A slate of new legal markets came on the scene in 2018, further bolstering the potential of the North American cannabis sector. As regulations in Canada and the USA continue evolve, multistate operator (MSO) companies with capital in hand, expertise, and crucial infrastructure will be the first to cash in on the pot bonanza.
One attention getter in this space is Crop Infrastructure Corp. (OTC: CRXPF / CSE: CROP) who, invest in, construct, own, operate, and leases greenhouse facilities in California, Nevada, and Washington. The company was incorporated in 2011 and is headquartered in Vancouver, Canada., an elite among the up and coming MSO group with blockbuster potential. The numbers tell the story for CROP, but it’s important to get a view of their impressive developments, because this is what truly separates them from the pack.
Crop Infrastructure Corp. (OTC: CRXPF / CSE: CROP) invests in, constructs, owns, operates, and leases greenhouse facilities in California, Nevada, and Washington. The company was incorporated in 2011 and is headquartered in Vancouver, Canada.
CROP is a potentially undervalued multistate operator (MSO), operating in three major legalized markets: California, Nevada, and Washington with deals in place that could lead to an even wider footprint.
In Nevada, CROP recently purchased a 1,000-acre Nevada cannabis farm with a newly awarded recreational cannabis license, with the potential to grow yields in excess of 80,000 pounds. It is developing the ONLY major outdoor farm in Nevada for the purpose of extraction and the largest licensed recreational cannabis farm in the United States.
Phase 1 development is set to cover nearly 1.73 million square feet of outdoor cannabis cultivation, and 60,000 square feet of greenhouse on the 1,000-acre cannabis farm. Phase 2 is designed to triple the size and output of the farm, with the addition of over 5.2 million square feet, including an additional 120,000 square feet of greenhouse.
Just to give you a broader picture, let’s review what CROP is up to broken down by their current projects:
NEVADA – Crop Infrastructure Corp. (OTC: CRXPF / CSE: CROP) this year is planting over 1350 acres of high CBD hemp on its 2,200 acre Nevada Farm, about 10,000,000 High CBD hemp plants. In a move to advance its assets CROP already announced it has secured a 3-year, 1.5 million-pound CBD biomass supply agreement in the US worth approximately $80,000,000 —depended on CBD content. The company is now focusing on allocating 2019 CBD Isolate supply agreements both domestically and internationally.
WASHINGTON – In Washington State, CROP already has two greenhouse projects; both located in Grants County with some 35,000 square feet of planted and operating space and another 44,000 square feet under construction. Both properties are full scale growing operations with the ability to produce over 12,000 lbs this year.
CALIFORNIA – In California, CROP is developing its Humboldt Farms operation and has also worked its way into the retail California cannabis retail space through the acquisition of its Emerald Heights retail chain, with locations in San Bernardino and West Hollywood.
As of late 2018, the farm was flowering 10,000 square feet of canopy for a late stage harvest and is working on the permitting for its 2019 expansion, including a proposed 30,000 square feet automated greenhouse facility.
Crop Infrastructure Corp. (OTC: CRXPF / CSE: CROP) has also signed a toll processing agreement with a California manufacturing company to produce oils, crumbles, and distillates for sale in the California market. The raw material will be finished cannabis from CROP’s Humboldt County farm where the cannabis is awaiting sale, being trimmed or drying.
In addition, a distribution agreement is now in place for the cannabis which will be sold under the company’s Hempire brand for estimated gross revenue of approximately $1,600 per pound of flower. The farm has allocated 750lbs of inventory to be sold under the Hempire brand.
The distributor with offices in Oakland and Orange County has a distribution network that consists of approximately 350 licensed cannabis stores across California.
CROP has also developed a portfolio of 16 Cannabis brands, including Canna Drink, a cannabis infused functional beverage line and secured US and Italian distribution rights to over 55 cannabis topical products.
In Oklahoma, CROPs Hempire received a Cultivation and Extraction License. Hempire Oklahoma has been issued Medical Cannabis Cultivation and processing licenses at its 1 acre location in Purcell, Oklahoma where the company will focus on high grade flower and extraction. This is a separate location to the company’s 20-acre property that is currently being readied for planting for the 2019 season.
The management of CROP infrastructure has a clear vision for the way forward in this increasingly crowded sector.
“Our unique, high CBD strains will position CROP as a low-cost and high-quality pure CBD provider, both domestically in North America, and throughout the European market,” states CROP CEO Michael Yorke. “The joint venture’s CBD products will be branded under the XHemplar and CROP brands Tiffany CBD and Hempire Italia.”
Comparison to Major MSOs
Aurora Cannabis Inc.
Market Cap: ~$6.765 billion
Despite not yet officially having any assets in the USA, news of the US Farm Bill was significant for Aurora Cannabis. The massive grower has been aggressively expanding its international footprint, including purchasing the largest organic hemp company in Europe, back in September 2018, and Mexico’s Farmacias Magistrales which distributes to 80,000 retailers and 500 pharmacies and hospitals in Mexico.
In a late 2018 earnings call, Chief Corporate Officer Cam Battley pointed at his company’s growing large presence in the CBD space, signaling Aurora is embarking on a CBD-focused strategy that covers the entire value chain from supply through genetics, research and clinical trials to produce and distribute products to multiple international markets.
Green Growth Brands Ltd.
Market Cap: ~$872.757 million
After making a bold statement with its hostile takeover bid of Aphria, newcomer Green Growth Brands didn’t stop its acquisition spree. Led by a team of retail experts, GGB has amassed a portfolio of dispensaries, including its flagship The Source stores, and a handful of cultivation licenses/sites.
Through relationships formed by CEO Peter Horvath’s experience to-date, the company recently announced a deal to sell its Seventh Sense CBD-infused products in DSW locations (a company in Horvath’s extensive history). The company has a footprint in multiple states, including Nevada and Massachusetts.
Cannabis MSOs are either large enough to muscle their way into each major market as they arise, or wise enough to get in at the beginning and setup operations before the crowd. While many of our comparables are the former, we’ve chosen to focus on CROP Infrastructure Corp. (OTC: CRXPF / CSE: CROP), which falls into the latter category.
American News Group
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