Why ‘Second-Mover Advantage’ is Key to Cannabis 3.0

Legal cannabis has become one of the fastest growing industries in history. In less than a decade, it has grown from zero to upwards of $15 billion in global sales, driven by the liberalization of laws around the world. These growth rates are expected to accelerate as more states and countries legalize medical and adult-use cannabis, while researchers continue to explore the therapeutic potential of cannabinoid-based medicines.

CFN Media recently caught up with General Cannabis Corp. (OTCQX: CANN) CEO Steve Gutterman and Hälsa Holdings CEO Chris Colón to discuss the industry’s evolution over the past five years and how they are positioning themselves for Cannabis 3.0 and beyond.

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The Evolution from 1.0 to 3.0

The legal cannabis industry began in 2015 when Canada legalized medical marijuana. Canadian operators began raising capital on the Cannabis 1.0 thesis that Canada would become a global distribution hub and Canadian operators could quickly expand south of the border into the United States. Of course, many licensed producers have failed to meet these lofty expectations and export growth has been very slow to materialize.

In 2018, California and many other states began legalizing recreational marijuana following voter ballot initiatives. Cannabis 2.0 companies began raising capital on the thesis that they could aggregate and aggressively deploy capital into these limited license states to create near-monopolies that could become tremendously valuable. Of course, the uncertainty around timing, patient counts, and regulations reined in these hopes.

Potential Sales from States without Full Legalization – Source: Statista, New Frontier Data

The industry’s next phase — Cannabis 3.0 — will be about maturity and profitability. Public companies that are transparent with access to capital will be able to move into mature markets and aggregate proven assets at a good value, apply conventional retail strategies to manage them well, and ultimately grow significant shareholder value. These companies could become the future industry bellwethers that withstand the test of time.

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The Second-Mover Advantage

General Cannabis CEO Steve Gutterman believes that ‘second-mover advantage’ will be key to succeeding in Cannabis 3.0. After acquiring mature operators in mature markets, the company plans to apply proven retail approaches to the cannabis industry by looking at traffic counts, traffic generators, populations and other factors. These are the same strategies that have helped fast food chains and other businesses predictably grow.

The company’s acquisition of Hälsa Holdings represents a step in the right direction. After a painstakingly picking three marquee assets in California, Hälsa Holdings established purchase agreements or letters of intent signed with retail dispensaries in California that are generating a combined ~$12 million in revenue. The company plans to refurbish and expand operations at all three locations to boost revenue over the long-term.

In addition to acquiring these agreements, Hälsa Holdings CEO Chris Colón will become President of General Cannabis and bring tremendous value to the management team. Prior to joining Hälsa, Mr. Colón was President of Nectar Cannabis, the largest vertically integrated cannabis company in the state of Oregon with seventeen retail locations and over four hundred employees. He was also an executive at Consumer Capital Partners.

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Looking Ahead

General Cannabis Corp. (OTCQX: CANN) is using its second-mover advantage to position itself for Cannabis 3.0. By acquiring high-quality assets in mature markets, the company aims to build long-term value for shareholders. The acquisition of Hälsa Holdings represents a great first step in the right direction by potentially bringing three retail locations into the fold that could generate upwards of $12 million in revenue.

For more information, visit the company’s website or sign-up to download their investor presentation and receive updates.

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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.

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.