- Cannabis investment company dedicated to the multibillion-dollar US marijuana market
- Strong management team with decades of cannabis industry and capital markets experience
- Multiple M&A opportunities available from long-term industry relationships
What Chemistree Technologies does:
Chemistree Technology Inc (CSE:CHM) (OTCMKTS:CHMJF) is looking for the next big thing in US cannabis.
The investment company is dedicated to acquiring and developing vertically integrated cannabis assets in the US marijuana sector, leveraging decades of industry expertise to own and operate licensed cultivation, processing, distribution and retail facilities throughout the country.
Chemistree’s key asset is the Sugarleaf brand, a Washington state-based product line of high-quality flower. Purchased in December 2018, for US$1.3 million, the company increased cultivation by 200% and retail distribution by 400% to hit revenue targets of around US$1.2 million in 2019.
It also owns prospective cannabis cultivation lands in California and recently closed the acquisition of Applied Cannabis Sciences, giving Chemistree a foothold in New Jersey.
The team leading the Canadian company has decades of experience in the cannabis sector and capital markets. CEO Karl Kottmeier has directly raised over US$150 million for global development projects and chief cannabis officer Sheldon Aberman has managed and designed hundreds of cannabis grows around the globe.
Aberman was also involved in building several multimillion-dollar cannabis brands such as Black Label and Frost Box.
Chemistree is shoring up its assets in the US at a time when the cannabis sector is at a tipping point, with the majority of the country’s population in favour of federal legalization.
The sector is estimated to be worth over US$30 billion by 2023, according to recent estimates.
How is it doing:
The investment company has C$6 million cash on hand as of October 2019.
In July, Chemistree’s US subsidiary finalized its investment in Applied Cannabis Sciences (ACS) of New Jersey.
The completion of the investment comes as ACS, Chemistree's new partner, gears up to submit applications for licenses under the state’s new marijuana plan.
New Jersey recently announced a project to offer up to 24 new permits, consisting of 15 dispensary permits, five cultivation permits, and four vertically integrated permits.
Over in Washington State, Chemistree’s Sugarleaf brand booked strong sales and is looking at expanding to keep up with rocketing demand for its products.
In a statement, the Vancouver-based cannabis-investment company said that Sugarleaf saw a 30% sales increase from April, a 36% rise in crop yield, and a 100% boost in retail client stores.
Sugarleaf has asked for additional cultivation space at Sedro Wooley park on a turn-key basis so that the cannabis producer can double its current capacity to meet demand for Sugarleaf branded products.
Chemistree also announced in October that it had decided to terminate its planned investment into Arizona-based The Physician’s Choice after concluding that, while scientifically excellent, due diligence identified significant issues with the company's management.
If there is any company patiently awaiting US federal cannabis legalization, it is Chemistree.
The passage of the SAFE Banking Act through the Senate would be a major catalyst for the cannabis investor and its peers in the US.
Until then, however, Chemistree has a series of well-defined targets in each state where it currently operates:
- Addition of 5,000 square feet of cultivation and production capacity by 2Q 2020
- Increased cultivation and retail distribution
- Buildout of Desert Hot Springs facility (Phase 1&2 lasting nine months each)
- Receipt of cultivation, manufacturing and sales license
What the CEO says:
Upon the passage of the SAFE Banking Act through the US House of Representatives, Chemistree’s president Karl Kottmeier issued a statement applauding the bill’s progress.
“Chemistree decided early in its history to focus on developing its business in the legal cannabis industry in certain states in the US,” he said.
“Members of our management team, our Board of Directors and major shareholders have long been significant influencers in the legal cannabis industry in the United States. (The passage) of the SAFE Banking Act by the US House of Representatives is not only a huge vote of confidence for them in their efforts but also a crucial first step in the process of securing and simplifying financial transactions in the legal US cannabis industry,” Kottmeier added.
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