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The New Cannabis Business Model: Expanding Through Real Estate


News provided by

MarketNewsUpdates.com

26 Jun, 2018, 12:30 GMT

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PALM BEACH, Florida, June 26, 2018 /PRNewswire/ --

Cannabis kings are becoming real estate moguls; a surprising but calculated trend. Why? Despite mergers, acquisitions, and high valuations making the news on a near daily basis, the industry is still growing. Just as McDonald's became a global power in the fast food market by leasing land to all of their franchisees, leading cannabis players are making big moves through real estate investment. Big players in cannabis such as Canopy Growth Inc. (OTC: TWMJF), Aphria Inc (OTC: APHQF), Cannabis Wheaton (OTC: CBWTF) and Choom Holdings Inc. (OTC: CHOOF) are all actively branching out into property investment, catching onto a tactic Crop Infrastructure Corp. (CSE: CROP) (OTC: CRXPF) has been mastering quietly for a while.

In the US alone, cannabis is expected to become a multi-billion dollar a year industry, even without federal approval. In Canada, the federal government estimated that Canadians would spend $4.2 billion in 2018 alone. That's equivalent to roughly 0.2 percent of GDP on pot.

For cannabis businesses, making big moves is essential to stay on top. It is no longer about having the largest greenhouses, nor is it about buying out the competition. The fierce competition has to foster innovative global business strategies that look beyond the bud.

Crop Infrastructure Corp. (CSE: CROP) (OTCPK: CRXPF) is one of a few global players in cannabis committing significant resources to the pursuit of land, lease, and other real estate opportunities. As the market continues to ramp up in the cannabis sector, land is going to become an ever more critical asset. Any companies without investment in land will soon find it difficult to maintain their footing.

The "Green Rush" of Acquiring Cannabis Acreage 

Reducing risk in an inherently risky market like cannabis is an ongoing challenge for many in the sector. For cannabis corporations, real estate is a logical approach to reducing risk and securing long-term stability. One only has to look at Crop Infrastructure Corp. (CSE: CROP) (OTCPK: CRXPF) to see how in a very short few years, their real estate portfolio has exploded. Washington, Nevada, and California are all recent expansions or real estate acquisitions for the company.

In California alone, Crop Infrastructure Corp. is expanding its 10,000 sqft. medical with a 20,000 sqft. Licensed recreational property. California's cannabis market has the potential to surpass the entire Canadian market occupied by big names such as Aphria. In Washington State, Crop Infrastructure Corp. is set to complete construction on its first Washington State project. This project, named The Dozen, spans 12 purpose built greenhouses, with approximately 44,000 sqft. of canopy space, and is projected to produce 24,000 pounds of cannabis annually.

Crop Infrastructure Corp. (CSE: CROP) (OTCPK: CRXPF) is also strategically staging themselves with a critical property footprint in Nevada state. With 300 acres of land and 300 acres of water rights in Las Vegas country, they are building the largest operation in the state, close to 2,000,000 sqft. of greenhouse space, with development beginning shortly.

The New Angle for Growth: A Real Estate Strategy 

Cannabis is land hungry. The projections of the real estate required for the flourishing industry are staggering. Brokerage firm Jones Lang LaSalle Canada recently reported that by 2020, the top eight grossing companies in Canada are expected to eat up enough real estate to compete with Amazon Inc.'s Seattle headquarters. That's nearly eight million sqft. of cannabis canopy.

Crop Infrastructure Corp. (CSE:CROP) (OTCPK: CRXPF) leases land and agricultural resources to cannabis growers in a market where rents have skyrocketed for marijuana friendly industrial spaces. These spaces are already few and far between. Many companies face astronomical rent increases after spending millions on renovations. Cannabis companies are a captive market which Crop Infrastructure Corp. is supplying to.

Banks are also still nervous about working with the industry. In the U.S. at least, federal banks still follow federal legislation. Cannabis companies already struggle to find investors for their business, and once they become profitable, also find it difficult to safely reinvest. Companies like Crop Infrastructure Corp. are taking this uncertainty to heart by following a secure alternative strategy of investing in cannabis infrastructures themselves. Buying real estate is about taking back control of their operations, and it's about minimizing the influence of outside risk factors.

Investing these 'un-investable' cash assets back into real estate is a calculated way to avoid conventional banking altogether. It's a safety net not yet available to the cannabis industry. It makes much more sense for an owner to make significant investments in the property, when they will control the property going forward. Crop Infrastructure Corp. has quietly followed this low-risk forward-looking approach while companies like Aphria and Canopy focused on short-term rental strategies. Owning, instead of renting, avoids an uncertain future.

