FinancialBuzz.com News Commentary
NEW YORK, Feb. 4, 2018 /PRNewswire/ -- The mania revolving around cannabis has caused a large influx of cannabis-based companies to enter into the marketplace. Companies have filed initial public offerings within Canadian exchanges, but because the U.S. dominates 90% of the global cannabis market, many of those companies have already or are trying to list in the U.S. even though the U.S. has not fully legalized cannabis. Regardless, states like California, Colorado, and Nevada are all positioned to deliver immense growth. According to data compiled by Mordor Intelligence, the global cannabis market was valued at USD 7.7 Billion in 2016 and is expected to reach USD 65 Billion by 2023. Additionally, the market is set to grow at a CAGR of 37%. The market is also being propelled by various countries working to legalize cannabis for medical usage and U.S. states legalizing it for recreational use. 3 Sixty Risk Solutions Ltd. (OTC: PTVYF), Tilray, Inc. (NASDAQ: TLRY), Innovative Industrial Properties, Inc. (NYSE: IIPR), Charlotte's Web Holdings, Inc. (OTC: CWBHF), Canopy Rivers Inc. (OTC: CNPOF).
Cannabis-companies based around cultivation, retail, and distribution are currently the more popular segments. But due to the growing industry, new private and public sectors have been introduced, and notably, security services have come into the spotlight. While the segment is a relatively small sector compared to others, the rising concern over protection has nevertheless increased demand for security. Now, regardless of the sector cannabis companies are involved in, security services are becoming deemed essential, whether it is for surveillance, on-site security, and even transportation of products. "Post-prohibition security, in this new epoch of cannabis commerce at the state level, is decidedly technology-driven and is even more important for owners and managers in the emerging free market for cannabis products. Government compliance, liability, protecting profits, customer and employee safety, and deterring theft are all vital pillars of security within the industry," said Allen St. Pierre, Vice President of Communications for Freedom Leaf, a partner in the investment firm Sensible Alternative Investments.
3 Sixty Risk Solutions Ltd. (OTC: PTVYF) is also listed on the Canadian Securities Exchange under the ticker (CSE: SAFE). Earlier last week the Company announced breaking news that, "the Company, which operates through its wholly-owned subsidiary, 3 Sixty Secure Corp., has entered into a multi-year, service agreement to provide guarding and secure transport services to an affiliate of MJardin Group, Inc. ("MJardin") (CSE: MJAR) (OTCQX: MJARF), a global cannabis management platform with extensive experience in cultivation, processing, distribution and retail with more than 30 cultivation facilities under operation. The agreement provides a full suite of security services to MJardin facilities in Canada including security patrols and equipment monitoring as well as secure transport of cannabis products.
"We are extremely pleased to have been selected by MJardin to provide security services," said Thomas Gerstenecker, CEO and Founder of 3Sixty. "We believe that this agreement provides more evidence that we are a leader in cannabis security in North America as we continue to attract high quality clients that trust us to secure their facilities and high value products. MJardin has one of the largest international footprints of any cannabis provider. We believe that its ambitions, to expand in the US, Canada, Europe, Africa and Latin America and to become a top three cannabis platform globally, align with our own strategic growth priorities."
"Our goal is to remain a leader in cannabis-focused security by providing world-class security services to our top-tier customer base," added Thomas Gerstenecker. "We continue to seek new services to offer to our existing customers and we are looking beyond our borders for geographic expansion opportunities that allow us to export our expertise across Canada, the US and internationally through organic means and by executing on disciplined M&A. MJardin, based in Denver, Colorado with offices in Toronto and Barcelona, has more that 550,000 square feet under cultivation which, in our view, represents a tremendous opportunity to grow our security services business."
