Laguna Blends Moves to Acquire Global Cannabis Leader
March 21st, 2017
News, Top News
The cannabidiol (“CBD”) industry is expected to rapidly expand into a multi-billion dollar industry over the coming years. With a growing body of research supporting its use, investors may want to take a look at both pharmaceutical and nutraceutical companies targeting the space. Hemp-based CBD producers may be particularly attractive since they are largely protected by the federal government’s uncertain stance on cannabis.
In this article, we will take a look at Laguna Blends Inc.’s (CSE: LAG) (OTC Pink: LAGBF) plans to acquire a leading global cannabis firm and grow into a leader in the space.
Large & Growing Industry
The hemp-derived cannabidiol (“CBD”) market has been growing at a rapid pace over the past few years. The Hemp Business Journal estimates that consumer CBD sales will soar more than 700% to $2.1 billion by 2020. Greenwave Advisors is even more optimistic about the growth in the CBD market, with Founder Matt Karnes telling Forbes that it could reach $3 billion by 2021 – a significant growth rate and market for emerging companies.
According to ProjectCBD, a growing number of researchers have focused on studying the effects of CBD on a variety of medical conditions, ranging from Alzheimer’s disease and Attention Deficit Disorder to stress relief and sleep disorders. Many pharmaceutical companies have been developing pharmaceutical compounds based on the drug, while nutraceutical companies have formulated over-the-counter options.
The hemp-based CBD industry benefits from its established legal status relative to the uncertain cannabis industry. While cannabis remains a Schedule I Controlled Substance, the Drug Enforcement Agency (“DEA”) has been unsuccessful in its attempts to regulate hemp in the same way (see HIA v. DEA). Hemp does not contain any psychoactive THC, so the CBDs extracted is only governed by nutraceutical rules about making marketing claims.
Hemp & CBD Incubator
Laguna Blends aims to become a market leader in the distribution of hemp and CBD products by acquiring and incubating companies in the space. Recently, the company announced that it signed a letter of intent to acquire a leading cannabis firm with unaudited annual sales of $12 million and adjusted EBITDA of $1,588,000. The transaction would occur for cash and stock consideration totaling $12.5 million, making it an attractive acquisition for shareholders.
In addition to its acquisition strategy, the company owns and operates a business-to-business network of affiliates and an online marketplace lagunablends.com to extend distribution. Currently, the company sells a complete line of CBD-infused skincare products through its Cannaceuticals website at www.cbdskincream.com. These products target everything from exfoliation to anti-aging and harness the power of CBDs and other cutting-edge compounds.
The potential acquisition of a revenue-generating firm in the space could provide the financial leverage to accelerate the company’s acquisition strategy over the coming quarters as well as bolster its other internal efforts. At the same time, the company’s online marketplace and affiliate network could open the door to significant synergies between acquired companies and generate significant long-term revenue for shareholders.
Laguna Blends Inc. (CSE: LAG) (OTC Pink: LAGBF) represents a compelling opportunity within the multi-billion dollar CBD space. With a potential upcoming acquisition, the company will be well-positioned to execute on its roll-up strategy and build out its affiliate B2B network and online marketplace into a leading distribution channel.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
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