Wednesday, April 24, 2019

The Cannabis Bonanza Has Just Begun

NetworkNewsWire Editorial Coverage: The cannabis industry presents a rare opportunity to profit from spectacular growth 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.
Capturing market share and creating long-term success in this explosive market will require brand recognition and retail reach. 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 looking to grow in the market through other promising ways. Tilray Inc. (NASDAQ: TLRY) recently acquired Natura Naturals Holdings, boosting capacity to supply cannabis products across Canada. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) bought hemp company AgriNextUSA to accelerate entry into key American jurisdictions. Medmen Enterprises Inc. (OTCQX: MMNFF) (CSE: MMEN) announced the purchase of two vertically integrated operations, which include retail locations and 25,000 square feet of cultivation and production capacity. And only two weeks ago, Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) completed the acquisition of Eureka to provide access to California’s wholesale market through a large greenhouse facility.
Market Frenzy
The sweeping growth of the cannabis industry is rooted at least in part from a groundswell of public support that has turned into a tidal wave of acceptance. Fifteen years ago, only a third of Americans supported federal legalization of marijuana. About two-thirds of Americans now support legalization, up from only 54% two years ago. Among adults under age 35, a whopping 85% favor federal legalization. The movement gained so much momentum so fast that the industry is scrambling to keep up. As the cannabis industry and markets mature, acquisition and consolidation deals appear to be all but certain.
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 a relatively new phenomenon, 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. Growth trajectory is virtually vertical. 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.
B.C. Center of Boom
Cannabis demand is even greater north of the border. The industry has been struggling with cannabis supply shortages ever since recreational cannabis was legalized across Canada. The country’s westernmost province, British Columbia, is no exception. The B.C. market registered a little over CA$19 million in legal cannabis sales in 2018, but that number is expected to explode to CA$722 million in annual sales by 2024 — a mind-boggling 37-fold increase over six years.
Pegged to soar nearly 3,700% in the next six years, British Columbia is ground zero for cannabis growth. Headquartered at the epicenter 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 recently 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.”
Born in British Columbia, Wildflower now has a retail reach that extends from Vancouver to Los Angeles and New York. Established in 2012, 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 been on a tear ever since.
Creating a Global Brand
Today Wildflower now markets its distinctive CBD+ products to more than 300 retailers in the health and wellness space 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. footprint currently 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.
The obvious next step 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 more than 300. Wildflower is aggressively expanding both brand recognition and retail reach.
Wildflower continues to capture ever-greater market share with innovation, retail expansion and its growing family of popular brands. The company’s strategic partnerships, acquisitions and organic growth are all bolstered by the company’s marketing genius focused on locking in 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 stop with the stars. To expand exposure into a new target audience, 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.
Wildflower is on a mission to create a global cannabis enterprise. With such rapid expansion of brand recognition and retail distribution, Wildflower is carving out its slice of 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.
Tilray Inc. (NASDAQ: TLRY), a global leader in cannabis research, cultivation and distribution, has announced the closing of a definitive agreement to acquire all of the issued and outstanding securities of Natura Naturals Holdings Inc., the parent company of a licensed cultivator of cannabis. The acquisition boosts the company’s capacity to supply cannabis products across Canada. Natura’s facility will be renamed High Park Gardens and be used as an additional cultivation facility to serve the medical and adult-use market in Canada.
Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) acquired AgriNextUSA. The acquisition will accelerate Canopy Growth’s entry into key American jurisdictions. “The United States is the next stop on Canopy Growth’s desired path to becoming a leading, revenue-generating company focused on all aspects of cannabinoids and their potential,” said Bruce Linton, co-CEO and Chairman of Canopy Growth.
Medmen Enterprises Inc. (OTCQX: MMNFF) (CSE: MMEN) recently purchased two vertically integrated operations, which include both retail locations and 25,000 square feet of cultivation and production capacity. The company paid a combination of cash and stock valued at an aggregate of $33.5 million. With the closing of the acquisitions, MedMen will be licensed for three medical-use cannabis dispensaries in Arizona.
Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE: CURA) completed the acquisition of Eureka, which operates a cultivation facility that is developing three dispensaries across California. Curaleaf has the largest footprint of single-branded retail stores in the United States. “The acquisition of Eureka cements our foundation in California and positions us well in the largest cannabis consumption market in the U.S.,” said Joseph Lusardi, CEO of Curaleaf.
Some have called the cannabis bonanza a once-in-a-generation opportunity and predict that this is simply the start of a decade-long cannabis bull market that’s only just begun. All indications suggest those predictions may be correct.
For more information on Wildflower Brands, visit Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)
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