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Tilray, Inc. (NASDAQ: TLRY) is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids currently serving tens of thousands of patients and consumers in twelve countries spanning five continents. Tilray, Inc. recently announced that it has entered into a definitive agreement pursuant to which Tilray, through a wholly-owned subsidiary, will acquire all of the issued and outstanding securities of Natura Naturals Holdings Inc., the parent company of a licensed cultivator of cannabis. As a result of the acquisition, if completed, Tilray will obtain Natura's 662,000 sq. ft. greenhouse cultivation facility, of which 155,000 sq. ft. are currently licensed, and all subsequent cannabis output from this facility. Natura, through a wholly-owned subsidiary located in Leamington, Ontario, is a licensed cultivator under the Cannabis Act specializing in the greenhouse cultivation of cannabis. "We're very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market," said Brendan Kennedy, Tilray President and Chief Executive Officer. "Through an extensive and thorough search for the right supply partner, we're pleased to have come to a mutually-beneficial agreement with Natura."
Innovative Industrial Properties, Inc. (NYSE: IIPR) is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. recently announced that it closed on the acquisition of a property in Barry, Illinois, which comprises approximately 75,000 sq. ft. of industrial space situated on approximately ten acres. The purchase price for the property was USD 19 Million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with a wholly owned subsidiary of Ascend Wellness Holdings, LLC, which intends to operate the property as a medical-use cannabis cultivation and processing facility in accordance with Illinois medical-use cannabis regulations. Ascend is expected to complete additional tenant improvements for the building, for which IIP has agreed to provide reimbursement of up to USD 6 Million. Assuming full reimbursement for the tenant improvements, IIP's total investment in the property will be USD 25 Million. "We are very pleased to close on this transaction with Ascend in Illinois, marking our ninth state where we own properties," said Paul Smithers, President and Chief Executive Officer of Innovative Industrial Properties, Inc. "We look forward to supporting Ascend as their long-term real estate partner, as they launch and continue to expand their operations in a number of states to meet the tremendous demand for patient treatment."
Charlotte's Web Holdings, Inc. (OTCQX: CWBHF) is the market leader in the production and distribution of innovative hemp-based cannabidiol ("CBD") wellness products. Charlotte's Web Holdings, Inc. recently reported its 2018 harvested hemp results. The Company reported more than a 10 times growth in harvested hemp compared to its 2017 grow season. The high-quality 100% U.S.-grown hemp will be processed through proprietary extraction methods to create whole plant hemp extract that will be used in Charlotte's Web products for sale in 2019 and 2020. "Charlotte's Web is one of only a few hemp CBD producers capable of supplying large volumes of high-quality hemp extract from its own supply chain that can meet significantly increasing market demand," said Hess Moallem, President and Chief Executive Officer of Charlotte's Web. "As the category and brand leader, our goal is to increase our market share and with this bountiful harvest we are able to satisfy our customer demands for 2019 and beyond. This incredible harvest ensures we can continue to produce our high-quality human nutrition products without being subject to constantly fluctuating market prices as is common with third-party sourced raw material. This allows us to have better control and predictability over our cost of goods sold and thereby our gross margins. In addition, these harvest levels will allow us to explore opportunities to supply future partners with our proprietary hemp extracts."
Canopy Rivers Inc. (OTC: CNPOF) is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers Inc. recently announced it has completed an equity investment in 10663522 Canada Inc., or "Herbert", a unique brand platform that focuses on the adult-use cannabis beverage and edibles market. Canopy Rivers subscribed for CAD 1,500,000 of preferred shares in Herbert, and received incremental warrants entitling the Company to increase its economic interest in Herbert under certain circumstances, as well as other governance-related rights. "Herbert represents an opportunity for Canopy Rivers to be invested at a very early stage in a company focused on the adult-use cannabis beverage and edible product segment," said Narbe Alexandrian, President of Canopy Rivers. "In the US, cannabis-infused beverages have emerged as a high-growth segment within the ingestibles category, and include a variety of products in both THC- and CBD-dominant formats. In Canada, we expect similar growth beyond dried flower and oils, into food and beverage. Canopy Rivers believes that Herbert, equipped with existing R&D, marketing and manufacturing expertise, has the ability to enter this market quickly and achieve success in creating widely appealing THC-infused beverages and edibles under this new standalone brand."
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