California Cannabis Distribution Deals Bring Good News to California Market

POINT ROBERTS, Wash. and DELTA, British Columbia, April 08, 2019 (GLOBE NEWSWIRE) -- Investorideas.com, a leading investor news resource covering hemp and cannabis stocks releases a market snapshot discussing the success of recent distribution agreements in the California cannabis space.

Nutritional High International Inc. (((EAT) (((SPLIF), a company focused on developing, manufacturing and distributing products under recognized brands in the cannabis products industry, with a specific focus on edibles and oil extracts for medical and adult recreational use, recently congratulated Cresco Labs Inc. on their agreement to acquire Origin House.

"We are pleased that another California distribution and manufacturing company with many similarities was acquired at such a healthy multiple," commented Adam Szweras, Co-Chair of the Nutritional High board. "This acquisition and the valuation of Origin House are a vote of confidence for companies like Nutritional High, signaling that the market values companies who are able to control shelf space and realize greater margins and market penetration through ownership of the distribution pipeline."

Nutritional High recently released their Q2 2019 Financials with some of the highlights of $6.1 million from the sale of Cannabis related products in California, primarily via its wholly owned distributor, Calyx Brands Inc. which represents an annualized revenue run rate of $24.2 million. At the end of January 31, 2019, the Company has now recognized a trailing twelve-month revenue from Cannabis sales of approximately $17.6 million, making Nutritional High's Calyx now one of the largest distributors in California.

Cresco Labs Inc. and CannaRoyalty Corp., d/b/a Origin House (((OH) (((ORHOF) recently announced that they have entered into a definitive agreement in which Cresco Labs will acquire all of the issued and outstanding shares of Origin House, representing a total consideration of approximately C$1.1 billion on a fully-diluted basis, or C$12.68 per Origin House Share.

The Transaction represents the largest public company acquisition in the history of the US cannabis industry. The combined entity will be: one of the largest vertically-integrated multi-state cannabis operators in the United States; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.

Grown Rogue International Inc. (((GRIN) (((NVSIF), a vertically-integrated, multi-state cannabis company with licenses and operations in Oregon, California, and now Michigan recently released its financial and operating results for the three months ended January 31, 2019.

Some of the first Quarter 2019 highlights included: a first quarter revenue growth of 388% year-over-year to $834,309 which is expected to continue as the Company proceeds with its expansion plans in Oregon, California and Michigan, gross margin improved to 31% compared to negative gross margin Q1-2018, and Grown Rogue products in over 220 dispensaries in Oregon.

"Our Fiscal 2019 Q1 represents the first full quarter for Grown Rogue as a public company and marks the Company's 5^th consecutive quarter of revenue growth since launching first in the state of Oregon in late 2017," said Obie Strickler, President and CEO of Grown Rogue. "To have gained this brand recognition and sales traction, in what is arguably the world's most competitive legalized cannabis market, bodes very well for our expansion into California and particularly the newly legalized market in Michigan. We've grown very quickly from controlling just 3 licenses in one state a year ago to assets allowing us to have 22 licenses in three states today."

Gabriella's Kitchen Inc. (((GABY), an innovative and leading-edge cannabis wellness company is ensuring its own distribution throughout the state having recently announced the completion of its acquisition of all of the issued and outstanding shares of Sonoma Pacific Distribution, Inc., California's premier, independently-owned cannabis distribution company, which was previously announced on October 23, 2018.  With the closing of the Acquisition, GABY gains an expansive distribution reach across the state of California, which currently represents the world's most thriving cannabis market as well as a permanent cannabis distribution license that was issued to Sonoma Pacific by the California Bureau of Cannabis Control and the County of Santa Rosa on March 14, 2019.

"With the support of GABY and its executive team as well as the ability to leverage GABY's infrastructure, Sonoma Pac realized a record-breaking first quarter of 2019.  For the three month period ending March 31, 2019, it is estimated that Sonoma Pac generated revenue that exceeds CDN$8 Million from the sale of our proprietary products," stated Aaron Browe, President of Sonoma Pac.  "That number represents a massive 1,200% increase over the same quarter last year."

As California is currently the world's largest regulated cannabis market, the market trends and developments that occur there will have a large impact on how the rest of the cannabis industry operates. These recent developments show that strong financials and a solid distribution channel have become necessities in this maturing market.

The California Senate voted last Thursday, April 4^th (voting 32-4), passing a bill that would allow the state to extend temporary licenses to cultivators until replacements are approved, removing a potentially large obstacle and showing it wants to maintain its market share.    

For investors following cannabis stocks, Investor Ideas has created a stock directory of publicly traded CSE, TSX, TSXV, OTC, NASDAQ, NYSE, ASX Marijuana/Hemp Stocks

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