The marijuana industry has been fueled by a large amount of bullish sentiment for the past month or two. One of the main talking points of the industry has been the growers who produce cannabis for sale on the open market. This covers both the recreational and medical marijuana segments of the market.
Growers have remained the backbone of the industry for some time now and investors continue to view them as a potentially stable move into the next few years. With projections showing cannabis could reach as much as $32 billion worldwide in the next two years, there is a lot of room left to grow for the companies working at the top.
Next Green Wave (NXGWF) (NGW) is one of the key vertically integrated producers of cannabis-based out of Canada but with their operations in Coalinga, CA. Now at first, Coalinga might seem like a random pick out of a hat, but there are various strategic reasons behind this. For starters, California is widely regarded as the largest recreational cannabis market in the world.
With this comes San Francisco and Los Angeles, two heavily populated areas with the majority of cannabis demand internally. Coalinga, CA just happens to be centered right between densely populated locales, which means that Next Green Wave (NXGWF) (NGW) is physically positioned quite well to take advantage of the fast-paced and fast-growing industry.
Next Green Wave (NXGWF) (NGW) also utilizes a unique business model for the marijuana industry. They employ a seed-to-sale model, which essentially means that they control every aspect from growing the plant to selling it. Usually, there are a series of middlemen in the way taking cuts along every path. By utilizing this business model, Next Green Wave (NXGWF) (NGW) is able to achieve two things.
First, they are able to have a high amount of control over the product that they are producing. This ensures that they are able to consistently put out high-quality cannabis into the market. The second factor is that vertical integration also allows for the cannabis can be much cheaper there are fewer factors taking away from profits. Both of these factors continue to illustrate why Next Green Wave (NXGWF) (NGW) could become a powerhouse in the arena.
Big Announcements Cue Global Expansion
Notwithstanding the current focus of Next Green Wave (NXGWF) (NGW), the company is already forward thinking. Realizing the huge opportunity that the global arena holds, Next Green Wave (NXGWF) (NGW) has already put the wheels in motion. This morning the company announced that it has entered into a memorandum of understanding to take a strategic investment in Organic Medical Growth OMG3 INC., a Canadian based company operating a wholly owned Colombian subsidiary called Proymed S.A.S.
Proymed is a medical cannabis company focused on producing and commercializing non-psychoactive (CBD) products derived from medicinal and industrial cannabis. Proymed is finalizing its transformation and psychoactive (THC) licenses in Colombia as well as finalizing international distribution agreements.
The major potential value-add for Next Green Wave should this deal close: Next Green Wave will have access to the Colombia cannabis market, which has an estimated potential to supply 6 million patients! On top of this, Next Green Wave will collaborate and provide commercial strategic support to OMG.
Low Cost, High Margin
According to Next Green Wave’s release, OMG is actively pursuing an IPO and focusing, through Proymed, on becoming a significant producer and supplier of medical cannabis products and services in Colombia alongside companies such as PharmaCielo and Khiron Life Sciences Corp.
“OMG is positioning itself to become one of the lowest cost, high margin businesses operating in Colombia model while delivering premium quality cannabis products to their consumers.”
Not only could this strategic investment prove fruitful if or when OMG goes forward with an IPO but the alliance created could open huge opportunities on a global level for Next Green Wave (NXGWF) (NGW) in our opinion.
“We are excited to become a strategic partner of OMG as they position themselves to be a leader in the production and distribution of medical cannabis in Colombia,” stated Leigh Hughes, CEO of Next Green Wave. “With the likes of PharmaCielo Ltd. and Khiron Life Sciences Corp gaining recent global exposure in the cannabis world, it is clear that Colombia has brilliant potential for a low-cost, high-margin business model. Our partnership will benefit both parties by accelerating OMG to become a leader in the Colombian market whilst giving Next Green Wave future licensing opportunities and distribution beyond the California market.”
This continued fight for the top space in the industry could prove successful companies like Next Green Wave (NXGWF) (NGW) who are taking aim at worldwide exposure. All in all, investors should view this as a pivotal time to pay close attention to industry benchmarks as companies continue to make big waves throughout the market.
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