Meet Chemistree (CSE:CHM) (OTCQB:CHMJF), One Of Few Companies That Got In Early Enough To Acquire Assets For Pennies On The Dollar
From Production to Packaging to Branding to Distribution – Chemistree Is Quietly Building A Cannabis Empire
The run-up to cannabis legalization in Canada drew investment interest from around the world. Over the past three years, the investment world has been mesmerized as Canadian cannabis stocks experience gains of up to 375% [9].
Now that Canada has officially legalized cannabis, and the market has matured, investors are looking south for a new profit opportunity. That market is the United States, and it makes the Canadian Cannabis Market look very very small.
Just how massive is the US cannabis market? Forbes Magazine reports that the Canadian medical and recreational markets combined will pull in a total of $5.4 billion by 2022. Meanwhile, the U.S. adult-use market ALONE will generate $15.7 billion by 2022. [1]
In Other Words, the Canadian Cannabis Boom Was Nothing Compared to What Might Await
Investors in the U.S.
In The United States,thirty states (and Washington, D.C.) allow the use of medical cannabis and nine states (plus D.C.) have legalized recreational use. Those numbers are likely to grow in the future.
That’s why major companies, such as Constellation Brands and Coca-Cola, are seeking to dip their toes into the market, according to Forbes… And it’s why more and more investors are eyeing early-movers like Chemistree (CSE:CHM) (OTCQB:CHMJF).
Why is Chemistree drawing attention?
Chemistree has been quietly purchasing valuable assets in California and Washington at cut-rate prices.These assets not only position Chemistree (CSE:CHM) (OTCQB:CHMJF) as a cannabis market leader with a head-start in production, packaging, branding, and distribution, but also make it a prime acquisition target as larger,well-funded companies inevitably enter this rapidly expanding market.
Let’s Take a Quick Look at What Chemistree (CSE:CHM) (OTCQB:CHMJF) Has Been
Up to in America:
1) Chemistree Acquired an Award-Winning Cannabis Brand That is Widely Known as One of the Country’s Highest Quality Strains!
Chemistree (CSE:CHM) (OTCQB:CHMJF) acquired Sugarleaf, a Washington-based premium cannabis brand. Two of the brand’s strains – White 99 and Presidential Kush – have won the prestigious Cannabis Cup competition in the ‘Best US Hybrid’, ‘Medical Hybrid’, and ‘People’s Choice Cup’ categories.
Chemistree (CSE:CHM) (OTCQB:CHMJF) is moving at breakneck speed to expand the reach of Sugarleaf’s award-winning products. They can now be found in over 50 retail stores, and the company plans to double this by the end of 2018 and quadruple it in 2019.
Chemistree has alreadybuilt a distribution network before most companies have even built products. Sugarleaf products are already in 50 plus retail stores across Washington. The company has strong retail partnerships with popular Washington dispensariessuch as 20/20 Solutions and The Joint, among others. Once these distributions networks are established it will be extremely difficult for new cannabis companies to win shelf space.
2) The Company Acquired Prime Real Estate in America’s Hottest Cannabis Market – California.
After conquering Washington, Chemistree (CSE:CHM) (OTCQB:CHMJF) closed a deal for 9.55 acres of prime real estate in Desert Hot Springs, California. This land is in an area designated specifically for cannabis cultivation.
When fully built out, the land will be able to support over 200,000 square feet of cultivation and processing buildings. These facilities will also be able to handle edibles, vapes, oils, concentrates, and tinctures.
This property purchase anchors Chemistree (CSE:CHM) (OTCQB:CHMJF) in one of the United States’ fastest growing cannabis markets. The California cannabis market is expected to hit over $5 billion in 2019[12] and is potentially larger than the entire Canadian market.
Chemistree’s (CSE:CHM) (OTCQB:CHMJF) Leaders Know How to Raise Funds
Chemistree’s management team has a collective track record of raising over $150 million in financing, being part of $130 million buyouts, and building companies with revenues over $50 million.
They’ve used this experience to successfully raise $4.5 million in private financing in July – which was more than double their initial goal of $2.1 million. That funding then allowed the company to purchase the Sugarleaf brand and the company’s massive California property.
That’s an indication that the company can raise funds AND make intelligent buying decisions that grow the company’s value.
Justin Chorbajian: Justin is the Chairman of Chemistree and a retail expert with over 20 years of experience including his time as co-owner of Canada’s largest privately-owned chain of hydroponic shops. His retail expertise, coupled with his status as a foremost cannabis consulting expert, makes him ideal to lead Chemistree’s aggressive expansion into the competitive retail space.
Karl Kottemeier: Karl is the President of Chemistree. He has 25+ years of financial industry experience, having raised over $150 million in equity capital for previous ventures such asRockgate Capital,which raised $75 million alone. His down-in-the-trenches experience at managing and obtaining financing for companies makes it highly likely that Chemistree will have what it needs to finance its future growth.
Doug Ford: The CFO of Chemistree brings with him over 30 years of valuable venture capital experience. In the past, he has focused on arranging funding for emerging growth companies exactly like Chemistree.
Dennis Hunter: As a senior advisor to Chemistree, he contributes knowledge and insight gained from building multiple cannabis companies with revenues of over $50 million in California. As an organizer of a large cannabis growing collective in California, he brings invaluable industry contacts.
David Brooke: Another senior advisor to Chemistree, David grew up in the family business – which was General Hydroponics. That business was acquired by Scott’s Miracle Grow for $130 million in 2015. David Brooke’s experience in General Hydroponics has made him an expert on managing large on-site grow facilities powered by green technology.
