Mergers & Acquisitions Heating Up in Cannabis Cultivation Market That Could Exceed $350 Billion By 2027

PALM BEACH, Fla., Dec. 16, 2020 /PRNewswire/ -- After it being reported that big Cannabis companies such as Aphria and Tilray were discussing the possibility of a merger, no wonder the cannabis industry has the caught the attention of many as growth in the industry is expected in the years to come. The various cannabis global markets have shown substantial growth over the past few years, and projected to continue for years to come. The increase in demand by consumers and the legalization around the world has been fueling the expansion of the needed increase in supply for flowers, recreational, medicinal, oils and infused products. The need for its source… cannabis… is driving the market to increase cultivation. Cannabis cultivation is a term that refers to the commercial growing of cannabis. A recent report from industry insider, Grand View Research projected that the global cannabis cultivation market size is expected to reach USD 358.8 billion by 2027, expanding at a CAGR of 14.3% from 2020 to 2027.  The legalization of marijuana in various geographies and its increasing adoption for medical purposes are factors driving the market for cannabis cultivation.   Active Companies active today in the cannabis related markets include:  GrowGeneration Corp. (NASDAQ: GRWG), Item 9 Labs Corp. (OTCQX: INLB), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), HEXO Corp (NYSE: HEXO) (TSX: HEXO), Silver Spike Acquisition Corp. (NASDAQ: SSPK).

The Grand View report continued with: "Growing legalization and adoption of cannabis for the treatment of chronic diseases is positively impacting the market growth. Furthermore, the liberalization of laws related to hemp and marijuana by various countries is further bolstering revenue growth over the forecast period.  Based on biomass, the hemp segment dominated the market in 2019. Factors contributing to increase in demand include increasing adoption of hemp and derived products and its growing acceptance among the users due to its low THC content. It is mainly used by people who intend to reap the medical benefits of the plant without getting intoxicated. In addition, positive government reforms regarding the utilization of hemp in many countries is further propelling the market growth."

Item 9 Labs Corp. (OTCQX: INLB) Breaking News:  Item 9 Labs Finalizes Merger Agreement with U.S. Cannabis Franchisor - Expects to Close Merger of ONE Cannabis Group, Parent Company to Dispensary Franchise Unity Rd., in January 2021 - Item 9 Labs Corp. ("Item 9 Labs," or the "Company"), a vertically integrated cannabis operator that produces premium products, announced today that it has finalized its merger agreement with ONE Cannabis Group (OCG, Inc.) and expects to close the merger in January 2021.

ONE Cannabis Group, based in Colorado, is the parent company to the cannabis dispensary franchise Unity Rd. Built up from the legacy of a 10-plus year, award-winning Colorado dispensary & cultivator and infused with decades of franchise experience, the company helps eager operators enter the complex industry with ease. The cannabis franchise pioneer offers its partners the knowledge, resources, and ongoing support needed to compliantly and profitably operate a dispensary. Currently, Unity Rd. has franchise agreements signed for the development of more than two dozen shops across multiple states and expects the first store to open in quarter one 2021.

Recently, it was named one of the top cannabis retail leaders in the nation by MJBizDaily magazine and one of the "Best Cannabis Companies to Work For" in both the dispensary and cultivation categories in Cannabis Business Times' elite 2020 list. The company is also the first cannabis business to earn a Franchise Times Dealmakers award – a recognition presented to the boldest players driving mergers and acquisitions in franchising. For more information on ONE Cannabis Group, visit ocginc.com and head to unityrd.com for details on the Unity Rd. franchise opportunity.

