As the cannabis industry continues to grow, different branches of the industry are surfacing, from agtech to cultivation and retail. And over the last year or so, the latter branch has become not only increasingly popular, but competitive as well.
Right now, there are several ongoing deals in the cannabis sector; this week, a handful of these deals closed. They were all in cultivation and retail.
Here are three cannabis companies making noise in the cultivation and retail sector this month.
Cannabis Companies Making Waves in Cultivation and Retail
At the end of May 2019, we saw a few M&A deals closed.
First, we have Fire & Flower (TSXV:FAF) (OTC:FFLWF), an Alberta-based cannabis company. Fire & Flower, which trades on the TSXV, recently acquired four Saskatchewan dispensaries, all of which used to be owned by Prairie Sky Cannabis. According to sources, the deal involved a CA$6.5 million cash payment and the issuing of 4.96 million shares.
But it's not just the acquiring of dispensaries that make Fire & Flower a company to watch within the cultivation and retail sector.
On May 24, the cannabis company released its financial report for the fiscal year ended February 2, 2019. In the report, Fire & Flower said the company launched its wholesale cannabis and accessory business during this time, named Open Fields Distribution. The store serves over 20 external customers.
According to CEO Trevor Fencott, Fire & Flower is executing its mission to become a "leading, best-in-class cannabis retailer." And it's difficult to argue against that one.
Then we have Green Growth Brands (CSE:GGB) (OTCQB:GGBXF), which trades on the Canadian Securities Exchange and is another company that closed an M&A deal at the end of May, improving its reputation in the cultivation and retail sector. On May 17, Green Growth Brands, which is based in Columbus, Ohio, closed the acquisition of a Nevada-area cultivation facility. The facility was once owned by two local companies, and Green Growth acquired it for $13.37 million.
Of course, this is not the company's first acquisition; but it does put Green Growth in a position where it can increase its cultivation footprint. The deal also means the company can increase cannabis wholesale operations while supplying its retail operations.
One More
While not as recognizable as, say, Green Growth Brands, another company to watch for in the cultivation and retail sector is Natura Life + Science. This week, the California-based company led by CEO Ori Bytton closed a $91 million equity raise to make a cannabis campus in the Golden State.
If all goes as planned, Natura Life + Science will commence manufacturing, distribution, and delivery in Q3 2019. Cultivation is set to begin early next year.
Takeaway
Most investors recognize that the cannabis industry is booming. Sure, some companies have had some problems, but for the most part, the cultivation and retail sector seems to be coping reasonably well. If anything, the sector has been a dominant force in the cannabis sector in 2019; and with the news of these companies this week, the C&R sector looks like it's going to maintain that leading position.
As we move further into 2019, the cultivation and retail sector in the cannabis industry might be one to watch. As are the aforementioned companies.
Featured image: DepositPhotos
