CannabisNewsWire Editorial Coverage: The explosive growth recently seen in the cannabis industry presents a rare chance for savvy companies to profit in a virtually untapped market.
- Legal marijuana market projected to reach $146.4 billion.
- United States and Canada current epicenter of cannabis growth.
- Brand recognition and retail reach imperative for market share.
The cannabis bonanza has created a rare window of opportunity for companies that are able to capture market share and create long-term success. Brand recognition and retail reach look to be key to obtaining these lucrative rewards. Shortly after posting its tenth consecutive quarter of increased revenues, Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) announced intentions to further expand its footprint with the acquisition of premier licensed cannabis retailer, City Cannabis Corp. A finalized accretive acquisition will add significant revenues to Wildflower, providing access to several valuable cannabis licenses in lucrative premium locations. Other companies in the sector are also looking to grow in the market through a variety of promising ways. Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) announced it has entered into a binding letter agreement with Hempco Food and Fiber Inc. to acquire all of the issued and outstanding common shares of Hempco not already owned by Aurora. Green Thumb Industries Inc. (OTCQX: GTBIF) (CSE: GTII) has closed on the acquisition of Los Angeles-based For Success Holding Company, the creator of Beboe branded cannabis products. Acreage Holdings Inc. (OTCQX: ACRGF) (CSE: ACRG) announced that it has entered into a definitive arrangement agreement that grants Canopy Growth the right to acquire 100% of its shares. And as part of its strategy to become a multistate operator, Choom Holdings Inc. (OTCQB: CHOOF) (CSE: CHOO) (CHOOF Profile) has signed a letter of intent to purchase a 95% equity interest in a Florida-based vertically integrated cannabis applicant.
To view an infographic of this editorial, click here.
Extraordinary Market Development
The extraordinary development of the cannabis industry can be tied at least in part to a wave of public support that has turned into overwhelming acceptance. Fifteen years ago, only a third of Americans were in favor of federal legalization of marijuana. Today, an estimated two-thirds of Americans support legalization, up from only 54% two years ago. Among adults under age 35, a whopping 85% favor federal legalization. Public acceptance gained so much momentum so fast that the cannabis industry is struggling to meet the demand. As the cannabis industry and markets mature, acquisition and consolidation announcements have become almost daily occurrences.
The global legal marijuana market, valued at $9.3 billion in 2016, is expected to reach $146.4 billion by the end of 2025, an incredible 16-fold increase over nine years. Legal cannabis markets are still relatively new, and the market is nowhere near its total sales potential. An estimated 272 million global consumers use cannabis, equivalent to only about 4% of the world’s population. Staggering increases in those numbers appear to be all but certain. Perhaps nowhere is this hyper-growth more spectacular than North America. Wall Street's top cannabis analyst forecasts the U.S. market to grow to $80 billion by 2030 assuming national availability.
Center for Growth
Cannabis demand is even greater north of the border. The industry has been facing cannabis supply shortages ever since recreational cannabis was legalized across Canada. For example, the cannabis market in country’s westernmost province, British Columbia, registered slightly over CA$19 million in legal cannabis sales in 2018, but that number is projected expected to explode to CA$722 million in annual sales in the next five years by — a mind-boggling 37-fold increase over six years.
Pegged to soar nearly 3,700% by 2024, British Columbia is an ideal center for cannabis growth. Headquartered in the heart of this upsurge, Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) has already staked out an enviable market position and is further expanding its retail footprint and product distribution in the province. The company announced that it intends to acquire City Cannabis Corp. in an all-stock deal.
Holding two of the three City of Vancouver licenses to sell cannabis, City Cannabis is a premier cannabis retailer and the only company with multiple licenses in British Columbia. The Letter of Intent looks to solidify Wildflower’s position as a high-profile retail outlet of premium brands generating millions in revenues right in the heart of the B.C. cannabis boom.
“City Cannabis and Wildflower are the perfect combination of premier products and a premier consumer retail experience,” said Wildflower CEO William MacLean. “City Cannabis’ retail consumer data and insight will help shape development of Wildflower’s product line-up while the retail expertise of City Cannabis will aid Wildflower in its retail expansion. The combination of Wildflower and City Cannabis will form a truly global cannabis company.”
First established in British Columbia in 2012, Wildflower now has a retail reach that extends from Vancouver to New York. Wildflower Brands is constantly expanding development, design, marketing and retail distribution of its branded products in the cannabis sector. The company launched into Washington State in 2016 and has seen consistent growth ever since.
Creating a Global Brand
Today Wildflower markets its distinctive CBD+ products to more than 300 retailers in the health and wellness sector and operates in regulated cannabis markets throughout North America in accordance with jurisdictional regulations for THC and CBD+ products. Wildflower’s unique and holistic products are developed and manufactured at the company’s U.S.-based GMP facilities, tested by a third-party lab and backed by a 100%-satisfaction guarantee.
Each Wildflower product is synergistically formulated to create a unified global wellness brand. For example, Wildflower’s highly recognized Wildflower Wellness brand offers a broad array of hemp-based, full-spectrum, CBD-infused products from vaporizers and capsules to tinctures, soaps and topicals.
