During the last year, we have been laser focused on the California cannabis opportunity and have been closely monitoring this burgeoning market.
Demand for cannabis products continues to increase and California is the world’s largest cannabis market. The opportunities for companies in this multi-billion-dollar cannabis market are significant and we have focused on finding businesses that have been benefiting from the growth of this industry.
One company that we have been closely watching is TransCanna Holdings (TCAN.CN) and we believe that is an opportunity that investors need to be watching. The company is led by a management team with a proven track record of success and today, we have issued an update on this emerging opportunity.
About TransCanna Holdings
Currently, TransCanna Holdings provides branding and design services and expects to launch distribution, transportation and sales services by the end of the first quarter of 2019. The company specializes in helping its clients find matching customers based on their place in the cannabis value chain.
Although the California cannabis market is the world’s largest market, the industry suffers from a lack of integration across its supply chain that would provide growers, manufacturers, and customers with optimal efficiency and quality. TransCanna goal is to meet the need for integrative services in California and beyond, proving its model, providing value to customers, and delivering returns to its investors.
TransCanna’s services are entirely focused on connecting cannabis growers, manufacturers, and end-users and customers. By mid-2018, the company had reviewed more than 450 cannabis companies and performed advanced due diligence on 48, showing its commitment to choosing only the best partners and candidates who can leverage TransCanna’s services to reach industry leadership status.
The company is led by a management team with a proven track record of success and this is an important aspect of the story. CEO & Chairman James Pakulis was the former Chairman and CEO of General Cannabis Inc. and oversaw the company’s growth from $0 in revenue to over $16 million in annual revenue in less than two years. He is also the former president of Lifestyle Delivery Systems (LDS.CN) (LDSYF), a vertically integrated cannabis related entity operating in California.
A Multi-Faceted Growth Opportunity
Through a combination of organic and inorganic growth initiatives, TransCanna is establishing its sustainable competitive advantage across its range of services. Last year, TransCanna entered into an agreement with GoodFellas Group, LLC to acquire 23 exclusive Branding & Design contracts.
This acquisition is a catalyst and will prove to be accretive as it will allow the company to offer distribution, transportation, marketing, and sales to its new manufacturing clients, pending receipt of appropriate licenses and permits and completion of final payments under the acquisition agreement.
TransCanna plans on creating a distribution network throughout California where any client in the state will be within an approximately three-hour drive from one of its hub facilities. After creating a successful platform in California, the company plans to replicate its success in other cannabis markets in the United States and we are bullish on this opportunity.
Receives its Temporary Distributor License in California
In early January, Transcanna Holdings reported a major milestone and announced that TCM Distribution, the non-profit entity managed by the company, has received its temporary distributor license from the state of California. On December 31st, TCM submitted its permanent distribution license application and we are favorable on this development.
This comes only a few months after TCM Distribution received a formal approval from the City of Adelanto regarding the transfer of TCMD’s city issued medical cannabis transportation and distribution permit. The permitted facility is located on a parcel of land in which the landlord is scheduled to build two, 20,000 sq. ft. cannabis related facilities.
The landlord has offered to lease one of the facilities to TCMD and is currently in negotiations to lease one of the facilities which will have all the required power and electricity necessary to operate its distribution operations. As a result, TCM is no longer looking to build its own facility in Adelanto and we are favorable on this. Leasing a facility will be a much less cost intensive project and we are monitoring how the team executes on this.
A Company in the Middle of a Major Expansion
Earlier this month, TransCanna Holdings accepted an assignment of a real estate option agreement from CEO Jim Pakulis to acquire a land, building and asset package which includes an existing 196,000 sq. ft. facility on 6.5 acres of land, as well as cannabis packaging and processing equipment. The facility is located in an area zoned for cannabis in northern California and we are favorable on the leverage to this burgeoning cannabis market.
