CannabisNewsWire
Editorial Coverage: As the cannabis industry expands, companies
are eyeing strategic opportunities in the sector designed to help
them establish a foothold in the promising space.
- Cannabis and related products are legal in Canada and an
increasing number of states.
- Businesses have responded with a growing range of diverse
products.
- Companies making the smartest investments, including carefully
selected mergers and acquisitions, are in the best position to
profit.
SinglePoint Inc. (OTCQB: SING) (SING
Profile) has invested in a number of other cannabis
companies to grow its portfolio and leverage its position in the
market. Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX:
SPRWF) just signed of letter of intent with Malta
Enterprises, the economic development agency of Malta.
MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF)
recently wrapped up its previously announced acquisition of
Kannaboost Technology Inc. and CSI Solutions LLC, two vertically
integrated Arizona-based operations. Charlotte’s Web
Holdings Inc. (OTCQX: CWBHF) (CSE: CWEB) reported more
than 10 times growth in harvested hemp compared to its 2017 grow
season. And Curaleaf Holdings Inc. (OTCQX: CURLF) (CSE:
CURA) has signed a definitive agreement to acquire Eureka
Investment Partners LLC.
To view an infographic of this editorial, click here.
A Big Year for Big Investment in Cannabis
In only a few short weeks, this year is shaping up to be an
important year in the cannabis market. The legal groundwork for
industry changes was laid last year, with milestone legislation
being passed in Canada, the United States and elsewhere. With legal
regulations in place, new opportunities for the market to grow and
for companies to make strategic moves within the sector have become
more frequent — and appear to be more profitable.
This upward movement is fueling the ongoing development of two
important trends: The first one is product diversification, as
cannabis companies and the businesses supporting them develop a
wider range of products for an increasingly varied market. The
second one is big investment, as both outside businesses and larger
cannabis companies move to create a presence in the market. Money
is flowing in, making the most of the opportunities that legal and
product changes provide.
A Changing Global Context
This year’s promise is rooted in last year’s significant growth
and impressive forecast. SinglePoint Inc.
(OTCQB: SING), a young tech company that has moved into the
cannabis sector, saw its revenue hit
the $1 million mark. In addition, like many cannabis companies,
the company ended the year with even better things on the horizon,
including a prediction that revenue should dramatically increase
over the next 12 months.
Making such claims in a relatively untried sector may seem bold,
but closer scrutiny reveals why such predictions appear to be
solid.
To begin with, the changing attitude of lawmakers to cannabis
has been crucial to the industry’s forward momentum. The
prohibitory model for managing the drug that has dominated for half
a century is increasingly recognized as not just ineffective but
harmful to public health. As a result, governments are legalizing
cannabis for medical use and are even creating regulated markets
for recreational cannabis. This is especially true in Canada, where
the trade became legal countrywide last October.
For American companies such as SinglePoint, progress has come on
a state-by-state basis. Though the majority of
Americans favor legalization, the federal government has been
slow to follow what appears to be a nationwide attitude. Instead,
individual states have created legal markets, with Michigan
becoming one of the most recent with cannabis legalization taking
place there in December. Two-thirds of U.S. states now allow
medical cannabis, and one in five have legalized its recreational
use; more are expected to follow suit in the near future. This
swing in attitude — and government support — has allowed
SinglePoint to begin investing in cannabis without having to
consider a national cannabis business.
The end of the year saw a significant step towards wider
legalization. Following months of wrangling, the 2018 Farm Bill was
passed making industrial hemp legal on the federal level. This
nonpsychoactive from of cannabis has provided many companies,
including SinglePoint, with an important entry point into the
sector, as the chemical cannabidiol (CBD), which can be derived
from hemp, can be more widely sold than other forms of cannabis.
CBD’s impressive popularity has provided a further boost to the
sector, especially to companies entering the industry with CBD
offerings.
Undoubtedly, the Farm Bill is set to allow cannabis businesses
to grow significantly through hemp and provide a precedent as
federal politicians reconsider the wider cannabis industry.
Product Diversification
Now that companies have identified CBD as a promising step into
the market, they are doing what they do best — finding new ways to
sell their products and services. This has led to a wave of
innovation and an increasingly diverse range of cannabis-based
products.
