Snapshot looking at Cannabis Stocks in Nevada: Payment Tech Solutions to Retail Deals (OTC: $GOHE), (OTCQX: $TRTC), (TSXV: $NRTH.V) (OTC: $NCNNF), (CSE: $TGIF.C) (OTC: $TGIFF)
Investorideas.com, a leading investor news resource covering hemp and cannabis stocks releases a snapshot focusing on the recent developments occurring in the Nevada cannabis market as it matures and expands.
A recent news report discussing the potential of the Nevada market versus the California market mentioned, “a more intriguing metric offered in State of the Legal Cannabis Markets — spending per capita — suggesting that another state could blow California out of the water in terms of attractiveness to businesses and investors: Nevada.”
The article continued, “Between 2018 and 2024, Arcview and BDS are forecasting that Nevada’s population will increase by about 10% to 3.4 million. Yet, with the Silver State opening its doors to recreational marijuana sales in July 2017, total legal spending is expected to surge from $567 million in 2018 to $1.41 billion by 2024. On a per-capita basis, this works out to $415.57 in spending. That’s more than double California ($172.08), and is higher than every other state in the country. It’s no secret that Nevada’s exceptionally high spending per capita forecast stems from the state’s strong tourism. Las Vegas is a core attraction for Americans and visitors from all over the world, which should allow cannabis companies to focus their attention on Sin City to drive sales and margins. Plus, Nevadans are faced with a combined 25% tax rate, including a 15% tax on wholesale sales, and 10% on retail sales. That’s significantly less than neighboring California, which should help reduce illicit production.”
Assuming Arcview’s and BDS Analytics’ projections prove relatively accurate, there are a number of ways to play the most lucrative market in the United States.
Global Payout Inc. (OTC: GOHE), through its Nevada based subsidiary MTrac Tech Corporation, provides electronic wallet and e-banking financial solutions for the marijuana industry, recently announced that the company has retained one of the nation’s leading government affairs organizations, Strategies 360, to further the platform’s legislative push to be recognized as the most innovative and seamless SaaS (Software as a Service) solution to facilitate cashless, compliant, and secure payments for the legalized cannabis industry.
Headquartered in Seattle, WA, S360 represents a broad range of sectors with an expanding footprint in 12 western states and DC. The S360 team is comprised of some of the brightest, forward-thinking former executives from various industries, such as technology, finance, and energy, in addition to former state public officeholders.
One of the primary goals of the MTrac platform has been to assist governments in their efforts to both regulate the cannabis industry and solve the issues associated with cash-heavy transactions and a lack of available banking resources. Some states have recently been exploring closed-loop systems to implement statewide regulatory oversight of legal cannabis operations. For example, the state of Arizona has opened a “Fintech” sandbox, allowing various closed-loop systems into the Arizona market on a limited basis to see how well they operate. Nevada will very shortly, be opening a Request for Proposal to find a closed-loop, blockchain platform that will allow their cannabis industry to accept digital payments. It is the opinion of management that the MTrac system is the most seamless version of this payment platform available and offers the added benefit of having a large and growing customer base to provide proof of concept, similar to the recent state-wide launch in Louisiana.
“The agreement with S360 could not have been timelier in terms of presenting our solution to the western region, to showcase the features and functionality of the platform’s closed-loop eWallet accounts for the states’ lawmakers,” said Mr. Jason LeBlanc, Chief Compliance Officer of MTrac. “We are extremely excited to be working with such a dynamic and results-driven government affairs team. The opportunity to present our platform at the highest levels of state regulators and legislators is an objective that our legal and compliance teams have been working toward for the last several months, and the partnership with S360 is now making this opportunity a reality.”
The Company looks forward to working closely with the S360 team to introduce its payment platform to the western states and will keep shareholders apprised of its progress at regular intervals.
Terra Tech Corp. (OTCQX:TRTC), a vertically integrated cannabis-focused agriculture company, recently announced that it has entered into an agreement to sell 100% of the assets of its Blüm Reno dispensary, located at 1085 S Virginia St. Suite A, Reno, NV 89502, including the building where the dispensary is located, for a purchase price of $15,000,000.
Terra Tech’s Blüm Reno dispensary has been operational since January 2017 and provides cannabis products to the local medical and adult-use markets, including the Company’s proprietary IVXX™ brand of premium medical cannabis, flowers, shatters, waxes and oils, among other high-quality cannabis products from a range of reputable providers of superior grade medical cannabis.
