The U.S. cannabis sector continues gaining momentum, with
numerous major milestones emerging in recent months, including the first
television ad in history that was set to air in July from vape pen maker Neos,
on Denver ABC affiliate KMGH in the state which has led the charge on marijuana
reform, Colorado. Originally scheduled to appear just before the million plus
(Nielsen) viewer “Jimmy Kimmel Live” program, this landmark event, which was
aborted at the last second due to federal level concerns despite the spot
adhering to all requisite protocols, characterizes just how fast and how far
the industry has come. Even though the spot was pulled, it clearly demonstrates
a “camel’s nose under the tent” moment for cannabis sector marketing and takes
its place in the history books alongside other key milestones, such as the
recent signing of a compassionate use law in traditionally conservative Texas
by Governor Greg Abbott. The new Texas law allows the medical use of low-THC
cannabis by patients such as children with crippling epileptic conditions like
Dravet syndrome.
Colorado is the tip of the spear in many respects for this
yet nascent industry, having generated a whopping $250 million plus in sales
and bringing in $62 million in tax revenues during its first year of
recreational legality, 72 percent higher tax receipts than initially projected,
a feat due in large part to the state’s recreational use market boom. In
Oregon, where Governor Kate Brown signed a law last month officially allowing
existing medical marijuana dispensaries to begin selling recreational cannabis
three months ahead of schedule, leading industry analysts at Arcview Market
Research have projected first-year retail sales in the neighborhood of $200
million, with excise taxes in excess of $20 million. With tax receipts like
these and public sentiment at a record high of 53 percent approval for
decriminalization and rising, according to recent polls by both CBS News and
Pew Research Center, it is little wonder that other states are racing to pass
similar reforms.
The groundswell of popular support and juicy tax revenues
have created massive opportunities for smaller companies looking to innovate
within the sector and offer various operators access to technologies and
services that can help their businesses prosper. With 74 percent sales growth
nationwide between 2013 and 2014 alone, the roughly $2.7 billion 2014 U.S.
market for cannabis, as well as cannabis based products like low-THC
cannabidiol oil, and MIPs (marijuana-infused products) such as beverages and
other edibles, is estimated by Arcview as potentially climbing to upwards of
$40 billion by 2020, making it larger than the NFL or the entire organic food
industry.
This is why a company like full-spectrum property
management, construction and finance outfit Cherubim Interests (OTC: CHIT),
which hitherto has been squarely focused on leveraging the company’s deep bench
of experienced managers to do single and multifamily real estate development,
management, and investment, has chosen to strike while the iron is hot, and
throw its hat into the cannabis sector ring. Having obtained an exclusive
worldwide license to a proprietary, portable, easily scalable and
self-contained cultivation system developed by Victura Construction Group (OTC:
VICT), a holding company focused on acquiring businesses in the disaster
recovery and restoration construction markets, Cherubim has set about deploying
this complete turnkey cultivation system to cannabis sector producers.
Able to provide an optimum grow environment for producing
high-value cannabis strains, the BudCube Cultivation System (BCS), marketed via
CHIT’s wholly-owned BudCube Cultivation Systems USA subsidiary, gives new
market entrants and established growers alike an easily approachable and scalable
leasing option that allows them to grow year round, while substantially
bypassing the need for land, facility construction, or existing site
renovation. Whether the grower is a small start-up operation, or a large and
experienced entity, the BCS units provide a cost-effective basic component to
model an entire grow op on. Directly addressing many of the bottom line-sapping
issues that typically hamper large outdoor and indoor grow ops, like the costs
and logistical complexities associated with pests (which include increasingly
stringent end product pesticide content evaluations), controlled agricultural
environment technology like the BCS represents a logical evolution for a
production-centric industry that is focused on maximizing yields of
high-purity, high-potency strains. Delimiting lost inputs due to crop failure
elements and preserving the genetic purity of identified high-value strains is
only the tip of the iceberg when it comes to the advantages such controlled
agricultural environment solutions can provide.
According to Cherubim’s CEO, Patrick Johnson, the company
has been patiently doing its due diligence and eyeing the sector for an
opportune entry point. Now, as more and more states move to pass reform laws,
and it seems inevitable that the North American market as a whole has nowhere
to go but forward, the time has come for controlled environment agriculture
solutions like the BCS. Leasing high-quality, yet cost-effective units to
growers is a classic facilitator play that allows the company to sidestep
extant legal constraints and challenges the cannabis industry continues to
face. This strategy enables CHIT to profit off already-licensed operators in
states and jurisdictions where medical and recreational cannabis is legal,
without experiencing the associated overhead factors faced by growers,
dispensaries and testing agencies.
The old adage about selling picks and shovels during the
Gold Rush era comes to mind and CHIT is clearly looking to do the same thing
with the “Green Rush,” acting as a cannabis sector facilitator and hardware
provider. This aspect of the company’s operation will act as a strong revenue
driver for its soup-to-nuts real estate development activities, providing the
company with the kind of capital required to keep the real estate project and
property acquisition/development end of things handily on track.
For more information, visit http://CHIT.QualityStocks.net
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