FinCanna Capital well positioned with royalty business model in the heralded American cannabis industry
A key point to know for cannabis investors is that California is the largest legal marijuana market in the world. The sheer size and population of around 40 million is making California the epicenter of the United States cannabis market. The state has around 1 million medical cannabis users. California is also the largest state economy in the US and is the fifth largest economy in the world.
The cannabis market is forecast to grow very strongly
A 2019 report on the cannabis market stated: “Worldwide legal cannabis spending hits $12.2 billion in 2018, projected to grow 38% to $16.9 billion in 2019.” An earlier (2018) report by Arcview Market Research and BDS Analytics stated: “The (global) cannabis market could triple in size in the next four years. In fact, by 2022, the global cannabis market could be worth as much as $32 billion, a three-fold increase in just five years with the U.S. expected to fuel much of that growth with an expected market value of $23.3 billion. Much of the current growth we’re seeing comes from California’s cannabis market, which is expected to exceed $5.1 billion market value in the next year after legalizing its recreational use on January 1, 2018.”
Worldwide legal cannabis sales 2017
FinCanna Capital Corp. (CSE: CALI | OTCQB: FNNZF) (“FinCanna”) is a royalty company that provides growth capital to rapidly emerging private companies operating in the licensed U.S cannabis industry. The Company earns its revenue from royalties paid by its investee companies that are calculated based on a percentage their total revenues
FinCanna’s mission and royalty business model
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FinCanna’s mission is to combine extensive investment expertise and industry experience in providing growth capital to rapidly emerging private companies operating in the licensed U.S. cannabis industry with a focus on California.
FinCanna’s royalty financing offering is an alternative or complement to debt and equity financing. It provides the advantage of allowing investees to maintain financial flexibility and control of their business as opposed to entering into arrangements that may include restrictive debt structures or giving up an ownership stake.
FinCanna’s royalty portfolio
- ezGreen Compliance offers a state-of-the-art enterprise compliance and point-of-sale software solution (ezGreen) for licensed medical cannabis dispensaries and cultivators. FinCanna earns a perpetual royalty equal to 10% of consolidated gross revenues of ezGreen, subject to certain buy-back options.
- QVI Inc. is a cannabis infused product manufacturer located in Sonoma, California. QVI is currently refitting its 8,300 square foot facility with dedicated spaces for a large-scale commercial kitchen for baked goods, chocolate products and a hard candy and gummy line. FinCanna will earn a perpetual royalty ranging from 15% to 6% of QVI’s annual revenues, subject to certain buy-back options.
- Refined Resin Technologies Inc. is a cannabinoid research and refinery company that will provide B2B and B2C products and services to licensed dispensaries and distributors in the medical cannabis supply chain. Upon completion of funding, FinCanna will earn a perpetual royalty ranging from 16% to 7% of Refined Resin’s consolidated annual revenues, subject to certain buy-back options.
- Cultivation Technologies Inc. (CTI) has growing/extraction/testing/educational facilities and plans to build a large-scale indoor medical cannabis facility in Southern California.
FinCanna’s deal pipeline for H2 2019
Not yet able to release exact details FinCanna has revealed a strong deal flow ahead, with new acquisition opportunities in the pipeline for H2 2019 .
FinCanna is focused on delivering high-impact returns to its shareholders by way of a strategically diversified investment portfolio with a focus on US medical cannabis companies. FinCanna maintains a very strong cash position within a diversified investment portfolio across the US medical cannabis sector.
Given the explosive growth forecast ahead for the US cannabis market, FinCanna is in the right place at the right time as the US cannabis industry looks set to take off. FinCanna Capital Corp. has a market cap of C$ 15.3 million.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in ... <Read more about Matthew Bohlsen>