The landscape of the cannabis industry has changed, and investors are no longer primarily focused on the opportunity in Canada. This is a transition that investors need to be aware of and during the last year, we have seen significantly more investor interest in the opportunity in the United States as well as in South America and in Europe.
We have been closely monitoring the cannabis opportunity in these markets and have been keeping an eye on the companies that are levered to these markets. When looking at the companies that are actually executing on these markets, the list is pretty long. However, if you look at the list of companies that are focused on both markets, the list is much shorter, and we want to highlight one of these companies.
The company, Next Green Wave Holdings Inc. (CSE: NGW) (NXGWF) is in the early innings of a major expansion and is an opportunity that we are bullish on. During the last year, the company has significantly expanded its reach and has attractive leverage to the cannabis opportunity in California and Colombia. Over the next year, we expect to see the company significantly expand its reach in these markets and expect them to be major value drivers for the overall business.
Next Green Wave is a vertically integrated seed-to-sale premium medical and recreational cannabis company that is focused on the California market. The company’s first state-of-the-art indoor facility is 35,000 sq. ft. and is now entering the production phase of its growth strategy. The California cannabis company plans to significantly expand its reach on the 15-acre property which is zoned for the production of cannabis.
We have been highly focused on the California cannabis market and have been the most excited about companies that represent differentiated opportunities, that have significant growth prospects, and that have an attractive valuation. We are of the opinion that Next Green Wave possesses these traits and represents an opportunity that is underappreciated.
During the last year, Next Green Wave has been able to significantly improve its growth prospects through a series of acquisitions and we will monitor how the team is able to execute from here. One of the exciting aspects of this story is related to the company’s leverage to the Colombian cannabis market and we believe that this asset could prove to be a major value driver over the next year.
One of the ways that the California cannabis company has been able to differentiate itself from its peers is through the creation of a massive seed library that has more than 120 strains that include several award-winning genetics and cultivars. Over the next year, we expect to see Next Green Wave further advance its story and expect
Reports Critical Milestone for the California Market
Last month, Next Green Wave announced a critical milestone in its plan to capitalize on the California cannabis market and reported to have obtained an occupancy permit from the City of Coalinga for its first state-of-the-art indoor production facility. The granting of the permit means that the company is now authorized as a licensed cannabis producer and has moved more than 10,000 plantlets to activate its growth cycle.
When looking at the most significant potential catalysts for growth, the granting of the occupancy permit ranks up there in order of significance and we are bullish on the growth prospects associated with this. After this permit was granted, Next Green Wave immediately commenced its cultivation program and received its first plantlets to accommodate a perpetual harvest cycle that is comprised of approx. 50 yields per year. The state-of-the-art production facility comes equipped with 14 climate-controlled flowering rooms which are expected to produce an average of 9,150 pounds of cannabis flower annually.
Over the next year, we expect this facility to prove to be a major value driver for Next Green Wave and will monitor how the team is able to execute on this. The raw material and biomass that is produced from this facility will be used for extraction for the creation of downstream consumer products (i.e. oils, waxes, tinctures and extracts for custom vaporizer products) that are associated with the company’s WEARESDC partner brands and other licensed cultivators in the wholesale supply-chain.
SDC Acquisition Should Quickly Prove to be Accretive
In March, Next Green Wave executed a definitive agreement to acquire SDC Ventures and we continue to monitor this part of the story. SDC is a premium cannabis consumer products goods, manufacturing and extraction leader, having 8 leading cannabis brands with 45 CBD and THC products that have a combined global social influencer reach of over 25 million people and with 100+ million YouTube views.
SDC (WEARESDC) is a team of brand building, cannabis consumer product goods, manufacturing and extraction professionals, that have decades of experience in cannabis in California. SDC has a growing network of retail and online sales channels including 700 Zumiez stores which compliments Next Green Wave’s current distribution opportunities. We believe that this asset will quickly prove to be accretive and will monitor how the team is able to advance this aspect of the story.
When looking at how this acquisition will impact Next Green Wave, there are a number of factors to look into. First, SDC provides access to several premium cannabis brands that are associated with world-renowned influencers to help penetrate global markets. Second, SDC enhances the existing distribution by providing increased distribution at the dispensary level and the consumer level. Finally, the acquisition provides access to strategic relationships and specialty extraction methods.
We believe that the opportunity that Next Green Wave has to market through strategic brand partners to millions of validated and loyal followers is significant and we believe that the market has not assigned much value to this. Over the next year, we are of the opinion that the cannabis brands will be the next major focus and are favorable on the leverage that Next Green Wave has to this opportunity.
SDC’s selection of exclusive licensing relationships are defined by their connection to a core loyal global audience, their reach across digital media and social media platforms, and their ability to partner on product development and marketing. By partnering with strategic brands, SDC has been able to generate significant traction in California as well as other emerging cannabis markets across the globe. Their strategic brand relationships include: Carey Hart, Loki the Dog, King Louie, Sketchy Tank, Junkyard LA, Toy Machine Skateboard, SD Cannabis, OSS, and Thorn Str. Beer.
