beau Speicher and Lee McCall will continue to support the company in a sales and business development role.”
“We are excited to be part of the GrowGeneration portfolio of companies. As the largest hydroponic store in Denver, CO, our customers will benefit with more product offerings, competitive pricing and expanded professional services. We were attracted to GrowGeneration’s model and track record of building a national chain of stores, applying a professional management team, with a strong financial position.”
CannTrust Holdings Inc. (TSX:TRST.TO) (OTCPK:CNTTF) recently announced that it has obtained the necessary permitting from the Town of Pelham to proceed with its Phase III expansion with the construction process set to commence immediately.
The enhancements to the Phase III expansion include investing in automation and a higher level of climate control. Given these enhancements and the time it has taken to obtain permitting, construction of the Phase III expansion is expected to be complete in the third quarter of 2020. Initial harvest from the Phase III expansion is expected in the second quarter of 2020 and full production capacity is expected in the second half of 2020. In order to address local concerns from the emission of light from its facilities, CannTrust is proceeding to add additional fan ventilation so its shades can be completely closed, at minimal incremental cost.
“We are pleased with the outcome of the discussions with the Town of Pelham,” said Peter Aceto, CEO of CannTrust. “We believe this decision reflects our view that we are a trusted member of the community and that we are intent on listening to our stakeholders. The demand for our medical and recreational products continues to be well in excess of supply and we are keen to move ahead with the Phase III expansion and meet our capacity targets. We also continue to evaluate several strategic alternatives to meet and increase our initial production capacity goals. We are actively pursuing strategic acquisitions of land and facilities, both inside and outside Ontario and hope to update shareholders with these initiatives in due course. Our active patient count continues to increase, and the recreational market is currently undersupplied. We intend to make every effort to serve these markets with our award-winning products.”
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