Green Growth Brands Inc (OTCMKTS:GGBXF) is looking to be a major cannabis player after announcing its takeover bid for Aphria Inc (NYSE:APHA). While some have been skeptical about Green Growth’s bid, looking deeper we see that win or lose Aphria, Green Growth has big plans. The company looks to be a force whether it buys Aphria or not. Taking a closer look, we like what we see at Green Growth. Judging by the recent activity in the stock, others are liking what they see as well.
First up, a little background info on the company for those that aren’t familiar with Green Growth Brands. Green Growth Brands expects to dominate the cannabis and CBD market with a portfolio of emotion-driven brands that people love. Led by Peter Horvath, the GGB team is full of retail and consumer packaged goods experts with decades of experience building successful brands. GGBXF currently operates The+Source, the premier Cannabis store in Las Vegas, NV, as well a cultivation and production facility in Las Vegas. The Nevada Department of Taxation awarded GGB seven retail cannabis dispensary licenses on December 5, and the Company recently announced an acquisition regarding expanding its operations into Massachusetts and the acquisition of a cultivation facility in Pahrump, Nevada.
After the close of trading on Wednesday, December 27th, Green Growth Brands Ltd (CSE:GGB) made a US$ 2.1 billion offer for Aphria Inc (NYSE:APHA) or around C$11 per share. Green Growth has the financial backing of the billionaire Schottenstein family, which has a sprawling retail empire that includes lots of real estate and interests in grocery stores and consumer-goods manufacturing. They have the financial strength to increase their bid if they have to.
This month, Green Growth Brands announced an agreement with DSW Inc (NYSE:DSW) to sell hemp-derived cannabidiol (CBD) personal care products under the Seventh Sense Botanical Therapy brand at select DSW stores throughout the U.S. The deal is for 54,960 units and covers sales in 96 U.S.-based DSW stores. Seventh Sense brand offers high-quality CBD-infused products and affordable prices, including muscle balms, body lotions, body washes, and foot creams. The Agreement follows a successful test phase conducted last autumn in which Green Growth Brands sold select Seventh Sense products in 10 DSW stores. During the first 10 weeks of the test period, 74.4% of the product presented on shelves was sold, significantly exceeding expectations. CEO Peter Horvath said:
“DSW is the number one full line adult footwear specialty retailer in North America. They have revolutionized shopping for shoes and accessories and we are thrilled they chose to partner with our company, allowing us to introduce a new product category to their customers. The Agreement and the deepening relationship with DSW is the first step in our strategy to expand sales of personal care CBD products through external partnerships, in mall kiosks, and through a growing number of stores and online.”
Last month, Green Growth Brands accepted an irrevocable option to acquire all of the membership interests of Henderson Organic Remedies, LLC together with the right to all of Henderson Organic’s free cash flow until exercise of the Henderson Option in consideration of the issuance of (i) a secured loan in the principal amount of USD$15,485,000 (CAD$20,752,000) and (ii) a common share purchase warrant exercisable for 7,609,746 common shares of GGB in the aggregate. Henderson Organic operates a 2,693 square foot medical and retail marijuana dispensary facility located in Henderson, NV. In connection with these transactions, HOR Holdings LLC is expected to acquire all of the membership interests of Henderson Organic.
Currently trading with a market cap of $852 million, GGBXF is an exciting story among pot stocks. Led by an experienced management team with the backing of the billionaire Schottenstein family, Green Growth is set on becoming a force in the cannabis space with or without Aphria. GGBXF looks to be a must-own for any cannabis investor.
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Disclosure: We have no position in GGBXF and have not been compensated for this article.
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