High Hampton Expands Strategic Network in California
June 25th, 2018
News, Top News
California’s cannabis industry could exceed $7.7 billion by 2021, according to Arcview Market Research, driven by the legalization of adult-use cannabis this year. With cannabis cultivation scaling higher, investors are looking towards branding and distribution as potentially higher margin plays within the industry. But, there are only a handful of companies that have started building a large state-wide presence.
High Hampton Holdings Corp. (CSE: HC) (FSE: 0HCN) recently announced the expansion of its cannabis distribution network in California through the acquisition of 420 Realty LLC, which has multiple permits to vertically integrate in the City of Cudahy, CA (Greater Los Angeles).
420 Realty’s Unique Position
Most investors are familiar with the concept of a Conditional Use Permit, or CUP, which are commonplace in cities like Coachella. The City of Cudahy uses a Development Agreement in lieu of a Conditional Use Permit. The Development Agreement, or DA, outlines what the developer is planning in an official application. The city reviews the application, vets the business, and conditionally gives a letter of approval upon meeting the requirements.
420 Realty LLC has applied for a Development Agreement that includes cannabis cultivation, manufacturing, delivery, and distribution licenses of which the city of Cudahy has a pre-approved all on a single parcel location. In addition to the pre-approved license, the company is applying for six temporary state licenses and two of them have come through, including the processing license for processing cannabis flower and the cultivation license to actually grow cannabis flower — which also covers the nursery as part of the process.
The company plans to establish a brand identity that is synonymous with top shelf quality and accessible pricing throughout California, while manufacturing, delivering, and distributing a wide variety of flower strains and marijuana concentrates in multiple CBD-to-THC ratios and terpene profiles. These products will be available in wholesale flower, concentrate, and vaporized cartridge forms, while the company may also provide white label services.
Building a Strategic Network
High Hampton is building a strategic cannabis distribution network in California that brings more products and quality brands online.
Christian Scovenna, High Hampton’s Sr. VP Corporate Finance, commented:
“This transaction further expands High Hampton’s strategic cannabis distribution network in California and will ultimately allow us to bring more products and quality brands online as we advance this and our other assets. With the previously announced acquisitions of CaliGold (see press release April 18, 2018) and Bravo Distro (see press release May 2, 2018) expected to close soon, High Hampton will be well positioned with distribution hubs, product and cultivation opportunities across California.”
The company’s flagship investment is its wholly-owned subsidiary, CoachellaGro Corp., which is building a 254,000 sq. ft. greenhouse facility situated in the cannabis industrial park located in Coachella, CA. The subsidiary has secured a Conditional Use Permit for development of a full-service production facility to serve third party state licensed medical marijuana operators and could become a leading complex in the state.
In addition to this project and the 420 Realty deal, the company previously announced the acquisitions of CaliGold and Bravo Distro. CaliGold sells seven multi-strain flavors of award-winning chocolate bars in dispensaries across the state with approximately $2 million in 2016/2017 revenue, while Bravo is a fast-growing cannabis distributor with a team of alcohol distribution veterans and cannabis industry experts.
High Hampton Holdings Corp. (CSE: HC) (FSE: 0HCN) represents a compelling investment opportunity in California’s burgeoning cannabis market. With a growing distribution network and brand portfolio, the company is uniquely positioned to deliver long-term shareholder value. Investors may want to take a closer look at the stock as it continues growing its brand portfolio and distribution network through strategic acquisitions.
For more information, visit the company’s website at www.highhampton.com.
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