Colombia Represents a Massive Cannabis Market
One of the ways that Next Green Wave has been able to differentiate itself from the competition is through its focus on strategic markets. The company is one of the few cannabis businesses to have legitimate leverage to the opportunities in North and South America and we are favorable on this.
Shortly after the SDC acquisition was reported, Next Green Wave announced the signing of definitive agreements pertaining to its previously announced agreement to make a strategic investment in Organic Medical Growth OMG3 INC. (OMG), which is focused on producing and commercializing CBD products derived from medical and industrial cannabis in Colombia.
OMG is positioning itself to become a lowest cost producer of premium cannabis in Colombia and we are excited about this opportunity. OMG’s wholly owned subsidiary, Proymed S.A.S., is a medical cannabis company that is focused on producing and commercializing non-psychoactive CBD products derived from cannabis. Proymed is also finalizing its transformation and psychoactive licenses for THC products in Colombia as well as finalizing international distribution agreements.
We have been bullish on the Colombian cannabis market due to the attractive economics associated with cultivating cannabis. We believe that OMG represents a strategic partner and will monitor how the company is able to execute on this opportunity. Through OMG’s current distribution channel of 7,300 pharmacies, Next Green Wave has the opportunity to license its collection of brands and products into the Colombian market. We are favorable on the growth prospects associated with the Colombian cannabis market and are of the opinion that it could prove to be a major value driver for Next Green Wave.
Following the signing of the initial agreement, OMG formed a joint venture with Cannabolland Cluster S.A.S, a vertical biotech cluster based in Colombia that groups companies with cannabis licenses with the goal of structuring the companies, consolidating the licenses, providing technical knowledge and infrastructure. According to the agreement, OMG has access to the planned production of cannabis on 5,000 hectares with the possible extension of the cultivation licenses to the geographical area of the cluster (up to 12,000 acres). The six companies within Cannabolland, that include 2,500 associated growers, have 3 psychoactive (THC) and 3 non-psychoactive (CBD) licenses, as well as 2 transformational (extraction) licenses.
In collaboration with its strategic and distribution partner Ortix S.A.S, OMG is working on the launch of 9 cannabis-based topical products under the OMG brand. The first two products from the OMG portfolio in Colombia will be distributed across Ortix network of 7,300 stores within the next 60 days. We are bullish on the growth prospects associated with this and will monitor how it adds value to the overall business.
OMG is actively pursuing a go-public transaction and focusing on becoming a significant producer and supplier of medicinal cannabis products and services in Colombia. OMG is positioning itself to become one of the lowest costs, high-margin businesses operating in Colombia and this represents a major opportunity. If the company completes a go-public transaction, Next Green Wave should benefit from this in the form of price appreciation and we are favorable on OMG’s plan to create value.
We are favorable on the investment in OMG and will monitor how the companies work to create value for each other. In consideration of the common shares being issued from OMG, Next Green Wave will collaborate and provide commercial strategic support to OMG through a license and service agreement that includes the following:
- Adopting of nursery, cultivation and manufacturing techniques that will enable OMG to produce high quality cannabinoid oil through large scale production and in compliance with GMP standards
- Planning and designing the necessary infrastructure for its outdoor and indoor facilities
- Licensing of Next Green Wave’s medical consumer product goods and brands across OMG’s entire distribution network
An Opportunity with Massive Visible Growth Prospects
Over the next year, we expect to see Next Green Wave significantly advance its fundamental story and we are bullish on the growth prospects associated with this. From California to Colombia, the company has several major potential catalysts for growth, and we believe that the market does not appreciate this aspect of the story.
One of the most attractive aspects of the Next Green Wave story pertains to the amount of distribution that it already has in place. Distribution is one of the most important areas for a company to be focused and we are favorable on the success that Next Green Wave has had when it comes to this side of the business. The company plans to sell its products throughout the state and contract high quality licensed producers and processors that do not have a distribution license to package, market, transport and sell their respective products through its wholesale and retail network.
Going forward, the name of the game is execution and we are of the opinion that Next Green Wave is well positioned for this. With Pacific Gas & Electric (PG&E) completing the power installation at the California facility in April, the company’s state-of-the-art facility can sell products to the California market and this represents a massive opportunity.
California is the world’s largest cannabis market, and this is an area that we have been excited about. Having leverage to this cannabis market is significant and we are monitoring how the team is able to capitalize on it. Next Green Wave has been working tirelessly in order to be in a position to gain market share in this burgeoning cannabis market and we believe that the market does not fully appreciate this.
Next Green Wave is led by a management team that has been laser focused on execution and we find this to be significant. When investing in a cannabis company, you are really investing in the management team and you want to be focused on a team that is working to create value for shareholders.
We continue to closely follow Next Green Wave and investors should be watching this emerging opportunity. To learn more about the company, please email email@example.com.
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