Halo Expands Branded Products & Launches Hemp CBD Products
April 24th, 2019
App, Exclusive, News, Top Story
The cannabis industry is projected to reach $146.4 billion by 2025, according to Grand View Research, driven by the legalization of recreational cannabis across a growing number of states and countries. While there are many different opportunities in the space, there are only a handful of companies that have proven their ability to generate significant revenue, maintain attractive margins, and successfully expand their business.
Halo Labs Inc. (NEO: HALO) (OTC: AGEEF) (FFT: A9KN) has built a strong presence in Oregon, Nevada, and California where it provides white label and branded cannabis concentrates and distillates. Over the past couple of weeks, the company has begun expanding its footprint in terms of both geographic locations and product categories. Investors may want to take a closer look at the stock given these potential catalysts ahead.
In this article, we will take a closer look at the company’s two-pronged growth plan in greater detail and why investors should pay attention.
Expansion in California
California’s cannabis industry has experienced tremendous growth following the legalization of recreational cannabis last year. According to Arcview Market Research and BDS Analytics, the state’s cannabis market is projected to reach $5.1 billion by 2019 and $25 billion by 2026. There were some hurdles to overcome in the early rollout of the state’s cannabis regulations, but these issues are being actively resolved over the past several months.
Halo Labs recently announced the launch of its branded products including the innovative DabTab across Southern California. While the company already provides bulk and white label cannabis oils and concentrates across the state, the new agreements with C4 Distro could generate higher margin revenue than white label and wholesale products. The company’s portfolio of branded products have already been very successful across Nevada and Oregon.
“California’s retail dispensaries are a large opportunity for Halo’s branded product lines,” says Halo Labs Chief Revenue Officer David Orr in the press release announcing the move into California. “Our branded product lines already are sold in approximately 250 dispensaries in Nevada and Oregon. It’s my belief that the California’s cannabis consumers will also embrace our product offerings.”
Launching Hemp CBD Products
The cannabis industry may be experiencing significant growth, but perhaps even more notable is projected growth in the non-psychoactive hemp-based cannabidiol (CBD) products space. The recent passage of the US Farm Bill has essentially greenlighted CBD extracts from industrial hemp which may be imported and exported across state lines. These extracts are also already legal in many different countries where psychoactive cannabis isn’t available. According to the Hemp Business Journal, the hemp-based CBD market will grow from $390 million in 2018 to $1.3 billion by 2022, representing a 27.2 percent five-year compound annual growth rate. Brightfield Group projects CBD products to grow rapidly from $594-million (U.S.) in 2018 to $22-billion (U.S.) by 2022 representing a 147-per-cent compound annual growth rate during the time period.
To capitalize on this growth in a closely adjacent product line, Halo Labs recently announced a binding letter of intent to acquire a purpose built hemp processing facility in Southern Oregon to expand production capabilities into manufacturing CBD isolate and distillate. The initial buildout will be at least 7,500 sq. ft. purpose-built for processing hemp with capabilities to expand to 10,000 sq. ft. over time. Management anticipates that production will begin in Q3 2019.
“This is a great opportunity in a rapidly-growing market which is complementary to our core extraction competencies — manufacturing cannabis isolates and distillates,” says Halo Labs Chief Revenue Officer David Orr. “Coupled with our current and developing business-to-business and white label customer relationships, the Oregon-based hemp facility could potentially unlock significant revenue in the hemp-derived CBD products space for Halo.”
Halo Labs Inc.’s (NEO: HALO) (OTC: AGEEF) (FFT: A9KN) recent efforts to expand its branded products into California and introduce new hemp-based CBD concentrates and distillate could help expand revenue and margins over the long run. Investors may want to take a closer look at the stock given the diversification and expand into new markets, as well as the potential catalysts ahead for the stock.
For more information, visit the company’s website at www.halocanna.com.
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