Pulling Back the Curtain
For months, people have been quietly wondering exactly what assets Red White & Bloom acquired last year.
Given their track record, this fully-funded $90 million acquisition has generated lots of buzz and speculation across the industry.
But due to regulations, the acquisition has been a well-kept secret.
They haven’t shared what was included, what they have planned, or how significant their revenue numbers run for these new assets.
Details started to come forth though with Red White & Bloom’s announcement last summer.
That’s when they revealed that the investee had produced an incredible $70 million in trailing revenue over the previous 12 months.
And at the moment, because they were still awaiting legal approval, Red White & Bloom’s valuation hasn’t counted a single penny of that revenue.
With most competitors being valued at 10x revenues, that means this acquisition could be worth a fortune.
But now, after completing pre-qualification in the state of Michigan, they’ve finally cleared the last hurdle.
It’s a milestone they’ve been waiting on for over 9 months.
The company has already fully funded the acquisition.
They’ve already established 8 stores in Michigan through the investment.
Now, once they finalize the agreement, they’re set to open another 10 stores in Michigan.
This gives Red White & Bloom the potential to more than double that $70 million revenue in short order with the addition of these new stores.
And it’s easy to picture the kind of success this could lead to given what their team has been able to accomplish already.
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In Red White & Bloom’s case, the track record speaks for itself, as Brad Rogers, their CEO, has a long and successful history in the cannabis industry.
He was the co-founder of Mettrum Health before starting Red White & Bloom.
During his time there, he helped build one of the first commercially-scaled Canadian production facilities for medicinal cannabis.
Mettrum Health was then acquired in the largest acquisition in the industry at the time, being acquired by industry giant, Canopy Growth Corp, for a whopping $430 million.
From there, Rogers served as president of CannTrust, one of Canada’s leading cannabis producers.
And with Rogers at the helm, the company thrived… with the stock surging 450% during his time there.
That’s the reason those in the industry have been following Red White & Bloom’s growth so closely.
Many have been eagerly awaiting the details of their acquisition in Michigan, especially since they’ve already seen what kind of success Rogers has had in the cannabis industry throughout his career.
But the news is even more exciting when considering the strong track record Red White & Bloom has already built in several states in the growing United States market.
Taking Over Biggest Markets
Over the last few years, Red White & Bloom has become a top player in 3 of the top revenue-producing states in the United States.
They’ve done this in part by driving $150 million just through their acquisition of top cannabis brand, Platinum Vapes.
The Platinum Vapes brand includes a wide range of THC and CBD-based products including vapes, darts, gummies, chocolates, and premium cannabis flower.
And these have been a major hit for their customers even before winning recent awards that brought more attention their way.
Last year, Platinum Vapes were awarded the Thrillist Best of 2020 Edible award for their delicious baked apple pie gummies.
And they also won an award at the Farmers Cup for their raspberry cheesecake chocolate bar.
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The acquisition of Platinum Vapes has been a huge win for Red White & Bloom, as it opened up an already accelerating revenue stream across Michigan, California, and Oklahoma.
They’re now selling Platinum Vapes products in over 750 retailers across these states.
And they even managed to team up with a delivery-as-a-service platform, Budee, recently to expand their footprint even further.
That partnership opens the door to deliver their Platinum Vapes products directly to the front doors of 92% of people in the state of California.
That’s an incredible opportunity as it could allow them to deliver their full range of top quality products to over 36 million new potential customers.
But they’re not stopping there.
In the days ahead, they plan to roll their Platinum Vapes line out in Arizona, Florida, and Illinois as well.
Add to that their deal with the most recognizable brand in cannabis, and you’ll see why so many are keeping their eye on Red White & Bloom’s next move.
High Times has been a premiere name in the cannabis space for over 45 years.
And Red White & Bloom managed to capture exclusive rights to brand their stores and create products under the brand in 3 of the top revenue-producing states for cannabis.
Now, as the company has built up an impressive track record in several states already, the political landscape in the United States continues to open up more opportunities in this market.
That’s why Red White & Bloom is excited to move into Arizona, after the state legalized recreational cannabis use late last year.
They plan to add the Platinum Vapes line to 16 dispensaries there through one of the top 5 multi-state operators.
With their pending acquisitions, Red White & Bloom will soon be operating in 6 of the top 10 cannabis selling states in the United States.
But because their acquisition in Michigan is still not officially on the books, Red White & Bloom is still trading at a deep discount.
While most of their competitors are trading for an average of 15x EBITDA, the company’s shares are currently trading at just over 3x pro-forma EBITDA (upon all open acquisitions becoming closed).
That makes Red White & Bloom possibly the most undervalued player in the fast-growing US cannabis market.
And that’s why now is the ideal time for investors as this news is set to put millions more in revenue on the books overnight.
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