The cannabis space is full of companies chasing the pot of gold at the end of the cannabis rainbow. Matter of fact, there are so many companies that it’s hard to keep track of them all. One company that has slipped under our radar is SOL Global Investments Corp (OTCMKTS: SOLCF).
Usually, what we at Insider Financial do is just focus on the microcaps that are the most active or have the biggest intraday moves. As you can see from the chart below, SOLCF has proven to be a great trender rather than a stock that makes explosive moves. As we take a closer look at SOL Global Investments Corp, we don’t believe it will be under the radar for long.
SOL Global Investments Corp Background
First up, here’s a little background info for those of you that aren’t familiar with the company. SOL Global is an international investment company with a focus on, but not limited to, cannabis and cannabis-related companies in legal U.S. states, the hemp and CBD marketplaces and the emerging European cannabis and hemp marketplaces. Its strategic investments and partnerships across cultivation, distribution, and retail complement the company’s R&D program with the University of Miami.
Last month, SOL Global signed a deal to acquire MCP Wellness, Inc. for an aggregate purchase price of US$150 million. MCP Wellness, a special-purpose vehicle (SPV) created to invest in Michigan cannabis operations, currently holds the rights to acquire two Michigan cultivation licenses, a processing license, and 3 fully licensed cannabis provisioning centers in Michigan with a fourth provisioning center scheduled to open in Ann Arbor in May.
MCP Wellness also has plans to open an additional nine municipally-approved provisioning centers by August 2019. Assuming MCP Wellness’ expansion plans are completed as scheduled, SOL Global expects Michigan gross revenue from the acquired business to generate in excess of US$61 million in the calendar year 2019 and more than US$121 million in 2020. Following the closing of the Acquisition, SOL Global intends to combine the acquired Michigan business into its wholly-owned subsidiary CannCure to form a new multi-state operator.
Under the terms of the LOI, the purchase price will be satisfied by way of US$35 million in cash and US$115 million in equity consideration in CannCure, resulting in Merida owning approximately 42% of CannCure.
3 Boys Farms
3 Boys Farms’ operations consist of 40,000 square feet of fully-operational greenhouses located on an eight-acre parcel of land. The existing facilities include a two-acre odor mitigation space that is run 100% with harvested rainwater, solar pumps and repurposed high-volume chilled air from the cultivation greenhouses, resulting in a zero-carbon footprint. 3 Boys Farms’ innovations, including alternative energy use, greenhouse cooling designs, and rainwater harvesting, were recognized and honored by the Governor’s Environmental Leadership Award.
Additionally, 3 Boys Farms has commenced extraction and processing operations at its new GMP-certified farm and laboratory facility in Indiantown, Florida. The new facility will also include 64,000 square feet of indoor cultivation and processing space and 50,000 square feet of greenhouses. Cultivation at the new facility is expected to commence in the third quarter of 2019. The new facility will add to the production capacity of 3 Boys Farms, which currently harvests approximately 350 pounds of premium-quality cannabis flower per month out of its facilities in Ruskin, Florida.
Long-Term Game Plan
SOL Global and Merida Capital are also in active negotiations on acquisitions for the MSO in additional states. Specifically, SOL Global is finalizing negotiations to acquire an industry leading California cultivator and processor with superior genetics and a chain of prime retail dispensaries in California, and at the conclusion of that transaction, SOL Global intends to pursue a “going public transaction” of the MSO by way of an initial public offering, reverse takeover, plan of arrangement or other similar transaction that will result in the listing of the shares of the MSO on a recognized Canadian stock exchange. SOL Global and Merida both intend to be significant shareholders of the MSO following the going public transaction.
Currently trading with a market cap of $88 million, SOLCF is an exciting cannabis player with big plans. With the company on course to becoming a multi-state operator, shares of SOLCF look to be not only under the radar but also undervalued considering the enormous potential ahead. SOLCF has big plans in the works and it’s only a matter of time before the big players on Wall Street and Bay Street take notice.
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Disclosure: We have no position in SOLCF and have not been compensated for this article.