Two of the biggest areas for innovation are the creation of confectionaries and beauty products. The
former offers a way to consume cannabis without inhaling it. The
latter appears to be a natural fit given the suggested well-being
benefits of CBD and THC, along with the willingness of customers to
try new plant-based beauty products. But innovative companies
aren’t stopping there, with options such as Phyto-Bites, a product SinglePoint distributes on its
website SingleSeed.com, designed to improve the health and
well-being of pets.
Human health and well-being remain a huge driver for innovation
in cannabis. Aware of that, SinglePoint has also been adding health
and wellness products to its sales lines. Its SingleSeed store
recently unveiled a range of
TorusMed Hemp CBD products to its offerings. The new products
include treatments such as Sport Relief Topical Cream, an ointment
designed to provide pain relief for professional and amateur
athletes.
Smart Investing in the Cannabis Sector
The growth of the cannabis sector has not occurred without a few
bumps along the way. Companies are operating in a space that didn’t
even exist 20 years ago, and the sector is evolving quickly, with
the last few years triggering a wave of consolidation. In a
fast-changing market, challenges are expected, and the ability to
meet such challenges successfully is essential to a company’s
success.
The secret to smart investing in this new space is the same as
for any sector: research, understand the businesses being invested
in, identify a plan and execute it. Understanding the specifics of
the cannabis market is critical, and the trend within the industry
most recently has been mergers and acquisitions, as companies such
as SinglePoint have expanded through investment in promising
companies that provide products and services that will complement
and support its strategy.
SinglePoint’s most recent investment has been in
TorusMed, a company developing new ways to optimize CBD output
from hemp and, consequently, increase the profitability of this
piece of the cannabis sector. With the Farm Bill pointing to hemp
creating a new boom in the industry, SinglePoint has used its
understanding of the market to invest in a company that appears to
offer great potential to make the most of this moment.
Moves such as this can put a company in a strong position
heading into what may be the biggest year yet for cannabis. “[This
year] will be a banner year for SinglePoint,” said SinglePoint CEO Greg Lambrecht. “We are equipped
with the proper funding, partners and opportunities to be firing on
all cylinders. We as a team expect to position SingleSeed and
SinglePoint as market leads in the CBD market while continuing to
enable the founders of the companies we have acquired to grow their
businesses. We are well diversified and have large opportunities
across many emerging markets that should enable us to be successful
into 2019 and beyond.”
New Year, Fresh Growth
The move for Supreme Cannabis Company Inc. (TSX: FIRE)
(OTCQX: SPRWF) to partner with Malta
Enterprises is the company’s first step to obtain a Cannabis
Production License in the country. The license would allow Supreme
to produce and process cannabis for medical use within Malta, one
of Europe’s principal commercial entry points, and to export
cannabis for medical use to certain international markets.
MedMen Enterprises Inc.’s (CSE: MMEN) (OTCQX:
MMNFF) acquisition of
Kannaboost Technology and CSI Solutions LLC includes retail
locations in Scottsdale and Tempe, as well as 25,000 square feet of
cultivation and production capacity in Tempe and Phoenix. The
acquisition also includes a 40-percent stake in top-selling brand
K.I.N.D. Concentrates, which is currently distributed in more than
90 percent of Arizona dispensaries.
Charlotte’s Web Holdings Inc. (OTCQX: CWBHF) (CSE:
CWEB) claims the No. 1
position in market share in the hemp CBD market, with its
products sold in 3,680 retail locations as well as on its website.
Charlotte's Web had 300 acres of hemp planted in 2018 compared with
only 70 acres in 2017, resulting in a harvest of 675,000 pounds of
hemp last year. The legalization of hemp in the U.S. should open
the doors for Charlotte's Web to expand its retail opportunities
with national chains.
Curaleaf Holdings Inc.’s (OTCQX: CURLF) (CSE:
CURA) definitive agreement to acquire Eureka Investment
Partners will provide access to California's wholesale market
through an existing 110,000-square-foot greenhouse facility in
Salinas, California, with the potential to expand up to 270,000
square feet, which could generate more than 50,000 pounds of dry
flower per year at full scale. Headquartered in Massachusetts,
Curaleaf has a presence in 12 states, owns and operates 42
dispensaries, 12 cultivation sites and 10 processing sites with a
focus on highly populated, limited-license states including
Florida, Massachusetts, New Jersey and New York.
Legal changes are encouraging an increasingly diverse cannabis
market, in which companies that make smart investments are primed
for profit.
For more information on SinglePoint, visit SinglePoint Inc.
(OTCQB: SING)
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