Hydroponic Cultivation Supply Business Dramatically Increasing as Global Cannabis Industry Explodes

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Nov 01, 2018, 08:55 ET

PALM BEACH, Florida, November 1, 2018 /PRNewswire/ --

FinancialNewsMedia.com News Commentary

Now that the legal marijuana and global cannabis markets have exploded, a spotlight is shining bright on the cultivation and growing services segment of the industry, that includes Hydroponic systems and accessories. Hydroponically grown plants grow up to 50% faster and produce higher yields of better quality solution for growing plants in a nutrient-rich water base as opposed to soil. Leaders in the industry are aggressively marketing innovative equipment to cannabis cultivators, as well as opening storefronts across the country in legal states. Cannabis growers have been using different hydroponic methods for many years as a way to maximize yields and speed up growth, the two main advantages of soilless growing which today is generating huge opportunities in the cannabis growing industry. Active Companies from around the market with current developments this week include: Sugarmade, Inc. (OTC:SGMD), Medical Marijuana Inc. (OTC:MJNA), Real Brands Inc. (OTC:RLBD), Cannabis Science Inc. (OTC:CBIS), HEXO Corp. (TSX:HEXO) (OTC:HYYDF).

Sugarmade, Inc. (OTCQB:SGMD) BREAKING NEWS: Sugarmade today announces the signing of a binding Definitive Agreement to acquire Sky Unlimited, LLC, which through its AthenaUnited.com operations and website offers multiple popular hydroponic brands to several growing agricultural cultivation sectors. As a result of this acquisition, Sugarmade is raising its revenue guidance for calendar 2019 from $30 million to $70 million. Sugarmade expects this acquisition to be highly accretive to common shareholder value.

Under the terms of the Definitive Agreement, Sugarmade will assume all operations, brand assets, customers and liabilities of Sky Unlimited, and will retain all employees. Sugarmade will issue the owners of Sky Unlimited ten million non- refundable shares of Sugarmade common stock in exchange for a non-shop period agreement, during which final due diligence will be completed. Subject to a successful two-year audit of the Sky Unlimited operations, Sugarmade will pay the owners a combination of cash and common shares equal to the audited revenues realized by Sky Unlimited during the 12-month period preceding the close of the transaction, which is scheduled for January of 2019. It is envisioned these payments of cash and Company shares will total $40 million, but the actual amount will be determined by the revenue performance of the acquired business operations. The specific details of the Definitive Agreement will be outlined in a subsequent filing with the U.S. Securities & Exchange Commission over the coming days.

"This acquisition will further boost our already very rapid growth rate and is expected to be high accretive to common shareholder value. As a result, we are once again raising our revenue guidance for calendar 2019," commented Sugarmade's CEO, Jimmy Chan. "Sky Unlimited and Athena are complementary to our existing business operations allowing us to not only increase our emphasis on brands, but also to diversify our revenue streams to now include the larger commercial cultivation operations."

The management teams of both companies are seeing a rapid evolution in the hydroponic and cultivation supply sector with the business moving away from the home and small operator and toward the significantly sized commercial cultivator. Sky Unlimited's operations are well positioned against this rapidly evolving trend with most of its revenues being derived from the wholesale market and via commercial operations. Mr. Chan continued, "We are seeing a clear trend in our particular sector of the cultivation supply business. Many of the smaller growers are being replaced by very large grow operations that are purchasing large amounts of products from a limited set of suppliers. Matching this trend is Sky Unlimited as commercial accounts are now over 50% of operations and still growing. Thus, we believe we are especially well positioned via this business combination. Sky Unlimited also sees strong benefits for its existing and future customers as the increased capitalization and lowered cost of capital will allow it to further expand its brands and to accelerate the development of new products and technologies." Read this and more news for Sugarmade at: http://www.financialnewsmedia.com/news-sgmd

In other industry developments and happenings in the market this week include:

