High Hampton: Consolidating California’s Market with Edibles Acquisition
April 25th, 2018
Exclusive, News, Top News
Most people think of flower when imagining someone consuming cannabis, but non-flower products represent the fastest growing segments of the market. While many companies are focused on scaling up cannabis cultivation or launching vaporizer products, investors may want to pay close attention to those that are building up a presence in the edibles segment of the market that is often ignored, but could see the fastest growth rates.
High Hampton Holdings Corp. (CSE: HC) has already established a 10.8 acre cannabis cultivation project in Coachella, California, but its recent move to acquire a leading high-end edibles maker may prove to be a key turning point. With over $2 million in annual revenue, the edibles-maker could add to its bottom line financial results and provide a valuable opportunity to tap into California’s lucrative and fast-growing edibles market.
Edibles Market Share Grows
Most cannabis companies are focused on flower and concentrates, but edibles are one of the fastest growing subsets of the market. According to Bloomberg, edible products may capture half of the $5.4 billion cannabis industry’s sales over the coming years. BDS Analytics estimated that they already accounted for about 12 percent of the market in 2016 across Colorado, Washington, and Oregon where the adult-use market is established.
Of the edibles market, chocolate accounted for 21 percent of Colorado’s market and 43 percent of Oregon’s market, according to the 2016 BDS Analytics report. California’s market is still too early to measure reliably, but chocolates are likely to be among the most popular edible product, while edibles are likely to capture a high percentage of the overall market. These trends suggest that investors may want to look towards companies building a presence in these areas.
According to Arcview, Californians spent about $1.8 billion on legal marijuana in 2016 and that figure is expected to grow at a 25 percent annual growth rate to $5.8 billion by 2021. In Colorado, edibles grew from just $17 million in Q1’14 to $53 million by Q3’16 and have continued to experience strong growth since then. These trends suggest that edibles could present a lucrative opportunity in the new recreational market.
Acquiring an Established Brand
High Hampton recently announced a binding letter of intent to acquire California Gold Inc., an established cannabis edibles brand with seven award-winning, multi-strain flavor chocolate bars across California dispensaries. Last year, the company generated approximately $2 million in revenue under the guidance of co-founders Daniel Hood and Jonathan Schwartz, who have nearly 20 years of combined experience in California’s cannabis industry.
“Acquiring CALIGOLD represents a strategic move in our mission of consolidating the California cannabis market,” said High Hampton CEO David E. Argudo in the press release announcing the deal. “Through this acquisition, not only do we begin to establish presence throughout California by accessing a substantial distribution network with CALIGOLD, but, just as importantly, we begin generating revenues during our aggressive growth cycle.”
California Gold was founded in 2014 when Daniel Hood, an artisan chocolatier, noticed a gap in the cannabis chocolate market. With its gourmet ingredients and strain-specific infusions, the company won first place at HempCon in 2014 for best edible and then again at Edibles List Magazine for its THCa chocolate. The company has recently announced plans to introduce other THC, THCa, and CBD products to further diversify its product lines.
“CALIGOLD is very excited to be a part of High Hampton Holdings,” said California Gold Co-Founder Daniel Hood. “This is the culmination of several years of establishing a market presence. We foresee a great future in helping build a global cannabis brand. The real work starts now, as we ramp up product development and focus on global strategy.”
Under the terms of the deal, High Hampton has agreed to commit at least $2.6 million towards product development, marketing, and sales and working capital during the first 12 months.
High Hampton Holdings Corp.’s (CSE: HC) move to acquire California Gold represents the latest in its efforts to consolidate a leadership position in California’s market. The company’s flagship subsidiary, CoachellaGro, is focused on the development of a 10.8 acre property situated in the proposed cannabis industrial park in Coachella, CA. The company is currently in the application process for a conditional use permit ahead of initiating production.
For more information, visit the company’s website or download their investor presentation.
The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://www.cannabisfn.com/legal-disclaimer/
Follow Us on Social Media
About CFN Media
CFN Media (CannabisFN) is the leading creative agency and media network dedicated to legal cannabis. We help marijuana businesses attract investors, customers (B2B, B2C), capital, and media visibility. Private and public marijuana companies and brands in the US and Canada rely on CFN Media to grow and succeed.
CFN launched in June of 2013 to initially serve the growing universe of publicly traded marijuana companies across North America. Today, CFN Media is also the digital media choice for the emerging brands in the space.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.