The cannabis race is on. Businesses of all sizes are scrambling for their piece of the global market. The prize is huge, the cannabis market is forecasted to be worth as much as $146.4 billion by 2025.
Is the position of current leaders such as MedMen Enterprises (OTC: MMNFF), Trulieve (OTC: TCNNF) or KushCo Holdings (OTC: KSHB) threatened by the activity of less-renowned innovators in the cannabis sector, as PotNetwork Holdings, Inc. (OTCMKTS: POTN), White Label Liquid Inc. (OTC: WLAB) or CLIC Technology, Inc. (CLCI)?
Controversies Create Challenges for Leaders
After 2018 Q4 financials have been released, MedMen Enterprises came out as an unquestionable leader with $29.9 million in quarterly sales. Yet the first months of this year have been crushing for their stock, as MedMen has been kicked out of the New York Medical Cannabis Industry Association among discrimination controversies. To fuel constant expansion, the company has released 13.6 million new shares in December 2018 diluting the value of their original shares.
Despite those facts, the board remains calm about the outcome of the company, as it strives to close on the biggest acquisition ever in the U.S. cannabis industry – buying PharmaCann for $682 million. This could turn the tide for MedMen, as it would expand their reach from five to twelve states, encompassing over half of the U.S. population. By skipping the licensing process, MedMen plans to reap the profits straight away, leading to analyst speculation that its value could double over the next year.
The power of partnerships
Coming just $1.6 million short of MedMen Enterprises is Trulieve Cannabis (OTC: TCNNF & CNSX: TRUL) (“Trulieve”). Their network of dispensaries comprises 25 stores positioned across the state of Florida. Though not as extensive as the projected reach of MedMen, Trulieve still sells up to 70% of Florida’s cannabis volume.
Trulieve is set on securing its position by entering into strategic partnerships. They have just closed another brand licensing deal with SLANG Worldwide to introduce Organa Brands’ product portfolio to the Florida medical cannabis market. With more than twice as many partnerships as its closest competitor, Trulieve covers all product formats expected to be available in Florida, comprising “the most diverse product offering in Florida,” according to analyst Robert Fagan.
Pack the pot
Closing the big three U.S. cannabis companies is KushCo Holdings (OTC: KSHB) – a company that is not processing marijuana at all. The entity serves as a parent company to a diverse group of businesses, providing products and services critical for production and distribution of cannabis products. Their most prominent enterprise, Kush Supply Co., stands as one of the biggest distributors of packaging, supplies, and accessories for the U.S. marijuana industry.
Even though the company has has just secured long-term development and distribution agreement with IEKO Corporation, it suffered lately from clear selling pressure, seeing their shares of stock dropping by roughly 5%. Still, KushCo is on the rise with quarterly revenues growing at 186.2%. The prospect for 2019 is nothing short of optimistic, as KushCo’s management expects the company to generate $120 million in revenue – a sharp increase from $18.8 million in 2017.
PotNetwork Holdings, Inc. (OTCMKTS: POTN) has entered the cannabis market by storm, offering a highly diversified product line that targets multiple audiences – encompassing as unusual groups as animals in need of pain relief. Thanks, in part, to this brilliantly unorthodox approach, DiamondCBD – a subsidiary of PotNetwork, has generated over $18 million in revenues last year and it’s well on its way to surpassing that result in 2019.
Behind that success lies the ability to target previously overlooked subsets of the CBD market. Their medicinal focus has come under the interest of a major pharmacy chain, which looks forward to distributing some of DiamondCBD’s products. With stellar results and solid prospects for future development, financial analysts give PotNetwork Holdings a 1-year price target of between $0.192 to $0.337 with a rating of “Strong Speculative Buy“.
If predictions hold true, the company will grow by over 15,804% over the next three years. PotNetwork Holdings might not have the same capital as giants to the likes of MedMen Enterprises, but they effectively use the flexibility of a small business to stay highly innovative and thus competitive on the market.
The ghost grower
With all the boom going on in the newly accessible American cannabis sector, White Label Liquid Inc. (OTC: WLAB) aims to help any business wanting to enter the industry without the need of setting up extensive operations. WLAB offers top-quality white-label cannabis products ready to be branded by the final client.
As numerous cannabis company claims to deliver lab-quality products, rivalry is mostly happening on the shelves where differently-branded packages are fighting for customer’s attention. With a broad range of hemp-derived products spanning from edibles, through oils, creams, and pre-rolls, White Label Liquid Inc. makes it almost effortless to find the proper product for the right audience.
With the capacity of producing up to 50,000 units per day and delivery times not exceeding two weeks, WLAB is ready to propel virtually any business that is ready to enter the CBD market. All while adhering to rigorous industry standards.
Even though the social stigma of cannabis is declining, traditional structures like the banking system are slow to adapt to the new reality. This leads to situations where banks refuse to serve cannabis-oriented companies in fear of treading on a semi-secure ground. That leaves a $9 billion industry underserved.
CLIC Technology, Inc. (CLCI) aims to answer that problem, by offering a blockchain solution for businesses that would allow them to seamlessly accept payments in cryptocurrencies and receive payouts in fiat currencies. All without the need to be an expert in digital money. The solution of CLIC can help in circumventing the limits imposed by banks and open businesses to a new customer pool, who craves for efficient, secure and discreet methods of payment.
The cannabis sector is entering an incredibly exciting phase and has already spawned a number of sub-sectors. Anybody who believes we will be reading about the same companies in two years time is likely sorely mistaken.
(Featured image by Elroi via Shutterstock)
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