Tuesday, 31 Mar 2020

Cannabis Industry Leaders Drive Growth With Acquisition Strategies and Territorial Expansion

NEW YORK, September 8, 2017 : Exceeding USD 7.2 billion in 2016, the legal cannabis market is maintaining a rapid expansion rate, according to Forbes, thanks to a demand for both medical marijuana and legal adult recreational sales in many U.S. states.

Growth is expected to continue at a compound annual rate of 17 percent, but it is more than a diverse and accessible customer base fueling the fire. Companies such as SinglePoint, Inc. (OTC: SING) (SING Profile) have been busy with acquisitions that have expanded its capabilities and reach.

The company not only serves the legal markets in Arizona, but also California, Nevada, and potentially other soon-to-be-legal markets such as Texas. This pattern is industry-wide. Terra Tech Corp. (OTC: TRTC), MassRoots, Inc. (OTC: MSRT), ABcann Global Corp. (OTC: ABCCF) (TSX-V: ABCN), and Medical Marijuana, Inc. (OTC: MJNA) have also trended with acquisitions and expansions, giving the industry the boost everyone has anticipated.

SinglePoint, Inc. (OTC: SING) recently made two major acquisitions: Convectium, a manufacturer and supplier of vaporizer filling machines; and DIGS Hydro, a Southern California dispensary operator. With these two acquisitions, SinglePoint in the second quarter grew revenues by 378x compared to the first quarter of 2017 (http://nnw.fm/82o4T). As noted in a press release discussing its current position, SinglePoint's acquisition strategy has a third transaction underway.

Detailing the success of the company's acquisition-based growth strategy, SinglePoint CEO, Greg Lambrecht in a recent press release, said, "SinglePoint is in a better position than it has ever been before. We are looking at additional companies and plan to complete additional acquisitions prior to the end of the year. We are well capitalized to continue acquisitions and we are optimistic to complete around three more acquisitions and significantly increase the company's revenue."

A closer look at SinglePoint's acquisition history underscores Mr. Lambrecht's favorable sentiment of the company's position in the cannabis market. Its 90-percent stake in DIGS Hydro, which currently has two operational stores strategically located close to established licensed growers, has positioned SinglePoint as a leading provider of a wide range of growing equipment and accessories for individual and commercial plant cultivators in California (http://nnw.fm/oh7ZW). The strategy yields considerable potential, as recreational cannabis is projected to be fully legalized by June 2018. DIGS Hydro's products include all-in-one systems for growing plants plus grow rooms, supplies, HVAC system setup, hydroponic garden products, and accessories. Territorial growth into large, opportunistic markets like this promises to fuel continued growth for the company and the industry.

In March of 2017, SinglePoint made an investment in Convectium, the creator of a unique oil filling machine capable of filling cartridges or disposable vape pens for wholesale distribution to dispensaries. Convectium's 710Shark and 710Seal system can fill and package up 100+ cartridges or disposable vape pens in 30 seconds. Leaning on the marketability of this first-of-its-kind system for the cannabis industry, as well as its line of B2C products, Convectium previously forecast full-year 2017 sales of $3.5 million (http://nnw.fm/Uz1hR).

"We have evaluated numerous investment prospects in the cannabis space, and found there is nothing that compares to this opportunity we have with Convectium," Lambrecht stated in a press release announcing the deal (http://nnw.fm/WrO6R). "With this transaction, we will acquire a stake in a cannabis business that never touches a marijuana plant. This is the strategy we will use as we move forward to hedge us against changing federal and state laws."

In August, SinglePoint signed a Letter of Intent to acquire a 51-percent stake in Phoenix-based medical marijuana distribution company, Dr. FeelGood. With its acquisition of Dr. FeelGood on the horizon, SinglePoint will soon add another revenue stream to its model, as well as the decades of expertise of owners Scott Riley and Jeff Clevenger who will run the daily operations of Dr. FeelGood and assist with its expansion strategy.

The initial plan calls for the development of a delivery platform utilizing SinglePoint's location-based delivery application. Additional features, such as a directory and ordering system to directly compete with Leafly and WeedMaps, will then be implemented to cement the technology's position in the market. The collaboration supports Dr. FeelGood's existing plans to build the app to quickly meet existing and growing interest it the technology.

While SinglePoint enjoys a unique, diversified position in the cannabis industry, the company is joined by several other innovators demonstrating the girth of the market.

(PRN | 3 years ago)