Top Cannabis Firms Waste No Time Jumping Into $1.8 Billion Massachusetts Marijuana Market
New York NY – December 11, 2018 – Last month, Massachusetts became the latest to join the ranks of US states now legally selling recreational cannabis. While legalization in the state of Massachusetts was officially declared back in July this year, the first licensed dispensaries in the state opened their doors for recreational sale on November 20th. With an estimated $1.8 billion industry at stake in the New England state, companies are already heading east to establish themselves in newly legal markets, including Green Growth Brands (CSE:GGB), Canopy Growth Corporation (CSE:WEED) (NYSE:CGC), Acreage Holdings Inc. (CSE:ACRG) (OTC:ACRZF), Green Thumb Industries (CSE:GTII) (OTC:GTBIF), and Harvest Health & Recreation (CSE:HARV) (OTC:HTHHF).
Already have Massachusetts retailers begun sales, with Northampton Mayor David Narkewicz becoming the very first customer for one of the first two recreational dispensaries in the state.
Narkewicz’s jurisdiction quickly became the center of attention of a significant acquisition, after retail experts, Green Growth Brands (CSE: GGB) entered the Northampton market with a splash. Through the acquisition of membership interests in Northampton-based Just Healthy LLC, Green Growth Brands (CNQ:GGB.CN) picked up the rights to up to three marijuana dispensaries, as well as cultivation and production licenses in the state.
“We are excited at the prospect of competing in one of the most lucrative cannabis markets in the United States,” said Green Growth Brands (CSE: GGB) CEO Peter Horvath. “If you look at our track record, you can see that we have the product development and marketing expertise to outperform in retail, and now we have the distribution channels to bring a superior cannabis shopping experience to the people of Massachusetts.”
With the proximity to a large student population in nearby Amherst, Green Growth Brands (CSE: GGB) plans to center its entry into the Northampton market around creating a footprint as the go-to cannabis retail location in Massachusetts.
The company has all the tools to achieve this, as Horvath’s personal retail experience far exceeds anyone else in the cannabis space. He’s held C-level tenures at the helms of Victoria’s Secret, American Eagle Outfitters, DSW and Limited Brands. His team is rounded out with fellow retail leaders who join him in his vision of reinventing the cannabis retail experience.
“Not only are we now able to operate in Massachusetts, but we are able to do it through the acquisition of licenses and rights that give us almost turnkey vertical integration,” continued Horvath. “When we look at other transactions of this nature, in this state and elsewhere in the U.S., we can say that we are very happy with the terms of the deal and with our relationship with Just Healthy’s management team.”
A New Retail Movement Begins
The Commonwealth of Massachusetts legalized the sale of cannabis for recreational use effective July 1st, 2018 – but sales have just begun as the first licensed dispensaries opened their doors this November 20th. When it matures, the state’s cannabis market is expected to generate up to US$1.8 billion in annual marijuana sales.
According to Massachusetts’ Cannabis Control Commission, the state’s two recreational dispensaries – Cultivate (in Leicester) and New England Treatment Access (in Northampton) have seen $4.8 million in sales since they opened for legal recreational pot sales in late November.
In an effort to capture a healthy portion of this new market, companies such as Green Growth Brands (CSE: GGB) is making the move early on.
As part of the Just Healthy deal, Green Growth Brands (CSE: GGB) also picked up a series of assets beyond the previously mentioned licenses. These included all grow equipment and supplies, all production equipment and supplies, the assumption of all leases, intellectual property owned by Just Healthy and all other assets necessary to operate its vertically integrated operations.
The acquisition was just another tranche of Green Growth Brands’ (CSE: GGB) aggressive expansion plans after raising CAD$140 million prior to its recent RTO. The company has stormed out of the gate, zeroing in on establishing authentic brands and innovative stores.
Prior to the RTO, there was much excitement over the possibilities of a fully-qualified retail team entering the sector. In an interview with Green Growth Brands’ CEO Peter Horvath, CNBC’s Mad Money host Jim Cramer was most excited about Horvath’s retail experience, stating, “This is the first CEO that’s going into retail that’s actually been in retail.”
Before the show went to commercial, Cramer excitedly added, “I cannot wait until you come public.”
Sadly, up until companies such as Green Growth Brands (CSE: GGB) entered the scene, customers have found the cannabis shopping experience to be fairly lacking. The excuse of the sector’s newness is wearing thin, and finally expert help is on the way, both for buyers and producers/suppliers.
