Today, July 5, 2018 – three good weed companies in our universe announced deals that should add to their bottom line this fiscal year.
Crop Infrastructure (CROP.C) announced a deal with a California company, Ocean Green Management, to partner on multiple applications for Cannabis Retail locations.
Crop will provide cash to purchase the real estate on the grant of a license. The dispensaries will operate under the brand: Emerald Heights.
Combined with the company’s ‘Emerald Triangle’ cannabis production facility currently tenanted by Hempire, these dispensaries would enable CROP tenants to vertically integrate themselves to maximize return on investment.
Crop’s production facility currently consists of a 10,000 square foot medicinal cannabis greenhouse facility and an additional 20,000 square feet of recreational licensed canopy.
“CROP’s goal is to be a vertically integrated company and to have investment exposure in all levels of the supply chain,” stated Crop Director & CEO, Michael Yorke, “We look forward to partnership with Ocean Green and will continue on working on our application with an objective of having retail locations for our tenant brands in California as well as other states and countries where CROP is present.”
CROP can be thought of as a weed-specific Real Estate Investment Trust (REIT) with global ambitions.
The company recently signed a J.V. agreement to own 30% of a 522,000 square foot project in the North-Eastern region of Italy.
We do anticipate that today’s news, and most of the up-coming Crop action, will relate to the U.S. markets.
According to a report from BDS Analytics, sales of cannabis in California is expected to hit $3.7 Billion in 2018 and is projected to grow to $5.1 Billion in 2019 as more dispensaries come online.
ABcann (ABCN.V) announced a deal with the Alberta Gaming, Liquor & Cannabis Commission (AGLC) to supply Alberta with cannabis products for the adult-use recreational cannabis market, which is set to open on October 17, 2018.
“Signing the supply agreement with ABcann will enable the AGLC to ensure that adult-use customers in Alberta will have access to ABcann’s premium branded cannabis products,” stated Barry Fishman, CEO of ABcann Global. “Our new branding, which will be revealed this summer, is supported by extensive market research.”
On a May 03, 2018 business update, ABcann declared that it has, “approximately $130 million in cash, to accelerate the growth of our business” – including the execution of the following go-to-market strategy:
- New consumer brands to be rolled out mid-year 2018
- Harvest Medicine to open 2nd clinic in Edmonton in early Q3 2018
- Launching telemedicine platform in Q3 2018 to provide access to patients seeking medical cannabis in underserved communities
- Secure distribution agreements
- Increase its promotional interactions with cannabis clinic prescribers
- Increase the frequency and impact of its marking and communications
- Upgrade its product line and service offerings.
- Innovative first-of-its-kind vaporizer access program and a Q3 2018 oils launch.
HIKU Brands (HIKU.C) also signed a deal with the Alberta Gaming, Liquor & Cannabis Commission and WeedMD to supply Tokyo Smoke and Van der Pop branded cannabis to the province using WeedMD product.
As Chris Parry recently explained, “The combination of Hiku and WeedMD creates a premium cannabis brand house with fully vertically integrated operations, an expanding network of retail stores, a growing medical business, and four scalable cannabis production facilities, two of which are currently licensed.
Hiku will operate a diverse cannabis supply chain that includes a large portfolio of unique genetics for its growing brand portfolio and emerging nationwide retail sales channels. The entity combines Hiku’s strength in retail and branding — ensuring a high-quality, consistent and educational consumer experience in the adult-use cannabis market — with WeedMD’s existing service and quality in the medical market.
Hiku had previously announced a supply agreement with Manitoba for 2 million grams of cannabis over 12 months, represents another “key piece of Hiku’s business strategy for the adult use market.”
Today’s agreement for Tokyo Smoke and Van der Pop branded cannabis in Alberta is in addition to the previously announced deal.
“The agreement with AGLC strengthens Hiku’s commitment to deliver best in class brands to the province where we have applied for more than a dozen stores in Calgary and Edmonton.” said Alan Gertner, Chief Executive Officer of Hiku.
The Alberta applications follow Hiku’s traction in Manitoba, where Tokyo Smoke was awarded a conditional master retail license, which will allow Hiku Brands to open 10 stores in the province and operate an e-commerce portal.
By mid-morning, Crop is up 19% to $0.18 on 2.4 million shares traded, ABcann is up 2.5% to $0.81 on 154,000 shares traded and Hiku is down 1% to $1.45 on 268,000 shares traded.
Full Disclosure: Crop, ABcann and Hiku are Equity Guru marketing clients and we own stock in each company.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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