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TransCanna Holdings Continues To Enhance Its Position In California via Acquisitions

Jun 4, 2019 • 11:25 AM GMT+0000
6 MIN READ  •  By Anthony Varrell
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Last month, we published an article on TransCanna Holdings Inc. (TCAN.CN), a leading California cannabis company, and hope that you have been following this emerging opportunity.

2019 has already proven to be a banner year for TransCanna and we are not even halfway through the year. Over the next year, we expect the California cannabis company to record massive growth and this is an opportunity to be watching. Through a series of acquisitions, TransCanna is well positioned to capitalize on the California market and this is an opportunity that we are excited about. California is the world’s largest cannabis market and TransCanna is well positioned to be a leader in this market.

When looking at TransCanna, we see a company that has massive potential catalysts for growth, and we will monitor how the team continues to execute. Today, we have issued an update on the company and if you want to learn more, please email support@technical420.com.

Enhancing Its Position in California via Acquisitions

Last week, TransCanna Holdings executed a non-binding letter of intent (LOI) to acquire the business and assets of California-based Lyfted Farms, a licensed producer of premium cannabis that owns permanent state licenses for cultivation (nursery), cultivation (grow), and distribution.

Lyfted Farms is a well-known California cannabis brand that has been generating significant revenues and we are bullish on the growth prospects associated with this transaction. With access to more than 50 unique cannabis strains, the company is an ideal acquisition candidate for TransCanna as it offers access to a portfolio of premium branded products and we will monitor how the team is able to advance this business.

One of the biggest issues that Lyfted has faced is related to the amount of space that it has to produce cannabis. The acquisition by TransCanna would solve this need and would provide the space that is required to scale the brand. Currently, Lyfted is the top selling brand in the largest dispensaries in the area and this bodes well for future growth. TransCanna has been focused on acquiring leading cannabis brands and we are monitoring how the team is able to execute on this one.

Less than a week before announcing a LOI to acquire Lyfted, Transcanna Holdings executed a non-binding LOI to acquire the branding asset package of California-based Tres Ojos Naturals, d/b/a SolDaze. This agreement will enhance the company’s leverage to the California cannabis-infused product market as SolDaze produces cannabis-infused fruit snacks.

TransCanna analyzed more than 100 branded products in California before it landed on SolDaze and we are favorable on the due diligence that was conducted prior the announcement. The cannabis-infused product market in California represents a multi-billion-dollar opportunity and we are bullish on the leverage to it. TransCanna took a deep dive into the company to better understand its SKU velocity, the revenue trend, and the way that the products are differentiated from what is currently available, before it made a decision and we are favorable on these categories.

Although the California cannabis-infused product market represents a massive opportunity, there is a ton of competition in this space and it is important for a company to offer a differentiated product. We have spent a lot of time analyzing this cannabis market and believe that TransCanna is focused on an area of the cannabis-infused product market that is not overly saturated. We find this focus to be significant and expect it to play a key role in the long-term success.

During the last year, SolDaze has recorded strong demand for its fruit-based, organic product line and it understands that it needs to expand in order to remain competitive. TransCanna offers SolDaze a platform to expand at its 196,000 sq. ft. facility and provides the necessary capital for immediate growth. We are bullish on the growth prospects associated with the increased scale at TransCanna’s state-of-the-art facility and will monitor how the team is able to execute on this.

Shortly before the SolDaze LOI was reported, TransCanna executed a non-binding LOI with Persuasion Brewing to create a division within TransCanna’s 196,000 sq. ft. facility to establish a Persuasion Brewing division, which will produce a variety of different CBD infusion non-alcoholic beers. During the last year, we have noticed a major increase in the interest in cannabis-infused beverages and this represents a significant opportunity for the company.

Under the terms of the LOI, TransCanna has the exclusive right to the private labeled beers that are created at the facility. The LOI also includes a three-year commitment from Persuasion where the compensation is related to the services rendered (to be determined based on a percentage of sales to dispensaries). TransCanna also agreed to pay to have the necessary equipment, including the canning and bottling lines, installed at the facility and we will monitor how this relationship evolves from here.

One of the reasons why we believe that TransCanna represents a strategic partner is due to its facility being perfectly designed to have a comprehensive bottling and canning line for multiple types of beverages. The company will initially focus on producing a non-alcoholic CBD-infused beer because it believes that it will be the least expensive to get off the ground and will be the easiest to scale. Once TransCanna has received the necessary licenses, it will make this a major focus of the business and we are bullish on how this differentiates the business.

TransCanna is supplying the facility, capital, software, distribution and marketing platform, while Persuasion Brewing will supply the intellectual property and knowhow to create a premium CBD-infused non-alcoholic beer. The existing brewery is only a five-minute drive to TransCanna’s facility and this makes the logistics of moving equipment and staffing much easier.

A Growth Opportunity to be Watching

In early May, TransCanna announced plans to strengthen its balance sheet and appointed Haywood Securities to act as lead agent on behalf of a syndicate of agents for a $10 million private placement offering at $5 per share. The company plans to use the net proceeds for equipment and capital expenditures, additional acquisitions, and for working capital and general corporate purposes.

This offering will provide TransCanna with the necessary capital to execute on the previously announced acquisitions and we are bullish on the growth prospects associated with these transactions. The California company has been able to benefit by being able to use its stock as a currency to make acquisitions and we expect to see additional transactions with a similar structure reported later on this year.

TransCanna has been quietly building a leading California cannabis company and we are favorable on the growth prospects associated with this. We would not be surprised if we saw the company expand into additional markets in the United States and believe that this could be a major catalyst for the business. TransCanna is a company that has significant catalysts for growth, and this is an opportunity to be monitoring.

 

 

 

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.

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Authored By

Anthony Varrell

Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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