Crop Infrastructure Corp: "We've Gone Global"  

Buying up acreage and industrial space within the US is just one piece of a complicated puzzle. In such an overcrowded marketplace, cannabis companies need to strategize beyond the American investment tactics. This is why Crop Infrastructure Corp. (CSE: CROP) (OTCPK: CRXPF) has gone global.

The company just announced its definitive licensing agreement for US distribution rights and for the exclusive Italian rights to The Yield Growth Corp.'s proprietary cosmetic and therapeutic products that are formulated for infusion with cannabis. Under the terms of the agreement, Yield Growth will receive $1 million for the Italian license and distribution rights through the issuance of 2,500,000 units of Crop Infrastructure Corp. at a deemed price of $0.40 per unit. Penny Green, President and CEO of Yield Growth said: "CROP is at the forefront of the burgeoning Cannabis industry as it now seeks to move beyond the State of Washington and California with this deal as its entry into the European cannabis market."

This acquisition will be complementary to Crop Infrastructure Corp.'s efforts of expanding operations to Europe, widening its global footprint, resources, and distribution channels one acreage at a time.

Other Players Expanding into the Global Cannabis Marketplace 

Canopy Growth Inc. (OTC: TWMJF) - The company to beat today is Canopy Growth, a longtime player in the marijuana industry. They operate over a million and a half square feet of GMP-certified indoor and greenhouse facilities.  They have a broad portfolio of brands including Spectrum Cannabis, Tweed, and Foria.

Aphria Inc (OTC: APHQF) - Poised to be the lowest cost per pound medical grade production in Canada, Aphria Inc. is focused on expanding its eco-friendly cannabis operations in the country. They currently operate out of Leamington, Ontario. Moving beyond the Canadian marketplace they have a wholly owned subsidiary in Germany, Nuuvera Deutschland GmbH, which recently acquired a 25.1 percent stake in the Berlin-based Schöneberg Hospital.

Cannabis Wheaton (OTC: CBWTF) - Cannabis Wheaton is an innovative financer in an industry which continually finds it difficult to source startup capital and expansion financing. In exchange for their uniquely open financing style, their partners deliver Cannabis Wheaton the rights to a previously negotiated crop yield and a relatively small percentage of equity.  Recently Cannabis Wheaton announced an acquisition agreement with Dosecann and a joint venture with Peter Quiring and a binding interim agreement with Inverell S.A in Uruguay.

Choom Holdings Inc. (OTC: CHOOF) - Choom's strategy is to develop a carefully curated portfolio of high-grade cannabis strains with ideal characteristics for craft growing, targeting the premium segment of the adult consumer market. To date, Choom has secured rights to 17 retail leases in Alberta. Applications to obtain a cannabis retail license for these outlets have been submitted. Choom also has 7 leases secured in BC, and licenses will be applied for upon commencement of the licensing program in BC. The company also intends to play an important role in the Saskatchewan retail market.

Bottom Up Approach to Securing Market Share 

For a player that has until now remained out of the spotlight, Crop Infrastructure Corp. has snuck up on many sectors in the cannabis industry. With footholds across the US, and now in with their sights set on Europe, they hope to ride out the mania currently focused exclusively on the Canadian market.

Crop Infrastructure Corp.'s unique approach to leverage strategic capital investment in land expansion opportunities, hitting record-breaking low production costs as a result, could turn out to be a significant advantage to gaining long-term market share.

For a more in-depth look at Crop Infrastructure Corp. (CSE:CROP) (OTCPK:CRXPF), please read the full report on potstocknews.com.  

Potstocknews.com (PSN) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with PSN or any company mentioned herein. The commentary, views and opinions expressed in this release by PSN are solely those of PSN and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable PSN and FNM for any investment decisions by their readers or subscribers. PSN and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.

The Article and content related to the profiled company represent the personal and subjective views of the Author (PSN), and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author (PSN) has not independently verified or otherwise investigated all such information. None of the Author, PSN, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer's filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer's securities, including, but not limited to, the complete loss of your investment. FNM was not compensated by any public company mentioned herein to disseminate this press release but was compensated forty five hundred dollars by PSN, a non-affiliated third party to distribute this release on behalf of Crop Infrastructure Corp.

FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and PSN and FNM undertake no obligation to update such statements.

Media Contact:
FN Media Group, LLC
info@marketnewsupdates.com
+1(561)325-8757

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