“The team we’ve put together is arguably one of the top retail teams in any market, let alone cannabis,” Horvath told Jim Cramer in the October TV interview.
Beyond the team itself, Horvath has put together quite the war chest to dispense on acquisitions such as the Just Healthy deal. He was also instrumental in raising CAD$85 million in the Green Growth Brands (CSE: GGB) private placement, which far exceeded the original target of CAD$55 million.
Moving forward, the Green Growth Brands (CSE: GGB) game plan doesn’t just begin and end with cannabis retail stores. The company is also aggressively moving into the cannabidiol (CBD) space, which is pegged to potentially reach $22 billion by 2022.
Due to its non-intoxicating nature, the mainstream potential for CBD products is quite high— even for those uncomfortable the other prominent (and psychoactive) cannabinoid, THC.
Green Growth Brands (CSE: GGB) has already rolled out its a unique line of CBD-infused beauty products, dubbed “Seventh Sense”, which will be sold in regular stores including drug stores, grocery stores, and other retail stores. Backed by management’s experience and extensive retail connections, getting products on mainstream shelves should be a smooth process.
Something For Everyone
Across all of the offerings from Green Growth Brands (CSE: GGB), there appears to be something for everyone—Including an outdoorsy/active living niche of its CAMP brand, a self-care botanical therapy products called Seventh Sense, a surf culture Meri + Jayne brand, feminine targeted Green Lily botanical products, the newly-acquired Just Healthy line, and its flagship dispensary subsidiary called The Source.
Through a unique branding strategy Green Growth Brands (CSE:GGB) is choosing to move away from traditional customer demographics—Instead choosing to strategize its segmenting by emotion. For example, Meri + Jayne focuses on combining the feeling of fun and well-being, while CAMP focuses on the experience of being at one with nature.
Among the company’s assets so far, there is perhaps the greatest potential for further expansions through water solubility. Through its state-of-the-art, patent-pending developer brand Xanthic Biopharma Green Growth Brands (CSE:GGB) controls a proprietary process to make THC and CBD water soluble. With water-soluble cannabinoids at the ready, the company gains a seemingly limitless potential to develop new products, from beauty products to edibles and drinks.
Massachusetts Growing The Eastern Market
Through a strategic partnership with Compassionate Organics, Green Thumb Industries (CSE:GTII) (OTCQX:GTBIF) is moving forward to operationalize a Boston-based medical marijuana dispensary on historic Newbury Street. Green Thumb is vertically integrated, with a primary focus of being a national cannabis consumer packaged goods company. The Chicago-based company owns and operates a national chain of retail cannabis stores called RISETM dispensaries. Green Thumb has eight manufacturing facilities and licenses for 60 retail locations across eight highly-regulated US markets.
Getting past the regulatory requirements can prove difficult. Despite publicly stating that it will not sell its products in the US until they’re federally legal, Canopy Growth Corporation (CSE:WEED) (NYSE:CGC) is intently keeping its eye on all US markets. The cannabis giant recently announced it was buying pot research company Ebbu in a deal worth $25 million. The deal with could include an additional $75 million in cash and shares, if certain scientific-related milestones are achieved within two years. Canopy plans to employ Ebbu’s assets and personnel to conduct R&D, but will not engage in production nor sales until the US lifts prohibition federally.
Arizona-based Harvest Health & Recreation (CSE:HARV) (OTC:HTHHF) is a vertically integrated cannabis company with permits and licenses in 10 US states—including local approvals in Massachusetts. The company recently acquired CBx Enterprises, whose technology is utilized by Evolab, CBx Sciences and CBx Essentials. CBx’s CO2 extraction abilities help to give Harvest further abilities to access patients and consumers across the country.
In another newly legalized state, Michigan, Acreage Holdings Inc. (CSE:ACRG) (OTC:ACRZF) recently announced it would acquire a Michigan real estate portfolio ahead of the state’s official cannabis licensing. Through an agreement to acquire the assets of Michigan-based Blue Tire Holdings, LLC, Acreage Holdings now has a foothold to bring cannabis products to Michigan residents throughout the state. The move into Michigan is strategic on behalf of Acreage Holdings, as the state is one of the highest per-capita cannabis markets in the US.
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