In an interesting move that offers some insight into the state of the cannabis commodity cycle, Green Growth Brands Inc (OTCMKTS:GGBXF) just announced the termination of its proposed business combination with MXY Holdings LLC as the market adjusts to the changing macro environment. The move suggests concerns about the balance sheet for GGB in the face of continued deterioration in the cannabis space.
According to the release, GGB is continuing with its aggressive growth strategy in both the MSO and CBD businesses. The MSO business now includes a 47 dispensary rollout in three key states, and the Company will continue its expansion in this line of business, opening its remaining 45 dispensaries with the same speed and energy it dedicated to its North American CBD network.
Green Growth Brands Inc (OTCMKTS:GGBXF) trumpets itself as a company that engages in the cultivation, processing, production, distribution, and retailing of cannabis and cannabis-infused products in the United States.
The company offers cannabis, tetrahydro cannabidol, cannabidiol, and cannabis-infused consumer products, as well as technology and consulting services for the cannabis industry. Xanthic Biopharma Inc. was founded in 1968 and is headquartered in Toronto, Canada.
The Company is a lifestyle oriented, consumer products company that celebrates health, wellness and happiness. We are in the business of cultivation, processing and retailing of cannabis, tetrahydrocannabidol, cannabidiol and cannabis-infused consumer products.
Over the next 12 months, the Company intends to expand its retail and wholesale cannabis businesses as well as its CBD consumer products business through a combination of strategic partnerships, merger and acquisition activity, and organic license capture. The Company’s objectives are to establish retail cannabis locations, or otherwise apply for such licenses, in various states within that timeframe, pursuant to state laws. Such activity will focus on those certain states where cannabis has been legalized for medical and/or recreational use at the state level.
According to company materials, “Green Growth brands expects to dominate the cannabis and CBD market with a portfolio of emotion-driven brands that people love. Led by Peter Horvath, the GGB team is full of retail and consumer packaged goods experts with decades of experience building successful brands.”
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As noted above, GGBXF just announced the termination of its proposed business combination with MXY Holdings LLC as the market adjusts to the changing macro environment.
Recent action has seen 11% piled on for shareholders of the company during the trailing week. In addition, the stock has seen a growing influx of trading interest, with the stock’s recent average trading volume running 44% over the long-run average.
“We are aggressively growing our businesses across America as we drive to become a leading cannabis retailer in the country,” said Peter Horvath, CEO of the Company. “While we continue to be open to collaborating with other industry leaders, we need to ensure we are focused on building our operational strengths, maximize our returns and, most importantly, avoiding excessive dilution to our shareholder base.”
Now commanding a market cap of $152.5M, GGBXF has a troubled balance sheet, with about $6.8M in cash on the books, which stands against about $129M in total current liabilities. The company has pulled in about $28M in total trailing 12-month revenues. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $GGBXF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $GGBXF, either long or short, and we have not been compensated for this article.