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Marijuana

GrowGeneration Corp (OTCMKTS:GRWG) Acquires The Assets GreenLife Garden Supply’s Assets And Adds Revenues Of $7 Million

GrowGeneration Corp (OTCMKTS:GRWG) has taken over the assets of England based GreenLife Garden Supply. The recent takeover adds revenues of $7 million to the company. Following the takeover, GrowGen is well positioned to service customers in New Jersey and New York. The company is expected to benefit a lot as these states are actively considering the legalization of adult use marijuana.

GreenLife is one of the highest and biggest volume of hydroponic chains in England. Sean Reardon, the founder of GreenLife, will continue in the role of the executive (sales and business development) for GrowGen.

The takeover allows GrowGen gets access to 5 warehouse and retail locations and service more commercial cultivators in New England. It already serves home and commercial growers from the existing 21 locations.

Marijuana market

The market for marijuana in Maine is expected to reach $325 million by next year. Maine is on track to open the market for adult use marijuana by the end of 2019. The state is framing rules for adult use marijuana.

Massachusetts has a hundred recreational business licenses. The sales of recreational marijuana are estimated at $100 million.

The annual revenues of recreational marijuana are expected to reach $300 million. Nearly 1.3 million people in New York could get access to the legal market, and the state could generate tax revenues of up to $677.7 million.

The annual sales of recreational marijuana in New Jersey are expected to reach up to $1.5 billion by the year 2023, according to Marijuana Business Daily. The state has 9 million people and expects 100 million visitors every year and creates a robust market for legal marijuana.

Growth prospects

GrowGen, which is one of the fastest and largest growing chains of hydroponic garden centers, has achieved consistent growth through the aggressive inauguration of new locations and acquisitions.

The company also operates the business through 5 wholly owned subsidiaries. GrowGeneration Canada Corp., the first subsidiary of GrowGen, expands business operations in Canada.

GrowGeneration Management Corp is its second subsidiary and has a team of ten commercial experts.

GrowGen has improved the performance in Q1 2019.  It has recorded 200% increase year on year and a 50% increase when compared to the previous quarter. Heavy Gardens, the newly purchased e-commerce store, has contributed to the revenues of $700,000.

 

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Business

East Coast Hydroponic Warehouse’s Assets Acquired By GrowGeneration Corp (OTCMKTS:GRWG)

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.

Retail stores

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.

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