"Our teams have been working on parallel paths to ensure a smooth integration and are eager to officially operate as one unit. This was a significant milestone for all and we look forward to closing [the merger] in January 2021," Item 9 Labs' Chief Executive Officer, Andrew Bowden, commented. "The merger with ONE Cannabis Group greatly enhances our business capabilities with its retail distribution and unique franchise operation. Their business model and national network of Unity Rd. franchise partners create highly predictable, recurring revenue streams." Read the full Press Release and more for INLB at:  https://www.financialnewsmedia.com/news-inlb

In other active company news in the markets this week: 

GrowGeneration Corp. (NASDAQ: GRWG), the nation's largest chain of specialty hydroponic and organic garden centers, recently announced its acquisition of Grassroots Hydroponics, a three-store chain of hydroponic garden centers in Southern California. The acquisition kick starts GrowGen's plans for rapid expansion in the region, with three high-volume retail locations in Anza, Lake Elsinoreand Murrieta. With these additions, GrowGen will operate 13 stores in the booming California cultivation market and 39 total retail locations across the country.

Founded in 2008, Grassroots Hydroponics is one of the largest hydroponic operations in Southern California, with annual revenues approaching $20M. This is GrowGenerations's second acquisition in the state within a one-month period; in November, GrowGen acquired The GrowBiz, the nation's third-largest chain of hydroponic garden centers, with stores in Northern California and Oregon.

WM Holding Company, LLC ("WMH" or the "Company") and Silver Spike Acquisition Corp. (NASDAQ: SSPK) ("Silver Spike"), a publicly-traded special purpose acquisition company, announced recently a definitive agreement for a business combination that would result in WMH becoming a public company. The combined company will be led by Chris Beals, Chief Executive Officer of WMH, and is expected to remain listed on the Nasdaq Stock Market.

Founded in 2008, WMH operates Weedmaps, the leading online listings marketplace for cannabis consumers and businesses, and WM Business, the most comprehensive SaaS subscription offering sold to cannabis retailers and brands. The Company solely provides software and other technology solutions and is non-plant touching. WMH has grown revenue at a CAGR of 40% over the last five years and is on track to deliver $160 million in revenue and $35 million in EBITDA for 2020.

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), the Canadian company defining the future of cannabinoids worldwide, recently announced it has entered into a strategic Supply Agreement (the "Agreement") with Cantek Holdings ("Cantek"), one of Israel's leaders in the medical cannabis field.

Under the terms of the Agreement, Aurora will supply Cantek with dried bulk flower over a two-year period, with the option to extend. The Company intends to provide Cantek with a minimum of 4,000 kgs of bulk dried flower annually, which will be processed into finished product, and co-branded under the Aurora and Cantek brand names for the Israeli market with the potential for additional international market sales. Having secured all necessary export and import permits, the initial shipment of cannabis under the Agreement occurred during the week of November 16, 2020.

"We are excited about our strategic relationship with Cantek, a leader in the Israeli market. This Agreement provides Aurora with a great opportunity to expand our medical cannabis brand and industry leading science in one of our key international markets of focus," said Miguel Martin, Chief Executive Officer of Aurora. "Today's announcement demonstrates more than just a supply agreement. It's about the strength and quality of the Aurora medical brand being validated once again by the world's medical cannabis markets, including countries like Israel in which we had no distribution prior to today. We consider this Agreement to be a significant step for Aurora, and we look forward to bringing our high-quality medical cannabis products to patients in Israel."

HEXO Corp (NYSE: HEXO) (TSX: HEXO) recently said it was proud to virtually unveil its Centre of Excellence in Belleville, including the Truss Beverage Co ("Truss") bottling facility through its joint venture with Molson Coors Canada.   "We are thrilled to celebrate the year with our shareholders by virtually showcasing our manufacturing Centre of Excellence in Belleville," said Sebastien St-Louis, CEO and co-founder of HEXO. "The operational capabilities in Belleville have been instrumental in helping us reach the number one position in Canada in both the hash and beverage categories. Based on the latest quarterly filings from top competitors, HEXO is now top four in adult-use market share by net sales dollars in Canada and we are closing the gap to top three. We are confident that Belleville's capacity, scalability and innovation capabilities will continue driving sales and growth across categories."

HEXO Corp is an award-winning consumer packaged goods cannabis company that creates and distributes innovative products to serve the global cannabis market. The Company serves the Canadian adult-use markets under its HEXO Cannabis, Up Cannabis and Original Stash brands, and the medical market under HEXO medical cannabis. 

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