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Cannaroyalty (CRZ.C) pulls Shark Tank-like deal with California weed wholesaler

03/01/2017

Cannaroyalty Corp (CRZ.C) just keeps pounding out the deals, and today announced one that is a straight up killer.

The company will pay US$5 million for a royalty of 2.25% of River Wellness, a wholesaler of 20 cannabis brands in California with US$26 million in revenues in 2016.

That may seem like a good deal on the surface, but when you push deeper, it gets even more legit.

Like something out of a Kevin O’Leary Shark Tank offer, when CRZ has received their initial money back, the royalty drops to 1.75% of net sales and maintains until 2025. But the real kicker: River will distribute $15 million worth of CannaRoyalty brands and products to over 4000 California retail collectives over the next eight years.

This deal is money. It’s a straight up mutual win with both sides coming out of it with something they could really use and no downside, and the risk is near zero.

Said CEO Marc Lustig:

“This is a milestone investment for CannaRoyalty. We expect to earn a significant and stable royalty on the growing revenues of a dominant distribution company that is already a leader in the compliant distribution of medical cannabis products in California, the largest medical cannabis market in the world. Over and above this, we’ve obtained a distribution deal to expand the reach of our brands to the California market.”

This is why Cannaroyalty continues to not only be one of our main holdings, but is also in our top three preferred deals right now. Every move this company makes, and has made to date, is another building block, and nobody has a better chance at building national brands.

We’re conflicted up and down, because we own the stock. But still.

Here’s the news from yesterday:

CannaRoyalty Corp.is pleased to announce that its strategic partner Natural Ventures PR, LLC, Puerto Rico’s largest licensed cultivation and manufacturing medical cannabis company with an indoor growing facility of 100,000 square feet, has successfully harvested its first crop and has begun selling cannabis products to licensed medical dispensaries.

And a week earlier:

CannaRoyalty Corp.is pleased to announce the closing of its previously announced acquisition of a 20% equity stake in Anandia Laboratories Inc., a cutting-edge cannabis biotechnology company, in exchange for aggregate consideration of C$4,042,439.09.

20+ assets and climbing. Stock up $0.12 today to $3.28.

– Chris Parry.

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