Cannex Capital Holdings (CSE:CNNX) (OTCQX:CNXXF) has acquired California's Pure Ratios Holdings, and CNNX stock is soaring as a result.
Let's check this out.
CNNX Stock
The acquisition will, in essence, allow Cannex Capital Holdings entry into the US CBD market and this is what's causing all the fuss.
The news was announced yesterday morning when CNNX stock was trading for $1.18 CAD. Towards the end of the day, the stock shot up to $1.40 per share. By the close of day, it settled at $1.35.
The gains are continuing today as CNNX stock is in the green, up 2.20% and selling for $1.38 CAD at the time of writing. The increase represents approximately 15% in growth since the news was announced.
What's the Fuss?
As stated, the reason CNNX stock is reacting so well to the news is that "the acquisition expands Cannex's brand portfolio with new CBD and wellness brands."
>> HEXO Stock BUY Rating Issued By Beacon Securities: Growth Ahead?
This is a strategic move that allows Cannex to capitalize on the massive US CBD market. This market is estimated to be worth $22 billion by 2022 according to Brightfield Group.
According to Cannex's press release: this is a "strategic acquisition by Cannex to add innovative California wellness brand combining cannabis and holistic medicine including a premium hemp-derived CBD product portfolio."
Pure Ratios combine hemp-derived CBD with traditional Chinese medicines. It has over 300 distribution channels including health food stores and private medical practitioners in the US.
The acquisition adds a brand of this caliber, in an exciting time for CBD-products, to Cannex's portfolio. CNNX stock could easily reflect this potential in the future as much as it is doing so presently.
The Deal
Canada-based Cannex Capital provides financial, management, and real estate services (amongst others) to cannabis businesses. According to Benzinga, it will pay out "$2 million in cash, 3.5 million shares of its stock and $2.5 million in contingent cash consideration. Cannex will also assume $500,000 of Pure Ratio debt."
CNNX stock is soaring on the news, so let's see how long investors react to this acquisition. What do you think? Are you excited about the CBD market?
>> Read More Secondary Services News
Featured image: DepositPhotos © Gajus-Images
