Canadian producer 48North Cannabis Corp.
Rare Industries is based in Portland, Oregon, and it produces a low-dose cannabis vape pen brand called Quill. It has retail listings in Oregon and Washington, and it plans to expand into California and Nevada in the near future.
The firm does not produce, extract, or distribute cannabis. It creates unfinished, branded vape pens and sells them to licensed processors, who fill the hardware with cannabis extracts and sell the pens to retailers.
It is also working on a new vape pen specifically designed for hemp-based CBD extracts.
48North plans to sell the Quill pens in Canada, and use Rare Industries’ distribution channels to sell its branded portfolio in the U.S.
Alison Gordon, co-chief executive of 48North, said she recognizes the importance of entering the burgeoning U.S. market. “I believe that authentic brands and next-generation products distributed at scale, particularly in the emerging U.S. market, will be one of the major keys to success in the cannabis industry,” she added.
It is paying US$641,000 in cash and the rest in common shares to get the deal done. 48North will also pay a conditional earn-out in Common Shares based on overall operating performance of Quill in 2019 and 2020 up to USD$3.15 million.
Earlier this month, Toronto-based 48North delivered its first order of recreational cannabis to the Ontario Cannabis Retail Store for sale and it made a $1.25 million strategic investment in Friendly Stranger.
This week, trader Tomasz Lang laid out the reasons why he believes 48North is primed and ready to grow in his article for Capital10x readers. Lang, who holds a long position in the firm, said its status as the original outdoor grower leaves it well placed to capture market share from the illicit market, because it can sacrifice price in exchange for market share while maintaining a competitive margin against its peer group, ultimately yielding a profitable cannabis company.
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