Derek Peterson, CEO of Terra Tech, commented, ”Selling the cannabis retail license for our Blüm Reno dispensary is another key milestone in our restructuring plan, a strategy that has been implemented to leverage our balance sheet to fuel growth, as opposed to approaching the capital markets more often than is necessary. Our Blüm dispensary in Reno has substantially increased in value since its opening, and selling its assets allows the Company to strategically monetize this asset. To move forward with our restructuring strategy, we plan to redeploy the additional capital generated by this sale toward more productive assets in California in areas such as infrastructure and sales and marketing.”
Terra Tech anticipates the closing of the transaction within 90 days, pending all state and local jurisdictional approvals.
The Nevada market is also starting to attract more Canadian companies such as 48North Cannabis Corp. (TSXV: NRTH) (OTC: NCNNF), who is hoping to enter into the Nevada market soon, as the company recently signed a definitive agreement to acquire Rare Industries, Inc., also known as Quill, a vape technology brand.
Quill’s products are being distributed in Oregon and Washington, with plans to reach California and Nevada. The company said this acquisition is its first attempt to reach the US.
"48North recognizes the importance of entering the burgeoning US market. I believe that authentic brands and next-generation products distributed at scale, particularly in the emerging US market, will be one of the major keys to success in the cannabis industry," Alison Gordon, co-CEO of 48North said in a statement. "Without question, the Quill suite of products aligns closely with 48North’s growing portfolio of brands.”
The total purchase price was set to $2.1 million out of which $641,000 in cash and $1.46 million is in the form of 48North’s common shares at a price of around 86 cents per share, the company reported.
48North plans to utilize Quill’s distribution network to promote its portfolio of brands in the US, and also to sell Quill’s products via its distribution networks in Canada.
"48North’s industry-leading focus on next-generation cannabis products and its brand-first consumer strategy will undoubtedly elevate Quill, its brand and products to the next level. The US-based Quill team is eagerly looking forward to joining with 48North’s experienced and dedicated management team," said Ian Van Vaughan Shaughnessy, co-founder of Quill.
1933 Industries Inc. (CSE: TGIF) (OTC: TGIFF), a vertically integrated cannabis consumer packaged goods company, recently commenced the transfer of cannabis plants to its new cultivation facility in Las Vegas following an extensive period of systems-wide testing.
"This is a brand new facility and we worked around the clock to ensure that all systems were operational before transferring our plants,” commented Mr. Tim Spencer, Director of Cultivation. The new facility allows the Company to cultivate five times the amount of cannabis flower that was previously produced to meet the high demand for its branded flower and concentrate products under the Alternative Medicine Association (AMA) line, which is sold in licensed dispensaries in Nevada. AMA also produces well-known brands such as Gotti’s Gold, Kurupt’s Moonrocks, and Denver Dab Co. under licensing agreements. The increased flower production in the new facility will meet the growing demand for premium cannabis products and will have a significant impact on the Company’s bottom line.
The Company will welcome OG DNA Genetics (DNA), a globally recognized leader in the research and development of cannabis genetics, to its new facility. DNA selected AMA as its partner in Nevada due to the Company’s advanced facility, extensive distribution channels, and high-quality standards. DNA will provide specific expertise to AMA for the development of a consistent phenotype strain for a new line of co-branded flower and pre-rolls.
"We have constructed a one-of-a-kind, purpose-built facility, integrated with the latest technology to increase yields, bolster plant health and assure the consistency and quality of our products,” said Mr. Chris Rebentisch, CEO of 1933 Industries Inc. "As experienced cultivators, we understand that controlling the growing environment is the most important part of cultivating high-quality craft cannabis at scale, which is why we spent significant time, capital and management’s time, to build a state-of-the-art indoor facility. We are investing in assets that will provide a continuous supply of the raw materials necessary to produce our premium cannabis products and improve our margins.”
In order to verify that the plants are receiving exact amounts of nutrients and moisture content, the facility was outfitted with drip automation in order to standardize cultivation techniques and implement efficient watering and feeding systems with waste reduction in mind. "We can exactly measure the water and air content, meaning we are driving each plant’s growth with actual data instead of subjective opinion. This level of refinement is further testament to our commitment to consistent quality," added Mr. Spencer.
Once the cannabis plants are situated in the new facility, they will vegetate for approximately four weeks before the flower cycle is begun for another eight weeks. The next steps include harvesting, drying, packaging, and third-party testing. The entire cycle takes approximately 16 weeks.
As the Nevada market expands in population and as more cannabis-related infrastructure develops we can expect it to become a rival, if not overbearing market in comparison to the already massive California market. State tax and regulation changes could also play an important role in moving forward as federal legalization remains out of reach in the US.
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