Cannabis companies are positioning themselves in the retail markets with an acquisition strategy targeting premier retail brands, according to a recently released snapshot from investor news resource Investorideas.com on the future of the retail cannabis market and companies competing for market share. The following is a roundup of Investorideas.com’s findings.
The global cannabis market
There are an estimated 272 million cannabis consumers globally, according to New Frontier Data, equivalent to 4% of the world’s population. These consumers collectively spend approximately $356 billion each year on cannabis across legal and illicit markets.
Canopy Growth’s Hiku Brands investment
In September 2018, Canopy Growth Corp. announced the closing of the acquisition of Hiku Brands to strengthen its retail and brand portfolio.
“Leaves begin to turn. Canopy adds bold new brands. Ready for retail,” comments Bruce Linton, chairman and co-CEO, Canopy Growth. “The Tweed and Vert brands we’ve built are now complemented with the likes of DOJA, Tokyo Smoke, Maitri, and Van der Pop, placing the taste-makers of tomorrow’s cannabis industry on the same team.”
In October 2018, Canopy announced the launch of a new brand for the recreational market in Canada, LBS. The LBS brand slogan—Worth Its Weight In Gold—is a reference to the care and quality put into the brand’s products and also to its roots in California, the Golden State.
Talking about the brand, Mark Zekulin, president and co-CEO, says, “Canopy Growth was founded to pursue a ‘house of brands’ strategy in order to be inclusive across multiple demographics and across multiple cannabis markets.”
Green Growth Brands’ premier plans
Using a similar strategy, Green Growth Brands Inc. plans to grow the world’s premier cannabis retailing business. On Jan. 30, the company announced it executed an arm’s length definitive agreement to acquire control of ZLJT LLC and Arizona Natural Pain Solutions Inc., collectively referred to as “Desert Rose.” Desert Rose holds a license for a vertically-integrated operation in Arizona, including retail, cultivation, and infusion (kitchen).
“We were very impressed with the quality of the operations held by Arizona Natural Pain Solutions,” says Green Growth Brands CEO. Peter Horvath. “At Desert Rose, the team is dedicated to providing their customers with medical marijuana products that are pure, safe, and efficient, while striving to keep their costs as affordable as possible.”
According to the website, “Green Growth Brands expects to dominate the cannabis and CBD market with a portfolio of emotion-driven brands that people love. Led by Peter Horvath, the GGB team is full of retail and consumer packaged goods experts with decades of experience building successful brands.”
Aurora Cannabis’ High Tide acquisition
In December 2018, Aurora Cannabis Inc. announced that it entered into an agreement to invest $10 million in High Tide Inc., a privately held, Alberta-based, retail-focused cannabis and lifestyle accessories company.
High Tide is developing an expanding network across Canada of cannabis and cannabis accessory retail stores, as well as manufacturing and distributing branded cannabis accessories which positions it exceptionally well to capitalize on the Canadian adult-use cannabis industry. Through its two wholesale businesses, Famous Brandz and RGR Canada and the 19 existing Smoker’s Corner retail locations, High Tide serves more than 170,000 retail customers per year.
Curaleaf Holdings leads in the US
Getting it right when it comes to retail and branding for the cannabis sector is Curaleaf Holdings. Curaleaf is the largest national retail dispensary brand in the US, as well as a premium mainstream cannabis brand available in multiple states and product formats. The company’s targeted retail channels include E-commerce (DTC), e-retailers, the natural products/wellness sections of grocery stores and mass merchandisers, high-end spas, pet stores, vape shops, and dispensaries.