Grown Rogue Moves into California’s $5 Billion Cannabis Market

California’s cannabis industry is the largest in the country with revenue expected to reach $5.1 billion by 2022, according to Arcview Market Research and BDS Analytics. With about 40 million residents and a long history of cannabis usage, the state presently represents about a third of the North American cannabis market. The legalization of recreational cannabis this year could further accelerate that market share over the coming years.

Grown Rogue International Inc. (CSE: GRIN) is a vertically-integrated, multi-state cannabis brand that specializes in creating “seed-to-experience” products. Unlike many other cultivators that produce their own strains, the company is focused on translating these genetics into what customers actually experience when they consume the product. The approach has served them well in Oregon and could pay more dividends as it expands into California and beyond.

Up & Running in California

Grown Rogue recently announced that it secured 16,000 sq. ft. of prime real estate Humboldt County, which has become a popular cannabis growing region in the state. GRD Cali, LLC will provide distribution services to support local licensed cannabis farmers and processors, as well as distribute its own Grown Rogue product categories produced or sourced in California. Management anticipates that the new subsidiary will receive a distribution license this month.

“In California, we are replicating successful operations, cultivation, distribution, and brand integrity that has been so effective for Grown Rogue in Oregon,” says CEO Obie Strickler. “Unlike most California producers, we have first-hand experience operating under the changing supply chain logistics and compliance, which allows us to replicate our proven business model within these new jurisdictions like California.”

The company is basing its initial California sales team out of Los Angeles, where a business development director with 15 years of experience in the cannabis market will launch operations. After spending a year building sales and distribution relationships from Los Angeles to San Francisco, the company is well positioned to hit the ground running and build a sizable presence in the state following its successes in Oregon.

A Multi-State Business Plan

Grown Rogue’s move in California is just the beginning of a multi-state business plan. In addition to California, the company has its eyes on Nevada and at least one other market in the near-term. These markets offer opportunities for distribution of third-party products, as well as opportunities and manufacture and distribution in-house brands, including premium flower, patent-pending nitrogen sealed pre-rolls, and premium edible products.

“Very few cannabis operators have the history and years of experience in cannabis that our senior management possesses,” says Chief Strategy Officer Jacques Habra. “From building out cultivation infrastructure to establishing distribution systems that work, this team has the knowledge and understanding to move quickly and effectively into new regions.

Nevada’s market is already experiencing tremendous growth following the legalization of recreational cannabis this year. During the fiscal year ended June 30, the state’s cannabis industry generated an estimated $530 million in revenue, which was 140 percent higher than expected. There were few major hiccups or compliance issues, which means that operators have had a steady time expanding within popular tourism state.

Looking Ahead

Grown Rogue International Inc. (CSE: GRIN) represents a compelling opportunity within the cannabis industry. After setting up shop in California, the company could see significant growth over the coming quarters, if management is able to replicate its success in Oregon. Further expansion into Nevada and other states could open the door to further growth in revenue and synergies across its various subsidiaries.

For more information, visit the company’s website at www.grownrogue.com.

Disclaimer

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: http://www.cannabisfn.com/legal-disclaimer/

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.