Medical Marijuana Inc. (OTCPK:MJNA) closed Wednesday up 4.46% with a volume north of 8 million. The company also announced that its subsidiary Kannaway®, the first direct selling company to offer cannabidiol (CBD) hemp botanical products, has attracted new leadership to its Brand Ambassador base. The company is proud to announce that Gordon Oswald and Glade Poulsen have joined the company, both bringing their vast, decade-spanning successes in the direct selling industry to the team. Both of these new Kannaway® Brand Ambassadors will be working with Randy Schroeder. He has been a leader with Kannaway® for several years and has worked his way to earn Crown Ambassador Elite rank. He has been recognized numerous times for his dedication to educating others about Kannaway's® CBD hemp oil products. "There is no such thing as independent success in Kannaway. We achieve the most when we put our heads together and use our collaborative knowledge to find creative solutions," Schroeder said. "Gordon and Glade have a combined 50 years of experience in the direct selling industry and their efforts have helped generate over three billion dollars in product sales and distribution for some of the finest companies in the direct selling industry."

Real Brands Inc. (OTCPK:RLBD) recently announced it has terminated its agreement with Dragons Ltd, which granted Dragons, Ltd exclusive rights to commercialize CBD Pharmacy® branded products worldwide. Under the terms of this agreement, Real Brands will regain all rights to the CBD Pharmacy® trademark it owns for the existing vape cartridge business and all new CBD Pharmacy products worldwide. Real Brands, Inc. will also receive the sufficient inventory of CBD Pharmacy® branded vape cartridges to enable a smooth transition and ensure that retail customers will continue to have supply. "We believe that the CBD Pharmacy® trademark will develop faster and more efficiently under our direct efforts," said Jerry Pearring, CEO of Real Brands, Inc. "We have over 50 loyal retail accounts buying CBD Pharmacy Vapes in the South Florida market. And as a result of this agreement, we will ensure that the CBD Pharmacy® brand will receive all the support required to grow through new and established distribution channels for CBD products, which will include adding new SKU's and expanded geography that we believe will accelerate our growth in 2019."

Cannabis Science Inc. (OTCPK:CBIS) earlier this week announced receipt of Issued US Patent Number 9,763,991 For Compositions of Cannabinol (CBN) for Treatment of Various Neurobehavioral Disorders, Sleep Deprivation (Insomnia), Anxiety Disorders (ADHD), and Post-Traumatic Stress Disorders (PTSD), among other target indications. The invention relates to a composition for use in the treatment of neurobehavioral disorders utilizing various Cannabis plant extracts comprising Cannabinol (CBN) preferably with other constituents of this plant for such use and a method for the extraction of plants. The plants or plant parts may for instance be derived from Cannabis Sativa and/or Cannabis Indica and/or Cannabis ruderalis and/or other elements, and mixtures thereof. The plant extracts derived showed particularly beneficial effects against Sleeping Disorders, in particular Insomnia, Post-Traumatic Stress Disorder (PTSD), and anxiety disorders including Attention Deficit Hyperactivity Disorder (ADHD).

HEXO Corp. (TSX:HEXO.TO) (OTCPK:HYYDF) recently announced the closing of the acquisition of its interest in a large facility in Belleville, Ontario. This is the first facility that the Company has established outside of Quebec, further delivering on its national expansion strategy and allowing HEXO to create a centre of excellence for the development of advanced cannabis products. "Closing the transaction and acquiring our interest in this facility is integral to carrying out our hub and spoke business strategy," said Sebastien St-Louis, HEXO's CEO and co-founder. "The space can be scaled up based on our future needs and provides HEXO with the infrastructure it needs to continue partnering with Fortune 500 companies and to create category-winning cosmetics, edibles, vapes and more." The centralized location, conveniently located along primary shipping routes in Ontario, will allow HEXO to process and distribute cannabis-based products to fulfil its commitments across Canada.

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