The purchase price for the property, should the option for purchase be exercised, is an aggregate of US$15 million that is payable in cash. Over the last two years, approximately US$8 million in tenant improvements has been completed, creating a vertically integrated cannabis facility. Although the price of the property is not cheap, the recent upgrades have been significant and have been completed to USDA standards.
The intended purpose of the facility includes divisions for transportation/distribution, extraction, manufacturing, bottling, and cultivating. Conditional on the property being acquired, the company expects to lease space to a third-party laboratory testing company. The property will provide TransCanna with significant room to expand and preliminary architectural drawings for the additional acreage includes approx. 400,000 sq. ft. for a fully enclosed two story grow facility.
Acquisition financing is pending and will be announced by the company once it has been secured. The facility requires an approximately $1.5 million to finish tenant improvements and become operational. We are favorable on this opportunity and the growth prospects associated with this acquisition. This could prove to be a major growth driver for TransCanna and this is something to watch.
Signs LOI to Acquire GoodFellas Group
Last month, Transcanna Holdings signed a non-binding letter of intent to acquire GoodFellas, a full service advertising and marketing agency for the cannabis and hemp industries. GoodFellas was formed in 2017 and is comprised of a team of design, marketing and retail experts who are driven to assist their clients find success in the marketplace. During the last year, Goodfellas has significantly expanded its reach and it currently works with twenty five clients, in addition to the 23 brands already under acquisition by the company, that are at various stages of their business development.
Transcanna will be acquiring the company for a combination of cash and stock. The acquisition of Goodfellas will be completed at a price that is two times the previous 12 months revenues, at the time of execution of definitive agreements, as set forth in the audited financial statements. Under the agreement, 60% of acquisition price will be paid at closing and the remaining 40% will be paid 12 months following the closing of the deal.
The acquisition of GoodFellas plays a key role in the company’s long-term strategy and we are favorable on the growth prospects associated with this deal. Through GoodFellas, Transcanna will have immediate access to a majority of the successful dispensaries in California as well as retailers throughout the United States.
Announces Completion Of 420 Global
Yesterday, Transcanna announed the completion of pharse one of it’s proprietary software platform “420 Global”. 420 Global will allow the Company to efficiently operate and fulfill every business aspect within their current and future facilities throughout the California cannabis market. “By streamlining this incredible amount of data and allowing management teams to pull pertinent reports in a timely manner is a tremendous benefit. 420 Global will be the backbone of our enterprise, the completion was on budget and ahead of schedule.” Stated Jim Pakulis CEO.
420 Global will integrate with the Company’s Warehouse Management System (WMS) and with METRC California’s Cannabis Track-and-Trace (CCTT) system making the company fully compliant. The software will work in conjunction with Apple hardware and be registered through the Apple Device Enrollment program for security and deployment.
A Company that is Worth Watching
The California cannabis market is one of the most exciting opportunities for companies and we are favorable on Transcanna’s leverage to this burgeoning market. The company is in the middle of a major expansion and represents a multi-faceted growth opportunity.
During the last few months, Transcanna has significantly advanced its fundamental story and we are bullish on the growth prospects from here. The shares has been trending higher and we are favorable on the recent price movements. The company has massive growth prospects and this is an opportunity that investors need to be watching.
When it comes to cannabis companies, you want to focus on companies that are led by a management team with a proven track record of success. We are favorable on Transcanna’s management team and are favorable on their ability to create value for shareholders.
Transcanna is laser focused on growth and has been executing flawlessly on a major expansion. The company has significant catalysts for growth and we are monitoring how the team continues to execute from here. To learn more about this rapidly growth cannabis companies, please email email@example.com.
Pursuant to an agreement between StoneBridge Partners LLC and TransCanna Inc. (TCAN) we have been hired for a period of 180 days beginning February 1, 2019 and ending August 1, 2019 to publicly disseminate information about (TCAN) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month (TCAN) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero shares of (TCAN), which we purchased in the open market. We plan to sell the “ZERO” shares of (TCAN) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (TCAN) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.
Published at Fri, 15 Feb 2019 11:42:35 +0000