The company’s King Recharge is on the cutting edge of cannabis technology and delivery systems with its King Extracts, a sleek, rechargeable vaporizer offering five popular CBD strains and a unique pocket-sized charging and storage case.
Closely associated with select hospital oncology departments, Exclusive is Wildflower’s Los Angeles-based dispensary of premium cannabis products. Wildflower already owns 14 cannabis licenses in California for recreational and medical cannabis cultivation, manufacturing, distribution, retail and delivery. Activating all these licenses could be a jackpot for the company, driving revenues while minimizing risk.
Expansion into Canada with the acquisition of City Cannabis is the next step in Wildflower’s global strategy. The thriving retail outlet, with licenses for several more locations, provides Wildflower with a high-profile presence in what may be one of the greatest growth markets in the world. Wildflower plans to market its enormously successful products through the outlet and launch into the over-the-counter market with its CBD formulations and accessories.
An Expanding Footprint
Wildflower’s U.S. presence now encompasses more than 200 retailers in Washington state and more than 20 retailers in New York City. The company partnered with Retail Worx to establish shop-in-shop retail locations in the nucleus of New York and open its first Wildflower by Bridges General store.
A clear next move for Wildflower in this partnership is a rollout into other Bridges General’s stores in New York City and San Francisco. Retail distribution in other major U.S. markets includes over 80 wellness and healthcare practitioners and an army of retail stores nationwide numbering in the hundreds. Wildflower is aggressively expanding both brand recognition and retail reach.
Wildflower continues to capture increasing market share with innovation, retail expansion and a growing family of popular brands. The company’s strategic partnerships, acquisitions and organic growth are all strengthened by the company’s focus on creating loyal consumers.
Grabbing national and celebrity attention, Wildflower used ingenious product placement during the 2019 Oscars by including its CBD+ Healing Stick in each of the gift bags of the stars, and Hollywood is embracing the product.
But Wildflower didn’t just aim for the stars. Wildflower launched an infomercial campaign in Phoenix promoting the company’s Wellness’ Cool Stick. And across the country, the company has employed an innovative pop-up store technique in SoHo, New York, to introduce its Wildflower Wellness products. To make this happen, Wildflower identified a compatible high-profile retail venue and struck a deal with the outlet, then marketed its products with fanfare in the upscale establishment for a limited time period, raising market uptake and visibility.
Clearly Wildflower seems to be on a mission to create a global cannabis enterprise. With such rapid expansion of brand recognition and retail distribution, Wildflower is firmly establishing its hold on the cannabis bonanza.
Buying Up Cannabis
And Wildflower isn’t alone in focusing on the booming cannabis business. Several market leaders have announced recent moves designed to strengthen their positions in the sector.
With its acquisition of the remaining common shares of Hempco, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) gains low-cost, high-volume access to hemp for the extraction of CBD, a component that has been recognized for its therapeutic benefits across a wide range of medical indications and wellness applications. Aurora recognized this potential early, investing in Hempco as early as 2017. The company subsequently expanded its hemp-based infrastructure through the acquisitions of Agropro, Borela and ICC Labs.
By acquiring the Beboe product line, Green Thumb Industries Inc. (OTCQX: GTBIF) (CSE: GTII) reinforces its commitment to provide nationwide access to safe and effective cannabis. “The meticulously crafted suite of Beboe products supports the premium segment within GTI’s brand portfolio and is firmly aligned with our long-term growth strategy,” said GTI founder and CEO Ben Kovler. “Beboe has an extremely talented team, a robust innovation pipeline, an aligned vision on the future of cannabis and a ground-breaking partnership with Barneys New York. We are thrilled to have the visionary Beboe team officially on board with GTI.”
Acreage Holdings Inc.’s (OTCQX: ACRGF) CSE: ACRG) agreement with Canopy Growth gives CGC the right to acquire 100% of the shares of Acreage, with a requirement to do so when cannabis production and sale becomes federally legal in the United States. "From the first day we created our company, providing exceptional customer care and delivering shareholder value have been our top priorities,” said Acreage Holdings chairman, CEO and president Kevin Murphy. “This transaction will help accomplish both. When the right is exercised, having access to Canopy Growth's deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint. At the same time, a confluence of factors is making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale. Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside."
An emerging adult and medical use cannabis company that has secured one of the largest national retail networks in Canada, Choom Holdings Inc. (OTCQB: CHOOF) (CSE: CHOO) is looking to expand into Florida. The cannabis applicant at the heart of the company’s equity interest agreement is progressing on its master license application to operate up to 25 retail locations as well as a microprocessing and cultivation facility for medical purposes. Upon completion of the transaction, Choom will use its medical brand, Clarity Medical Centres, to create a network of branded medical marijuana treatment centers.
Some have called what is happening now in the cannabis sector a once-in-a-generation opportunity and predict that this is the start of a decade-long cannabis bull market. All indications point to those predictions being correct.
For more information on Wildflower Brands, visit Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)
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