Sheldon Aberman: Recently added to Chemistree’s board, Sheldon has over 15 years of experience in the cannabis industry. He has built up a reputation as being one of the world’s leading experts on commercial cannabis manufacturing, having designed thousands of grows across the globe, including large-scale facilities.So is the American Cannabis Market Set to Emulate the Canadian Market … But on a Bigger Scale?
Over the past three years, Canadian cannabis investors have seen their fair share of success stories. Some of the highlights include:
MedMen enterprises Inc. (CSE:MMEN) (OTC:MMNFF)
Market Cap: $2.6 billion
A top retailer in the US cannabis market, MedMen is one of the largest full-scale cannabis holding companies in the indutry. Memen secured a first-mover advantage by defining the next generation of marijuana businesses and creating a new investment category: cannabis as a consumer product. [8]
Curaleaf Holdings Inc. (TSX-V:N) (OTC:NXTTF)
Market Cap: $408.1 million
A leading vertically integrated cannabis operator in the US. Curaleaf is a major player in the US cannabis consumer markets. The company owns and operates 28 dispensaries, 12 cultivation sites and 9 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey and New York. [9]
Namaste Technologies (TSX-V:N) (OTC:NXTTF)
Market Cap: $408.1 million
A testament to the power that e-commerce can bring to the cannabis industry, Namaste Technologies began as a company selling cannabis-related products and services before acquiring its sales license back in July.[10]
The next major industry in America is forming right now in front of our eyes and forward-thinking companies such as Chemistree (CSE:CHM) (OTCQB:CHMJF) are ahead of the curve and uniquely positioned to dominate this new potentially multi-billion dollar opportunity.
The US market is also ripe for consolidation. Just look how unconcentrated Colorado’s retail cannabis market is relative to other industries. Using the HH Index, you can see that Colorado Retail Marijuana’s 101 rating places it at the bottom end of an unconcentrated market. It’s not just unconcentrated, it’s super unconcentrated.
Why is this important? Because highly segmented markets create huge opportunities for larger firms to swoop in and buy up smaller companies that have valuable assets like Chemistree (CSE:CHM) (OTCQB:CHMJF).
The moment of truth has arrived for American cannabis investors. American cannabis companies are making moves, building brands, seizing market share, establishing distribution networks, and buying assets. The battle for American cannabis dominance has begun, and it seems to have started before everybody was ready.
#1 Chemistree Is Located in the World’s Largest Emerging Cannabis Market
Experts say the United States cannabis market could be worth as much as $50 billion within a decade. Many estimates place the potential market size of California alone to be equal to that of the whole of Canada. Chemistree (CSE:CHM) (OTCQB:CHMJF) strategic investment in valuable assets in both Washington and California have positioned it as an early mover in this potentially massive marketplace.
#2 Chemistree Has an Early Start in Production, Packaging, Branding, and Distribution
By focusing on strong partnerships, fundraising and targeted asset acquisition, Chemistree (CSE:CHM) (OTCQB:CHMJF) has carved out a vertically-integrated business model that includes the four major components of a successful cannabis company – production, packaging, branding, and distribution.
#3 Chemistree Now Controls Valuable Strategic Assets
Many players in the US market remain hesitant, creating an opportunity for aggressive companies like Chemistree (CSE:CHM) (OTCQB:CHMJF) to increase their foothold. The company acquired the award-winning Sugarleaf brand and key real estate in California at highly strategic valuations. Sugarleaf’s signature strains are recognized as some of the most potent in the industry.
#4 Chemistree’s Leadership Team Checks All The Boxes
Chemistree (CSE:CHM) (OTCQB:CHMJF) management team has deep experience and knowledge in retail, financing, and cannabis cultivation. All well-known and well-connected experts in their own right, they are also personally invested in the company and committed to its success.
#5 ChemistreeIsSetting Itself Up to Ultimately Be a Prime Acquisition Target
The Canadian cannabis industry has already seen several major consolidations, which could be a sign of things to come in the US market. With a strategic portfolio of assets obtained at attractive valuations, Chemistree (CSE:CHM) (OTCQB:CHMJF) has positioned itself as a prime acquisition target.
[1] https://www.forbes.com/sites/irisdorbian/2018/10/17/canadas-new-legal-weed-economy-should-boost-u-s-market-maybe/#63b745226a38
[2] https://www.leafly.com/news/strains-products/what-are-the-strongest-cannabis-strains
[3] http://www.pewresearch.org/fact-tank/2018/10/08/americans-support-marijuana-legalization/
[4] https://www.forbes.com/sites/tomangell/2018/10/10/trump-administration-seeks-public-comments-on-marijuana-reclassification/#2c0368e0749a
[5] https://business.financialpost.com/cannabis/aurora-closes-on-medreleaf-in-largest-cannabis-takeover-yet
[6] https://www.bloomberg.com/news/articles/2018-01-24/high-times-for-pot-deals-as-canada-counts-down-to-legalization
[7] https://www.reuters.com/article/us-canopy-growth-stake-constellation/corona-owner-invests-another-4-billion-in-cannabis-producer-canopy-idUSKBN1L0155
[8] https://www.bloomberg.com/quote/MMEN:CN
[9] https://www.bloomberg.com/quote/CURA:CN
[10] https://www.bloomberg.com/quote/N:CN
[11] https://mjbizdaily.com/chart-how-much-consolidation-awaits-colorados-retail-marijuana-market/
[12] https://www.prnewswire.com/news-releases/california-cannabis-market-expected-to-reach-51-billion-market-value-685917412.html
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