GrowGeneration Corp (OTCMKTS:GRWG) has announced the acquisition of assets situated in Warwick, Rhode Island belonging to East Coast Hydroponic Warehouse, the biggest hydroponics retail outlet in East Coast. After the transaction GrowGeneration expects its revenues to increase by approximately $5 million.
East Coast Hydroponic Warehouse currently possesses retail and warehouse space measuring more than 10,000 square feet and services growers from various states including Vermont, New Hampshire, New York, Maine and Massachusetts.
Expansion in key markets
The acquisition is part of a plan by GrowGeneration Corp to purchase hydroponic stores that lead in key markets. Currently New England market consists of New Hampshire, Vermont and Massachusetts, all of which are adult-use markets. Medical markets are Maine and Rhode Island. By 2020 the market for legal cannabis in New England is expected to reach a figure of more than $2 billion per New Frontier Data.
“The company (GrowGeneration Corp) believes that, with this acquisition, it can increase sales through market penetration into the adjacent states of Massachusetts, Maine, Vermont, and New Hampshire … The company anticipates expanding its US model into Canada in 2018,” said the co-founder and chief executive officer of GrowGeneration Corp, Darren Lampert.
As an owner and operator of organic gardening and specialty retail hydroponic stores, GrowGeneration currently possesses 15 retail outlets of which nine are located in the state of Colorado, two in the state of California, two in Las Vegas, Nevada and one each in Washington and Rhode Island states.
The acquisition of East Coast Hydroponic Warehouse’s assets by GrowGeneration Corp comes less than a fortnight since the latter appointed Sean Stiefel to its board. Stiefel is a portfolio manager and managing partner at Navy Capital which he founded four years ago. Navy Capital is a hedge fund focusing on investments in the medicinal and adult-use cannabis sectors.
Prior to starting Navy Capital, Stiefel was a trader and research analyst at global equity fund Northwoods Capital Management Partners. He had also worked as an associate at Millennium Partners as well as trading analyst at Barclays Capital. In a financing round held recently Navy Capital participated and $9 million was raised in convertible notes.