With demand outstripping supply, successful cannabis companies are following smart core strategies and reporting strong revenues.
The cannabis, hemp and CBD sector is experiencing a period of huge expansion. With medical cannabis now legal in 60% of U.S. states, recreational cannabis legal in many states as well as Canada, and hemp production legalized on a federal level, North America has become home to a thriving industry. What was relegated to illegal markets and fringe cases only 20 years ago is now the source of an economic boom.
In this brave new world of legal business, cannabis companies are looking for ways to maximize their profitability and ensure a strong position as the market keeps expanding. So what are the strategies bringing success for the growing cannabis companies, both big and small? And how are those strategies contributing to the development of the sector?
Acquisitions and Subsidiaries
Increasing production space is the only way for the industry as a whole to address supply shortages. But for individual companies, other options to increase their presence in the sector are available.
The past two years have seen a huge surge in acquisitions in the cannabis sector. These acquisitions have allowed companies to grow in size, resulting in increased supplies and sales. Though it doesn't directly lead to an increase in overall supply, the benefits in scale and efficiency mean that, in the long term, this coming together of companies could lead to better supplies.
For Golden Developing Solutions, its most important recent acquisition has been Infusionz LLC, a manufacturer of CBD products. Completed in March, the acquisition gave Golden Developing Solutions control not just of Infusionz's production base but also of its established brands and retail links. Building relationships with customers is a tricky business in an industry where licensing limits marketing options and where brand allegiances are just starting to form. Acquiring a brand for which demand already outstrips supply is invaluable.
This is a common pattern for mergers and acquisitions in the cannabis and CBD space. Though brands may be relatively small scale compared with other industries, they are often not folded into existing lines on acquisition. The benefits of experimenting with new brands and tapping into their customer base outweigh what might be gained by merging output to supply a smaller number of brands.
As hemp production increases, Californian legislators have extended the duration of thousands of cannabis cultivation licenses to support the state's thriving
The cannabis sector continues its steady shift toward big business, big money and a focus on the value add of immaterial assets. The image of the cannabis
SOL Global announced that it has purchased an additional 16,766,250 common shares ("Heavenly Shares") in the capital of HeavenlyRx Ltd. ("Heavenly Rx" or
According to a new report from The Business Research Company, the global cannabis products market was valued at about $12.7 billion in 2018, and it is
Grove Group Management, a next-generation cannabis industry investment, and management company announced a major investment in two hemp and CBD manufacturing
Blaze ERP is an enterprise resource planning platform for the legal cannabis industry, they have received $1 million in Seed funding from Act One