(Image via TransCanna Holdings)
When the market is low, it’s time to grow.
It’s a piece of age-old investment wisdom that has been stated in many different ways, yet it constantly rings true. Down markets are hard on both companies and people, but they also offer the best possible opportunity to grow share and make acquisitions.
With the cannabis sector looking to recover from its own downturn over the last six months, a lot of opportunities have been presented to expand in the industry. If a company played its cards right, it could seize on the chance to grow its footprint and consolidate strong brands in the industry at the same time.
That’s what the past few months have looked like for
TransCanna Holdings Inc. (CSE:TCAN, OTC:TCNAF, Forum). Stockhouse has previously covered the vertically integrated Canadian cannabis company’s stronghold in California, complete with the largest cannabis facility in the state.
TransCanna has steadily been solidifying its stronghold in the massive California marketplace. The Company’s goal was to create a closed loop business that grows exponentially, and it has been positioning for rapid growth in the sector with several carefully selected acquisitions. Over the past weekend, the Company made another major move.
On Nov. 1, TransCanna announced the signing of a
definitive purchase agreement with
Lyfted Farms, a move that has been in the making
since May of this year. The deal sees TransCanna acquire one of California’s premier cannabis producers, as Lyfted has developed multiple award-winning brands since its inception in 2016. Lyfted is located very close to TransCanna’s Daly building in Modesto.
Steve Giblin, CEO of TransCanna, commented to Stockhouse Editorial on the quick integration of Lyfted into the Company:
“The greatest asset we are acquiring is the talent and depth of Lyfted's management team. The Lyfted team is working in concert with the SolDaze and Daily teams from our previous acquisitions, which immdeiatley increases the scale of our operations. Acquiring a fully licensed operator with a strong management team that can manage the build out and future operations of our Daly facility is a great strategic move for the company. We welcome Bob Blink and his team to TransCanna and we appreciate their vote of confidence by significantly increasing their share position in our company.”
(Image via TransCanna Holdings)
As the CEO’s statement illustrates, TransCanna has been very busy over the last few months. On Sept. 19, the Company
completed the acquisition of another California company,
SolDaze.
Stockhouse covered the massive portfolio boost this deal gave TransCanna, with SolDaze producing a leading brand in the exploding cannabis edibles marketplace.
That’s on top of the Company’s announcement on Apr. 23 of
acquiring another cannabis brand,
Daily Cannabis Goods. The brand consists of high-quality pre-rolls and has consistently increased in sales since commencing in August of 2018, going from first month shipments of 2,100 to December shipments of 10,000.
Combining all the moves illustrates that TransCanna has a clear path in mind. By focusing on acquisitions with solid brands, followings, and existing revenues, the Company is looking to establish a strong brand strategy in a massive cannabis marketplace with notoriously loyal consumers. It’s also operating in California,
already the largest cannabis market in the US and slated to grow significantly further in legal sales.
Likewise, by consolidating its resources, TransCanna is shaping up to be a lot more than the sum of its parts. As part of the Lyfted acquisition, the Company also stated that it is looking to ramp up production capacity in its 196,000 square foot facility in Modesto, California. By themselves, the acquired products have already performed impressively, but with the resources of large and scalable infrastructure to power them, each can grow exponentially in reach.
In a
recent podcast interview with Stockhouse Editorial, TransCanna’s Chairman Arni Johansson reiterated that the Company is carefully selecting acquisitions that make sense for growth. The strategy has been to look for teams that complement each other and gel together, and initial rounds of feedback from the integration has been stellar.
Further, Johansson touched on what the Company is focused on now: execution. The management team knows that cannabis investors are knowledgeable and are looking for companies to follow through on their ambitions. With TransCanna’s acquisitions solidly aligning with its vision of a closed loop, vertically integrated cannabis operator, the push to deliver is clearly underway.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.