CannabisNewsWire
Editorial Coverage: Skepticism has been squashed and all
apprehension eliminated. There’s no longer any question about
either the viability or the profitability of the newly respected
cannabis sector. Huge money has already been made in the nascent
industry, and the only real question left is: where’s the next
super nova?
Quarter-over-quarter sales growth is one of the indicators used
to target explosive upside potential. Similar growth patterns were
exhibited by many of the cannabis behemoths prior to parabolic
price increases. In what may be an equally telling indicator,
Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF) (WLDFF
Profile) revenues have now increased 11 consecutive
quarters, quarter on quarter, ever since the company started
selling its hemp-based CBD products. Similar quarterly sales spikes
and strategic acquisitions foreshadowed dramatic price increases in
some of the largest names in the cannabis universe. Last October
Medmen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF)
soared 60% in one week when the company announced a deal to buy
PharmCann. Florida-based Trulieve Cannabis Corp. (OTC:
TCNNF) (CSE: TRUL) went public last September through a
reverse merger in Canada and soared 200% after a strong 2018 Q2.
Already up big on Canadian exchanges, Cronos Group Inc.
(NASDAQ: CRON) (TSX: CRON) became the first pure-play
marijuana stock to list on NASDAQ around $7 and just bounced off
$23 a share. Last year, Tilray Inc. (NASDAQ: TLRY)
became the first cannabis company to IPO on the NASDAQ at $17 per
share and by September skyrocketed to $300. Despite price surges
and fluctuations in the big cannabis names, there’s bound to be
more money made in the sector; the run is far from over.
- Cannabis run is far from over, new winners emerging
- Branding, marketing and retail reach signals of success
- Quarter-over-quarter revenue increase helps identify future
potential
To view an infographic of this editorial, click here.
Good Times Have Just Begun
Legal cannabis is a recent global phenomenon, and the emergent
market appears to be nowhere near reaching its potential. The
worldwide legal marijuana market, valued at just $9.3 billion in
2016, is expected to blow past $146 billion
within the next six years.
According to a United Nations report, cannabis is the most
widely consumed drug on the planet. Approximately 270 million
global consumers use cannabis, equivalent to about 4% of the
world’s population and a mere pittance in market penetration. As
marijuana muscles into the mainstream, usage among all age groups
is on the upswing. However, among the most coveted
18-to-34-year-old demographic, there’s an explosion of acceptance
as they mature in a world where cannabis is common.
Millennials are about three times and Gen Z about four times
more likely
to use cannabis than aging Boomers. Forward-leaning cannabis
companies are full throttle in product and brand development to
corral this coveted demographic and capture market share, now and
for decades to come. As public perceptions change and legalization
expands, the number of users is certain to skyrocket in an
essentially untapped market. A global transition is underway, and
the good times for cannabis have just begun. Growth trajectory is
virtually vertical, presenting a once-in-a-generation investment
opportunity.
Retail Reach
Founded in 2012 as a private company, Wildflower
Brands Inc. (CSE: SUN) (OTCQB: WLDFF) went public in
2014 and has been on a tear ever since. Wildflower is an integrated
health-and-wellness company creating distinct brands that
incorporate the synergistic effects of plants and their extracts.
The company’s latest quarterly sales set records, up 78% over
the previous quarter, validating corporate strategy, the popularity
of its products, and the continued expansion of market share.
Intent on supercharging revenue and earnings even further,
Wildflower is about to finalize the acquisition of a preeminent
cannabis retailer in Vancouver that also owns multiple cannabis
licenses.
Wildflower’s latest press
release is further evidence of the company’s rapid growth and
global reach. The company reported third-quarter sales were up by
78% over the second quarter, the 11th consecutive quarter of
revenue growth, since Wildflower Brands began selling products. On
top of these stellar results the company is further expanding its
retail footprint and product distribution with the accretive
acquisition of Vancouver-based City Cannabis Corp.
