Acquisitions and Ancillary Opportunities for Investors in the Cannabis Sector; Aurora Cannabis, Canopy Growth Corporation, Canadian Solar, DirectView Holdings (OTC: DIRV)
POINT ROBERTS, Wash., Sept. 27, 2018 (GLOBE NEWSWIRE) -- Investorideas.com, a leading investor news resource covering security and cannabis stocks releases a sector snapshot of the growing cannabis sector and how investors can capitalize on the opportunity by finding potential acquisition targets and ancillary products and services.
Key to future growth of the global cannabis industry are ancillary products and services including security - ranging from surveillance technology to cyber security, banking and payments, real estate, insurance, solar energy, packaging and innovative tech including AI.
DirectView Holdings, Inc. ( OTC: DIRV ), a video surveillance solutions technology and Kush Bottles (Quote ), a packaging and branding company are examples of companies that currently offer ancillary products and services, that may also be potential acquisition targets to cannabis companies posturing for growth. Looking at solar as an ancillary service, Profit Confidential recently noted, “An interesting thought is the employment of solar energy to complement the electric grid in growing marijuana. To play this potential connection, a solar solutions company like Canadian Solar Inc. ( NASDAQ: CSIQ ) seems logical.”
According to PWC Canada, “For long-term success, cannabis companies need to adopt technology as a critical capability.”
They also note, “Entrepreneurs in the cannabis industry are moving at warp speed to get their businesses up and running in time for the Canadian government’s legalization of adult-use cannabis, creating billions of dollars of value in the process. Most companies however, have failed to implement appropriate technology strategies during this boom, putting much of that equity at risk.”
For example, licensed producers (LPs) have made physical security a priority, installing surveillance cameras and establishing sign-in logs as part of compliance requirements necessary to maintain a licence. That said, few have given cybersecurity sufficient attention, opening the way for possible breaches that could damage operations, brand reputation, intellectual property and financial security.”
DirectView Holdings, Inc. ( OTC: DIRV ) currently serves multiple sectors, including education and hotels, in addition to targeting the cannabis space. Its security division offers technologies in surveillance systems providing onsite and remote video and audio surveillance, digital video recording and services. It also sells and installs surveillance systems and sells maintenance agreements. The company sells its products and services in the United States and internationally through direct sales force, referrals, and its websites.
In a recent interview, DirectView’s Chairman and CEO, Roger Ralston said that his company is looking at acquisition targets for future growth. Source - https://directview.com/directviews-nasdaq-interview-is-now-live/
An acquisition strategy is a fast-track path to growth and right now few sectors are doing it better than the cannabis industry. It also offers investors an opportunity to participate in the growth if they buy the right target. Some of the acquisitions are with private companies but the big headliners have been with smaller publicly-traded companies in the sector.
Aurora Cannabis Inc. ( TSX: ACB.TO ) ( OTC: ACBFF ) turned industry heads with its acquisition of one of its rivals, MedReleaf Corp. On July 25, 2018, Aurora Cannabis Inc. completed its acquisition of MedReleaf Corp. in a deal valued at US$2.5 billion or ($3.2 billion). This is the largest acquisition deal in the industry so far. Following that news, Aurora continued the hunt and announced on August 14th it had completed the acquisition of Anandia Laboratories.($115 Million). On August 7th it announced it had entered into a letter of intent to acquire the cannabis business of HotHouse Consulting Inc., a provider of advanced greenhouse consulting services.
On September 10th, Aurora Cannabis and ICC Labs Inc. announced that the companies have entered into a definitive arrangement agreement pursuant to which Aurora intends to acquire all of the issued and outstanding common shares of ICC (the ICC Shares) for $1.95 per share (payable in common shares of Aurora (the Aurora Shares) (the Share Consideration), reflecting an aggregate purchase price of approximately $290 million
One of the leaders in the sector has also been on an acquisition path. Canopy Growth Corporation ( TSX: WEED.TO ) ( NYSE:CGC ) and Hiku Brands Company Ltd. announced the closing of the acquisition of Hiku by Canopy Growth on September 5th. In a previous news release announcing the intent of the acquisition the company noted, “Hiku equals brands. Canopy is built on brands. So we combined them,” said Bruce Linton, Chairman & CEO, Canopy Growth. Just like the other big players, they have been on a whirlwind acquisition path with a flurry of news announcements.
Showing the power of the cannabis sector and having everyone look to possible deals in media, High Times just announced the acquisition of DOPE Media, Inc., an integrated cannabis consumer lifestyle company. The latest in a year full of media acquisitions, the 45-year-old institution picked up the flagship magazine, multimedia website, events business and its staff, to further expand its ownership of the cannabis media space. This acquisition comes ahead of High Times’ public listing later this quarter and amid its on-going Regulation A+ crowdfunding campaign.
Valued at $11.2 million, the deal was completed with a split of cash and stock in the growing High Times empire.
For investors following the sector Investor Ideas has created a stock directory of publicly-traded CSE, TSX, TSXV, OTC, NASDAQ, NYSE, ASX Marijuana/Hemp Stocks. Visit directory.
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