Rapid Expansion into Malls for New Wave of Hemp-Derived Wellness Products
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New York, NY – June 11, 2019 – Cannabis’ mainstream appeal continues to grow, Wall Street has taken notice of the marijuana industry’s potential for quintupling, at minimum, in worldwide cannabis sales through 2029. Much of the increase in appeal is coming through the availability of cannabidiol (CBD) products, namely in the retail space. Major retailers and retail property owners are opening their doors to selling hemp-derived products from companies including Green Growth Brands (CSE:GGB) (OTC:GGBXF), Green Thumb Industries Inc. (OTC:GTBIF) (CSE:GTII), iAnthus Capital Holdings, Inc. (OTC:ITHUF) (CSE:IAN), Curaleaf Holdings, Inc. (OTC:CURLF) (CSE:CURA) and MedMen Enterprises Inc. (OTC:MMNFF) (CSE:MMEN).
Leading the charge into malls across the United States is retail-oriented Green Growth Brands (CSE:GGB) (OTC:GGBXF) who just announced another major mall deal with prominent mall operator Brookfield Property Partners. Through the deal, the company’s Seventh Sense Botanical Therapy brand of CBD-infused products will be sold in GGB-owned stores starting with over 70 prime shop locations in Brookfield’s malls—and is in negotiations for additional stores to come.
The deal follows up a series of other mall and retail arrangements from Green Growth Brands and others, such as Tilray and iAnthus, including GGB’s previous deal with another mall magnate, Simon Property Group.
Key to mainstream acceptance is the surging popularity of CBD over its psychoactive cannabinoid cousin, THC. Since the green light to grow hemp was given late in 2018 with the approval of the US Farm Bill, expect more CBD-infused products to hit retail shelves everywhere.
As of late 2018, market research firm The Brightfield Group published a market overview and analysis on hemp-derived CBD. The report predicted the market would annually grow by 147%, from $591 million in 2018 to an estimated $22 billion by 2022.
Green Growth’s CBD products appear now in 10 Abercrombie & Fitch stores in Massachusetts, California, Colorado, and Nevada, and even more impressively in 96 US-based DSW stores—for a whopping 54,960 units.
Not to be outdone in terms of retail footprints, Curaleaf Holdings signed a deal with pharmacy giant, CVS to sell its own non-intoxicating hemp products in more than 800 CVS stores.
On the more ritzy side of the retail scene, Green Thumb Industries has broken through into the upper echelon through a deal made with Barneys New York. Through the acquisition of premium brand Beboe, Green Thumb products will be featured in the new locations for the Barneys version of a dispensary, titled “The High End”.
Perhaps cornering the mid-range market, are cannabis retail trendsetters MedMen Enterprises, who recently expanded their footprint in California. Dubbed the “Apple Store of pot”, MedMen retail locations are found in prominent locations in Los Angeles, Las Vegas, and New York.
The Rise of Marijuana in Malls
The bulk of Green Growth Brands (GGB-GGBXF) CEO Peter Horvath’s career successes have come inside of malls across the United States and around the world. The retail expert built a reputation while serving in C-level positions at several of the biggest names found in nearly every major mall—including with American Eagle Outfitters, Victoria’s Secret, Designer Brands and others.
Now with GGB, he’s parlaying his expertise both with the company’s main dispensary chain The+Source, and a chain of stores and kiosks for the Seventh Sense Botanical Therapy brand.
Previously in an interview with BNN Bloomberg, Horvath boldly stated, “There’ll be 100 million footsteps that will be exposed to CBD products by the end of the year.”
Already, the company has secured deals with two of the continent’s leading mall operators, Simon Property Group Inc. and more recently with Brookfield Property Partners.
“Brookfield Properties operates some of the most exciting and visited malls in the country, and we are thrilled to introduce our CBD shops to their centers,” said Peter Horvath, CEO of Green Growth Brands. “We know that consumers prefer to buy personal care and beauty products from physical stores, and this partnership will allow us access to millions of consumers.”
The benefits are mutual for both parties. Green Growth Brands gains access to the properties of one of the world’s largest investors in real estate. Brookfield, in turn, gains a growing brand, run by a team of experts familiar with mall spaces and how to best capitalize on foot traffic.
“Curation of our shopping centers is fundamental to our ongoing evolution,” said Sandeep Mathrani, CEO of Brookfield Properties’ retail group and Vice Chairman of Brookfield Property Group. “It is our job to bring in retail offerings and experiences that today’s consumer desires and this includes GGB’s CBD products. GGB is at the forefront of this trend and we are pleased they will expand their reach within our portfolio.”
Along with the rollout of shops under the Seventh Sense Botanical Therapy brand, GGB is also introducing its new prestige brand, Green Lily and 4 locations will open in the near future at Brookfield shopping centers.
The launches coincide with a deal with another mall giant, Simon Property Group. The strategy is to open brand-specific kiosks and stores in malls across the USA. The kiosk/store rollout will take place in 95 shopping malls, in 108 locations, and will offer approximately 40 different CBD-infused topical beauty products that will sell for between US$19-$29 per item.
Beyond just Brookfield and SPG, GGB products will be found in other malls as well, through both Abercrombie & Fitch and Designer Brands stores. These products will include body scrubs, bath bombs, cleansing oils, lotions and lip balms.
By 2020, the company aims to open 450 CBD-focused kiosks in prime mall locations within high-traffic, desirable sections of each mall. Through this strategy, the company projects a 2021 revenue of $120 million across 450 mall kiosks with EBITDA of 32%—an EBITDA per kiosk of $86,400.
Other Players Driving the CBD Retail Revolution
After getting its foot in the door in the new “High End” stores from Barneys New York, Green Thumb Industries Inc. (OTCQX:GTBIF) (CSE:GTII) has moved forward on its own Rise-branded locations. Having recently launched its 20th Rise store (its third in Florida), there’s no official word yet on whether or not the Beboe line of CBD-infused skincare products will be available in all of the companies locations and distribution points in Illinois, Maryland, California, Pennsylvania, and Nevada.
Soon after a $14M acquisition in March, iAnthus Capital Holdings, Inc. (OTCQX:ITHUF) (CSE:IAN) took over CBD For Life, a national brand of CBD products. Shortly after the deal was completed, they completed a deal with Urban Outfitters to sell CBD For Life in tow of its California stores and four of its New York store.
Also in March, Curaleaf Holdings, Inc. (OTCQX:CURLF) (CSE:CURA) announced a deal with CVS Health to sell its lotions and transdermal patches in 10 states, and more than 800 stores. The company is also looking to break into the lucrative pet supply market, with the launch of Bido, hemp-based CBD products for pets.
Perhaps the most unique CBD product being sold is CBD-infused PMS suppositories from Foria. Unlike the many topical CBD-infused menstrual pain-relief creams on the market, these items deliver 60mg of THC and 10mg of CBD in a way that more effectively targets inflammation closer to the source, and are sold for $20 a piece at the MedMen Enterprises Inc. (OTCQX:MMNFF) (CSE:MMEN) location in West Hollywood. MedMen also offers a wide range of CBD products to its customers, including pain creams, gummies, drops, mints, sprays, and vape pens.
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