FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “Pasha Brands Announces Acquisition of Pre-Roll Brand Roll Model.”
Pasha Brands Ltd. (“Pasha”) (CSE: CRFT) (OTC: CRFTF) (FSE: ZZD), Canada’s largest craft cannabis brands organization, announces the acquisition of the brand Roll Model. The brand previously formed the basis for a leading pre-legalization manufacturer and purveyor of premium cannabis pre-rolls based in Vancouver, BC . Through its licensed subsidiary, Medcann Health Products Ltd. (“Medcann“), Pasha expects to be able to have Roll Model pre-rolls on the shelves of preferred licensed retailers by the end of Q4.
Based in Vancouver, British Columbia, Pasha Brands is a vertically integrated organization that is firmly rooted in BC’s craft cannabis industry, which boasts an international reputation. With proven capabilities in cannabis cultivation, genetic research and development, product, processing, and retail, Pasha is uniquely positioned in the new legal cannabis market through its network of hundreds of craft cannabis suppliers under the Pasha umbrella.
Pasha’s subsidiary, BC Craft Supply Co. Ltd., is developing a craft cannabis campus, which is dedicated to bringing craft quality into the newly legal cannabis market in Canada. BC Craft Supply Co. Ltd. is driven to assist craft growers in obtaining security clearance and licensing to grow as micro-cultivators, specializing in education and compliance to bring growers into the regulated cannabis supply market.
The cannabis industry is rapidly coming to be dominated by large corporations. Many of the bigger firms within the marketspace had capitalized on the widespread legalization efforts and established operations early. However, certain companies rose to the top through funding rounds as well as mergers and acquisitions. For instance, Codie Sanchez, Managing Director at Cresco Capital Partners, highlighted that the growth of cannabis companies is largely attributable to brand alliances and M&As. Sanchez also notes that the success of small businesses is directly dependent on either acquiring even smaller operations or being acquired by a larger corporation. On the other hand, some small businesses have created alliances to promote a variety of cannabis products such as traditional flower, extracts, concentrates, topicals, tinctures, and edibles. Generally, most larger companies seek to acquire multi-state operators (MSOs) or businesses that have obtained licenses in specific regions. In emerging regions, the competition to obtain a license to operate a cannabis business is especially fierce; typically, thousands of entrepreneurs and businesses apply for licenses, but only a handful are rewarded. For example, the state of New Jersey is seeking to establish additional medical dispensaries because of the lack of supply compared to the demand witnessed. In response, the state is expected to issue an additional six medicinal cannabis licenses later on in 2019. State regulators noted that applicants must attend a mandatory meeting, where ground rules for the process were outlined. Overall, more than 800 people from around the U.S. attended the meeting in efforts to obtain a New Jersey medical license. Generally, the number of applicants compared to the number of how many licenses are expected to be given means that there is a slim chance to be approved. As a result, large corporations will aggressively seek to acquire a business that has already obtained a license. And as the industry continues to develop, M&As are expected to define the future of the marketplace. According to Mordor Intelligence, the cannabis market is expected to reach USD 89.1 Billion from USD 14.5 Billion in 2018. Additionally, the market is expected to register a CAGR of 37% during the forecast period from 2019 to 2024.
Most small companies do not possess an adequate budget to acquire other cannabis operators, which makes it difficult for many to thrive among the competition. Consequently, smaller operators are aiming towards creating higher quality products compared to the massive output of large producers. Specifically, craft cannabis producers have been able to flourish because of their attention to quality. Craft cannabis is similar to craft beer or craft coffee, which are all artisanal profession in which producers take immense pride in their work. In particular, craft cultivators engage in a highly tedious growing technique that produces premium and organic strains. The cultivators avoid using artificial by-products such as pesticides as they may damage and lower the cannabinoid content of the plant. Moreover, cultivators diligently examine each plant to ensure there are no outbreaks such as bug infestations or molding. Overall, the meticulous process results in top-shelf quality flower that stands out among competitors. On the other hand, large corporations generally focus on mass-producing cannabis to meet the sheer demands of consumers, although going for quantity often damages the quality of products. “A craft product is something that is sourced with intention, that has a connection to the community that it’s produced in, whether that’s through the sourcing of ingredients or paying homage, respect and tribute to the culture where the facility is in,” said Bryce Berryessa, Chief Executive Officer of La Vida Verde, a craft infused product company in California.
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