Although the last few months have been rough for the cannabis industry, company fundamentals are improving (on average) as new markets open and existing markets gain traction.

We have been closely following the cannabis industry since 2014 and have noticed a lot of changes at the industry level and at the company level during this time. During the last year, we have noticed a large increase in the number of publicly traded cannabis companies that are focused on specific verticals of the industry and this is a trend that has caught our attention.

In the early years of the cannabis industry, investors were primarily focused on Canadian companies that were focused on cultivation and medical cannabis patients. Although these early movers have played a key role in the advancement of the cannabis industry, investors need to be aware of the changing landscape and we have been working to identify companies that are going to benefit from this.

One company we have started to follow is Pure Harvest Cannabis Group (OTC: PHCG) which is highly levered to the Colorado cannabis market. When looking at the domestic cannabis industry, Colorado has been one of the greatest beneficiaries of the legal cannabis movements and the state has sold more than $7 billion of product since 2014 (according to the State of Colorado). Although many analysts expected the opening of new recreational cannabis markets (i.e. California, Nevada, and Oregon) to impact the Colorado cannabis industry, the state continues to record massive revenues, and this is a trend that we have been excited about.

Pure Harvest is building a vertically integrated holding company comprised of synergistic assets that are levered to the Colorado market. Through a series of inorganic growth initiatives, Pure Harvest intends to execute on an aggressive growth strategy that is centered around the management team’s ability to quickly complete accretive acquisitions. During the last year, the Pure Harvest story has recorded significant advancements, and this is an opportunity that will be on our radar on a going forward basis.

Focused on High-Growth Verticals

From edibles to oils, and cannabis flower to cultivation technology, Pure Harvest is levered to several high growth verticals within the cannabis industry and represents a multi-faceted growth opportunity. We believe that the company is led by a management team that has had its finger on the pulse of the Colorado market and are bullish on the verticals that the business is focused on.

When it comes to analyzing cannabis companies, it all starts with the management team and we have been favorable on companies that are led by operators that have proven track records of success. We believe that the strength of the management team at Pure Harvest will play an important role when it comes to being able to execute on the strategy in place.

A key advantage for Pure Harvest is that the management team and the advisors have extensive cannabis and capital markets experience and have been instrumental in financing four other private and public cannabis companies focused on various aspects of the industry. The management team’s record of success, coast-to-coast cannabis experience, and network of contacts provides the business with a key advantage as it relates to making additional acquisitions and advancing the operation.

Pure Harvest has an attractive operating structure comprised of wholly owned subsidiaries. We are favorable on the amount of value that can be generated by each subsidiary as well as the potential for synergies. The subsidiaries include:

• Pure Harvest Colorado (PHC) – a vehicle formed to merge and acquire two operating, revenue producing Colorado cannabis businesses with seven combined licenses. These include one of the fastest growing infused products producers in Colorado and a licensed grower and retailer in Dumont, Colorado where PHCH is planning a high-profile Pure Harvest dispensary to capitalize on the highly traveled 1-70 with year-round recreational traffic.
• Pure Harvest Hemp (PHH) – a vehicle formed to merge and acquire Prolific Nutrition, a Colorado-based hemp/CBD products company, and EdenFlo, a Colorado-based hemp-CBD producer into a dynamic global vertical operator with plans to scale dramatically.

Pure Harvest’s management team is also assisting with the development of Solar Cultivation Technologies (SCT), a sustainable cultivation technology company that is developing technology for the production of cannabis in solar and wind powered greenhouses. Pure Harvest has entered into an Agreement to purchase SCT provided certain growth and sales targets have been met.

Once these acquisitions have been completed, Pure Harvest will be well positioned to record incremental growth and we find this to be significant. When looking at the potential value that can be created through the completion of these acquisitions, we believe that the subsidiaries will strategically support the growth of the entire business and will create additional organic growth initiatives for each other.

If the management team is able to close these acquisitions and scale operations, the company could spin off each subsidiary as standalone public companies and are we are favorable on the amount of value than can be created through this process. Although this is a challenging process, we be closely monitoring how the management team is able to execute on this.

An Opportunity that is Flying Under the Radar

When looking at the growth prospects associated with Pure Harvest Cannabis Group (assuming the acquisitions are completed), there is a lot to be excited about and we believe that the opportunity is flying under the radar.

We believe that Pure Harvest Cannabis Group has significant potential catalysts for growth and the company is working to raise capital through a $10 million private placement of stock and warrants. The management team has stated that the proceeds will be used to for corporate working capital and strategic acquisitions (outside of Colorado), and this is something we are watching.

Going forward, the name of the game for Pure Harvest Cannabis Group is execution and we believe that the company is well positioned to execute. To learn more about the company, please contact support@technical420.com to be added to our distribution list.

Pursuant to an agreement between StoneBridge Partners LLC and Pure Harvest Cannabis Group (PHCG) we have been hired for a period of 90 days beginning October 14, 2019 and ending January 14, 2020 to publicly disseminate information about (PHCG) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month (PHCG) for or were paid “0” shares of restricted common shares. We own zero shares of (PHCG), which we purchased in the open market. We plan to sell the “ZERO” shares of (PHCG) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (PHCG) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

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Authored By Anthony Varrell

Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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