Cannabis investors have poured money into North American cultivators and neglected the rest of the sector. Companies like World High Life PLC (NEX: LIFE) demonstrate the new opportunities on offer
by Peter Tomaszewski-Guillon
With legalization gaining speed investment has been pouring into cannabis companies. Unfortunately, this investment has largely been focused on cannabis cultivators. Recent oversupply problems show that the industry is already beginning to feel the pain and profits are suffering as a result.
The fact is that investors and companies were blinded by the promise of massive returns and massively overestimated project demand. As a result, the industry is facing a severe oversupply problem with cannabis and hemp literally rotting in the field, which is not good for business to say the least.
The fact is that North American growers no longer represent the huge opportunity they once did. Now investors need to begin looking to new markets and further up the supply chain in order to see big returns. These three companies all represent promising opportunities in what is a crowded marketplace.
The European frontier
The European cannabis market is set to be worth €123 billion by 2028. This makes it one of the most important cannabis sectors in the world and provides a second opportunity for investors who missed out on the North American boom.
One future leader of this sector is World High Life PLC (NEX: LIFE) which is positioning themselves as the go-to investment in the European market. World High Life PLC builds upon the experience of two hugely successful Canadian pot stocks – Supreme Cannabis (TSX: FIRE) and 1933 Industries (CSE: TGIF).
The company focuses on identification and acquisition of the promising UK and European cannabis firms that would create a diversified portfolio leaving no sector of the industry unaddressed. By establishing a grip over all the aspects of cannabis manufacturing, World High Life mitigates the risks of investing in just one subset.
To fuel the explosive growth, the tennent companies are cooperating with each other by sharing best practices and solutions, creating a network of cannabis businesses that work for a common goal. In effect, some of them have grown more during 2018 than for the last six years. This happens when people with more than 30 years’ of experience on public markets move in to replicate their proven business models on new grounds.
With a team of seasoned specialists and conclusions drawn from the Canadian market, World High Life PLC is ready to use those lessons to help nurture the nascent European cannabis sector. Forecasts indicate that the United Kingdom and European CBD and medicinal cannabis markets could grow to as much as €58 billion by 2029. With astronomical demand like this, Europe seems to be a lucrative place for marijuana investments and World High Life PLC provides a ready solution to profit from the cannabis industry in the upcoming years.
Cannabis receives proper packaging
For years cannabis has been sold on the black market without too much regard for its visual appearance. Underserved clients were ready to accept a product packed in basically any container or wrapping that would keep the size and smell discreet. While discreteness still matters, legal consumers expect their product to be well branded and packed to their liking. Among dozens of similar products it’s the only way then can compete on the shelves.
KushCo Holdings, Inc. (OTC: KSHB) is well-positioned to take advantage of those expectations, as they are already the top supplier of packaging solutions to the U.S. cannabis industry. Their vaporizer cartridges, tubes, pop-top bottles and containers of various sizes are already carrying dried flower and processed cannabis coming from the biggest growers. KushCo is not alone on the market, but their expertise and broad relationships have elevated them to the position of the go-to source for packaging solutions aimed at cannabis businesses of all sizes.
As long as there is a product to pack, KushCo is going to sustain its business as it’s not directly dependent on the ups and downs of the marijuana market. After acquiring Zack Darling Creative Associates, the company is ready to provide additional branding, marketing and e-commerce solutions to the cannabis industry, thus establishing new revenue streams.
Take me home, pot pre-rolls
Between packaging and a clients shedding their hard-earned money on hemp and marijuana products lies a logistic challenge. Even if laws are relaxed and cannabis gains on acceptance, transporting it still remains a controversial topic. The number of distribution companies specialized in transporting the final products is limited, which makes the few existing ventures interesting from an investor’s perspective.
Just as KushCo dominated the packaging business, Origin House (CNSX: OH) is a leading distributor of marijuana products in California. The company distributes over 50 brands to most of dispensaries in the state. Since California is poised to generate almost 1/4 of worldwide cannabis sales by 2022, Origin House is going to have their hands busy.
Thanks to the immense market knowledge acquired in the process of distribution, Origin House has a good grip on what sells on the cannabis market and what does not. It allowed them to successfully include their own brands in the distribution line which progressively become their main source of income.
This trend reflects the fact that the most successful companies in the marijuana sector are the ones with broad market expertise, who can leverage it to make calculated investments in other cannabis ventures.
