“No-Touch” Approach Reduces Risk as Public Companies Tap Explosive Growth of Cannabis Industry
March 15 2017 - 9:30AM
InvestorWire
New York, New York (NetworkNewsWire) – The marijuana industry is
the new investing frontier. As a result of last November’s
elections, eight states and the District of Columbia now allow the
recreational use of marijuana, while another 28 states permit its
use for medicinal purposes. In what has been touted as the
fastest-growing industry in the U.S., investment opportunities in
the cannabis space appear boundless. Companies like
Singlepoint, Inc. (SING) (SING
Profile), American Cannabis Company Inc. (AMMJ),
General Cannabis Corp. (CANN), The Scotts Miracle-Gro
Company (SMG) and Terra Tech Corp. (TRTC)
are all employing a “no-touch” approach to their cannabis business
models. By creating business models that indirectly deal with
marijuana plants, these companies reduce or eliminate the risk of
falling foul of changing federal laws and restrictions.
According to ArcView Market Research, regulated marijuana sales
in North America reached $6.9 billion in 2016, an increase of 30
percent compared to 2015. Sales are expected to continue their pace
and reach $21.6 billion by the year 2021, representing CAGR of 26
percent. New Frontier Data projects growth in the medical cannabis
market at 12 percent CAGR through 2025, growing from $4.7 billion
in 2016 to an estimated $13.3 billion in 2025. During the same
period, adult use sales will experience growth of 21 percent CAGR,
rising from $1.9 billion to $10.9 billion.
Despite the easing of prohibition and the rosy prospects for the
industry, cannabis remains a Schedule 1 substance under the
Controlled Substances Act, a place it occupies alongside heroin,
lysergic acid diethylamide (LSD), and ecstasy. The Drug Enforcement
Administration (DEA) defines Schedule 1 drugs as those with a high
potential for abuse and the potential to create severe
psychological and/or physical dependence.
In light of the industry uncertainty under the Trump
Administration – which has indicated that states with recreational
marijuana will see “greater enforcement” of federal laws -
marijuana businesses like Singlepoint, Inc. (SING) (SING
Profile), which pursues a no-touch strategy when it
comes to dealing with marijuana plants, are in a stronger position
to combat legal challenges. After all, selling a spade is not the
same thing as digging for coal.
Singlepoint, Inc. (SING), through its SingleSeed
Payments subsidiary, years ago set up a strategy to offer
payment solutions to the cannabis industry. Its mobile marketing
and payment solutions include cashless ATM, Pay-by-Text™ and text
message marketing. The plan is to develop a marketing program
specifically designed for cannabis accounts, enabling consumers to
use their credit and debit cards to make payments for cannabis
purchases.
In another hands-off strategy, SinglePoint has acquired
(http://nnw.fm/g8OO3) an interest in Jacksam
Corp., dba Convectium, the profitable, California-based developer
of the 710Shark and 710Seal system. This innovative oil filling
system can fill and package more than 100 cartridges or disposable
vape pens in 30 seconds, making it the fastest and only filling and
sealing system in the industry.
Convectium also offers a line of B2C products, which SinglePoint
plans to sell online through its SingleSeed.com subsidiary.
Convectium expects to record full-year 2017 revenues of $3.5
million, an increase of 150% compared to revenue of $1.4 million
for full-year 2016, and, in the first quarter of 2017, Convectium
has already “significantly surpassed” its first-quarter sales in
2016.
In a press release, SinglePoint noted that its interest in
Convectium is one of several acquisitions the company plans to make
under its no-touch strategy. Singlepoint’s market cap is about $33
million, and it currently trades around $0.06 per share.
Another outfit mitigating risk by operating in the marijuana
business-to-business (B2B) space is American Cannabis
Company (AMMJ). Earlier this month, the company announced
that it had secured a second client in Florida. The new client
wants to create a cannabis-business chain and plans to open a
cultivation operation and multiple dispensary locations. AMMJ
currently trades at around $0.69 per share. The company has a
market cap of about $35 million.
General Cannabis (CANN) provides real estate,
consulting, security, and financing services, as well as
distributes infrastructure products, to dispensaries and facilities
that grow marijuana. The company may double its revenues in 2016.
It is expecting to record over $3 million in sales, compared to
2015 revenues of $1.76 million. The company has a market cap of
about $35 million. Its stock currently trades around $2.26 per
share.
The hands-off approach is one that The Scotts
Miracle-Gro Company (SMG) has been employing for some
time. In 2015, the company acquired a number of hydroponics
companies as part of a strategy to participate in the cannabis
market. A Forbes (http://nnw.fm/Cxzl8) story shows that the strategy is
paying off. In just over a year after acquisition, its hydroponics
business grew by 20 percent, roughly four times the rate of the
rest of the company. The Scotts Miracle-Gro Company has a market
cap of over $5.5 billion and currently trades between $90 and
$100.
The operations of Terra Tech (TRTC) are also
likely to escape the most unwelcome federal attention by focusing
on medical marijuana. The company recently announced plans to set
up a new cultivation facility in Oakland, California, which will
produce about one metric ton of premium grade cannabis annually.
The company has a market cap of about $156 million, and its stock
currently trades at around $0.27.
For more information on Singlepoint, Inc. (SING) please visit:
Singlepoint,
Inc. (SING)
About NetworkNewsWire
NetworkNewsWire (NNW) provides news aggregation and syndication,
enhanced press release services and a full array of social
communication solutions. As a multifaceted financial news and
distribution company with an extensive team of contributing
journalists and writers, NNW is uniquely positioned to best serve
private and public companies that desire to reach a wide audience
of investors, consumers, journalists and the general public. NNW
has an ever-growing distribution network of more than 5,000 key
syndication outlets across the country. By cutting through the
overload of information in today’s market, NNW brings its clients
unparalleled visibility, recognition and brand awareness. NNW is
where news, content and information converge.
Please see full disclaimers on the NetworkNewsWire website
applicable to all content provided by NNW, wherever published or
re-published: http://NNW.fm/Disclaimer
Source:
NetworkNewsWire
Contact:
NetworkNewsWire (NNW)
New York, New York
www.NetworkNewsWire.com
212.418.1217 Office
Editor@NetworkNewsWire.com
TREES (QB) (USOTC:CANN)
Historical Stock Chart
From Aug 2024 to Sep 2024
TREES (QB) (USOTC:CANN)
Historical Stock Chart
From Sep 2023 to Sep 2024