City Cannabis is a premier cannabis retailer holding two of the
three City of Vancouver licenses to sell cannabis and os the only
company with multiple licenses in British Columbia. With margins of
50%, City Cannabis had revenues of $1.8 million for the reporting
period that began with the opening of its two stores in early
January. The combined quarterly revenues of Wildflower Brands and
City Cannabis equates to an impressive $4.3 million. Wildflower
expects to close on the City Cannabis deal before the end of June,
and the acquisition will immediately be accretive to Wildflower’s
earnings upon closing.
Bringing City Cannabis and Wildflower together will result in
revenue operations in three U.S. states and two Canadian provinces
with a combined North American target market of more than 75
million people. The positive net income generated by City Cannabis
comes from just two operating properties, even though the company
holds an additional seven leases at various stages of permitting
approvals.
Commenting on the financials, Wildflower CEO William MacLean
stated, “We are pleased with the financial results of both
Wildflower and City Cannabis. Sales through every Wildflower
distribution channel are up, and sales at City’s licensed retail
outlets continue to grow month over month. The positive net income
is particularly impressive with City Cannabis carrying a total of
nine leases, which are at various stages of the permitting
process.”
Grow, Grow, Grow
Already an established presence in California, Wildflower owns
14 cannabis licenses for recreational and medical cannabis
cultivation, manufacturing, retail distribution and delivery. The
company’s expansion into Canada with the acquisition of City
Cannabis bolsters Wildflower’s global growth strategy, which is
includes strategic distribution deals already in place in the
European
Union and South
Africa. In addition to capturing revenues from retail
operations, the City acquisition gives Wildflower another channel
to market its enormously popular products and launch into the
over-the-counter market with its CBD formulations and
accessories.
Wildflower continues to capture ever-greater market share with
innovation, retail expansion and a growing family of popular
brands. The company’s strategic partnerships, acquisitions and
organic growth are all bolstered by its marketing genius to lock in
more 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.
The company has also employed an innovative pop-up store
approach in SoHo, New York, to introduce Wildflower Wellness
products. Wildflower identified a compatible high-profile retail
venue and struck a deal with the outlet, then marketed its products
in the upscale establishment for a limited time period, raising
market uptake and visibility.
Big Names
Medmen Enterprises Inc. (CSE: MMEN) (OTCQX:
MMNFF) is a cannabis retailer with operations across the
United States and flagship stores in Los Angeles, Las Vegas and New
York. Company objectives are to capitalize on first-mover advantage
by opening stores in top markets and building brand awareness and
customer acquisition. The company is also intent on expanding
retail footprint and creating an omnichannel consumer
experience.
Trulieve Cannabis Corp (OTC: TCNNF) (CSE: TRUL)
is a vertically integrated, seed-to-sale company and is the first
and largest fully licensed medical-cannabis company in Florida.
Trulieve cultivates and produces all of its products in-house and
distributes those products to Trulieve-branded stores
(dispensaries) throughout the state, as well as directly to
patients via home delivery. Trulieve also operates in California,
Massachusetts and Connecticut.
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) is
a global cannabinoid company with international production and
distribution across five continents. Cronos Group is committed to
building disruptive intellectual property by advancing cannabis
research, technology and product development. The company is
committed to responsibly elevate the consumer experience and is
building an iconic brand portfolio.
Tilray Inc. (NASDAQ: TLRY) is a global pioneer
in the research, cultivation, production and distribution of
cannabis and cannabinoids. The company currently serves tens of
thousands of patients and consumers in 12 countries spanning 5
continents. Tilray was the first licensed producer of medical
cannabis in the world to have its facility Good Manufacturing
Practices (GMP) certified in accordance with European Medicine
Agency (EMA) standards.
The cannabis markets have already produced some amazing profits,
but all indications are the industry is only at the beginning of an
amazing ascent. There’s little doubt that a plethora of new winners
will be created in the burgeoning sector. When searching for the
next super nova, Wildflower Brands is certainly one to watch.
For more information on Wildflower Brands, visit Wildflower
Brands Inc. (CSE: SUN) (OTCQB: WLDFF)
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