Green Growth Brands Inc (OTCMKTS:GGBXF) is skyrocketing as investors await the outcome of a proposed takeover of Aphria Inc (NYSE:APHA). The company has already tabled a takeover bid that values Aphria at roughly C$2.8 billion.
Catalysts And Share Price Analysis
In addition to pursuing organic growth, Green Growth has also continued to expand its footprint in the cannabis sector, a development that has continued to strengthen its sentiments among investors. For starters, the company has expanded its multi-state operations in Arizona.The company is also fresh from signing a long-term licensing agreement for the rollout of CBD-infused personal care products as part of its growth strategy. The company has also opened its first CBD shop in Kentucky Mall as it continues to pursue new sales channel.It thus does not come as a surprise that the stock is trading in a steep uptrend given the underlying developments that affirm growth prospects. While the stock is up by 20% for the year, it still has some room to continue powering high, given the solid fundamentals.After the recent spike, Green Growth Brands faces immediate resistance at the $5 a share level. A rally followed by a close above the critical resistance level should affirm the steep uptrend, opening the door for the stock to continue powering high. GGBXF Daily ChartSell-offs should experience support at the $3.20 a share level, from where the stock is likely to continue rallying in line with the long-term uptrend. In our view, Green Growth Brands remains well positioned to continue climbing the ladder, if investor’s reactions to recent developments are anything to go by.
About Green Growth Brands
Green Growth Brands is a cannabis-focused company that cultivates, produces, distributes and retails cannabis as well as cannabis-infused products. Its product line is made up of tetrahedral cannabidiol and cannabis-infused consumer products. It also offers consulting services for the greater cannabis industry.
Aphria ACQUSIITION Push
Green Growth Brands remains the center of attention after reaffirming plans to acquire Aphria. The company is planning to acquire Aphria in a deal that values it at C$11 a share, representing a 45.5% premium over the stock closing price on December 24, 2018.The company has however suffered a major blow on its hostile takeover bid on Aphria Board of directors rejecting the offer. The board insists that the offer undervalues the company, even though it represents a 45% premium.The rejection has however done little to affect investor’s sentiments on Green Growth Brands. The stock has continued to trade higher, on investors remaining optimistic about the company’s push to pursue organic growth through acquisition.Aphria takeover blow has done little to affect Green Growth Brands management bid to strengthen the company’s growth prospects. Plans are already underway to expand the company’s footprint into Arizona with the acquisition of ZLJT LLC & Arizona Natural Pain Solutions.
Strategic Partnership
The company Green Growth Brands us acquiring holds a license that allows it to carry out vertically integrated operations in Arizona.
"The retail operations at Desert Rose fits our stated strategy of favoring large sales volume with high-productivity assets. Our vision of Green Growth Brands is to be a multi-state operator with stores averaging USD$15 million to USD$20 million in annual sales, driven by per square foot sales in excess of USD$ 10,000. This is what our first assets in Nevada and this store in Arizona have achieved,” said Green Growth Brands CEO Peter Horvath.
In addition, Green Growth Brands has signed a long-term licensing partnership with Authentic Brands Group and Greg Norman. The partnership is for the rollout of a new line of CBD-infused personal care products for targeting active adult men and women. The deal is part of the company’s pipeline of value-creating initiatives and strategic partnerships.
What Next For Green Growth Brands
Green Growth Brands is still a solid buy even on suffering a major blow on the acquisition of Aphria. The company is working on an aggressive strategy that seeks to pursue both organic and inorganic growth. The company has shown its readiness to strengthen growth prospects in the sector through acquisitions and by signing strategic partnerships.That said Green Growth is a fundamentally attractive investment having started the year on a roll supported by improving fundamentals and growth metrics. For early movers, the stock is an ideal play on pullbacks as a long-term investment.We will be updating our subscribers as soon as we know more. For the latest updates on GGBXF, sign up below!Disclosure: We have no position in GGBXF and have not been compensated for this article. We are long APHA.
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