We have covered so many cannabis related plays, including several Canadian players, but CannaRoyalty Corp. (OTCMKTS:CNNRF) is one that is making its first appearance on Street Register today. Usually when that happens, we like to first give a description of the business as described by the company itself.
The company considers itself an active investor and operator in the legal cannabis industry, with focus on building and supporting a diversified portfolio of growth-ready assets in high-value segments of the cannabis sector, including research, consumer brands, devices and intellectual property.
Recently CannaRoyalty Corp. (OTCMKTS:CNNRF) added to that portfolio with a couple of acquisitions, Kaya Management Inc. and Alta Supply Inc. With the closing of the Acquisitions, CannaRoyalty intends to assume the California operations of Kaya and Alta Supply. CannaRoyalty has already substantially increased the revenue potential of Kaya by securing the exclusive statewide manufacturing and distribution rights to Bhang® edibles. Together, Alta Supply and the former manufacturers of Bhang® vaporizers and edibles generated approximately $11.5M (USD) in consolidated revenue in fiscal 2017.
Alta Supply has a licensed distribution facility in Oakland, California. CannaRoyalty has assumed the facility for distribution of cannabis products. Alta also holds a Temporary Cannabis Distribution License (Type 11 – Medical). In fiscal 2017, Alta’s business generated $6.5M USD in wholesale revenue and $1.4M in gross profit.
Kaya has a licensed manufacturing facility in Oakland, California. CannaRoyalty has assumed the facility and consolidated production of Bhang® and CR Brands products into this facility. Kaya is now the exclusive California manufacturer of Bhang® edible and vaporizer product lines in California. Bhang® brand products are highly awarded and widely distributed cannabis branded products. Kaya also holds a temporary Cannabis Manufacturing License (Type 6 – Medical). In fiscal 2017, Kaya’s business generated) $5.2M in manufacturing revenue from Bhang® vaporizers, and $1.2M in gross profit.
California is the largest cannabis market in the world with annual sales of approximately $2.8B in 2016, which only includes sales of products in the medical marijuana market. In consideration of the legalization of a full, adult recreational cannabis market in California in January 2018, sales are forecast to grow to over $6.8B by 2021 and vaporizer products are expected to account for 15% or over one billion dollars of the total.
This represents a compound annual growth rate of 54% between 2017 and 2021. Concentrates and edibles accounted for over 46% of retail cannabis sales in California in 2017. Edibles, with a category share of 22%, are forecast to grow by 117% in 2018 while Concentrates at 24%, are projected to grow by 135%,
CannaRoyalty Corp. (OTCMKTS:CNNRF) also announced today that it has closed its previously announced offering, on a “bought deal” basis, pursuant to a short form prospectus, of an aggregate of 3,750,000 units of the Company at a price of $4.00 (CAD) Per Unit for aggregate gross proceeds to the Company of $15M (CAD). (Source: Canada Newswire)
We’re interested to continue following this story of a Canadian cannabis player heading South of the Border to participate in the massive California cannabis business, not to mention how it will navigate Canada’s upcoming nationwide recreational legalization of marijuana, which is now just over three months away.We’ll stay up on any further developments with CNNRF and pass them along to you! Stay locked on StreetRegister.com and be sure you’re signed up for our 100% free smallcap newsletter. It’s as easy as that! Simply submit your primary active email address in the box below. Subscribe now!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in CNNRF stock, short or long.