CannaRoyalty (CRZ.C) extended the market reach of its CR Brands when the company announced today that its investee, Natural Ventures, has begun the manufacture and distribution of Soul Sugar Kitchen™ gourmet edibles and Greenrock Botanticals™ in Puerto Rico.
According to the news release, Soul Sugar Kitchen has developed a line of award-winning gourmet edibles, including truffles, peanut butter cups, savory mixes and jellies, while GreenRock Botanicals has developed a line of premium vape pens designed to operate as good as they look.
Natural Ventures (“NV”) is Puerto Rico’s largest licensed producer, manufacturer and distributor of Cannabis with an impressive 100,000 square foot indoor cultivation facility.
NV is also one of two companies to have received a license for its 30,000 square-foot state-of-the-art lab for processing, testing and distribution. As such, NV has great penetration, currently selling to every active dispensary in Puerto Rico.
So, what’s this mean for CannaRoyalty?
Well, CannaRoyalty has a ten-year 2.5% financing royalty on Natural Ventures net profits and it also earns an additional 10% licensing royalty on gross revenues generated from products licensed by NV from CannaRoyalty for the Puerto Rican market.
This commencement also shows CannaRoyalty executing on its CR Brand expansion strategy while assisting an investee gain market share within its space.
Natural Ventures CEO, Edgar Montero, commented, “They just get it. We are thrilled about expanding our relationship with CannaRoyalty by launching a number of products from the CR Brands portfolio. Initial reaction from leading dispensaries has been very positive as both Puerto Rico and the Caribbean have not been exposed to such a breadth of quality products.”
He went on to add, “Beyond the products, we are able to benefit from CannaRoyalty’s professional branding, marketing and support, which we believe is best in class. We are confident that with CannaRoyalty now having an incentive on both top line success and net profits, this will further align our organizations to capitalize on the exceptional Puerto Rican medical cannabis market opportunity.”
CannaRoyalty’s recently completed transaction with leading Californian distributer, River, contemplates preferred distribution of CR Brands products, including a $20.0 million-dollar purchase commitment.
The company’s CR Brands products have also been made available for future distribution under license in Canada by LP, Aphria (APH).
CannaRoyalty continues to seek opportunities to add to its portfolio and shareholder value.
So, what does this mean to the investor?
The marijuana market is spinning its wheels right now, and it may not find direction until the recreational hammer drops across the US and/or Canada. So, there’s no way to tell for sure whose deal is going to be gold and whose deal is just going to grow old. CannaRoyalty has hedged their bets with an extensive and diverse portfolio of 25 investee deals.
The markets seemed pleased with the announcement today as SP for CannaRoyalty rose 6.45% to $1.98 per share on moderate volume.
CannaRoyalty currently has 41,850,345 shares issued and outstanding with a market cap of $82.83 million.
FULL DISCLOSURE: CannaRoyalty is an EQUITY.GURU client.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
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