Three high-profile Australian fund managers Regal Funds Management, BW Equities and Trident Capital are riding high following an investment in Canadian-listed pot stock Next Green Wave (CSE:NGW) which shot up over 10% from the previous close, following a C$27 million definitive agreement to acquire fellow cannabis peer SDC Ventures.
Chasing the cannabis investment thematic, the Australian funds stumped up more than half of Next Green Wave’s C$21 pre-IPO raise at 60 cents per share with the company today finishing at 73 cents.
Led by Australian CEO Leigh Hughes, Next Green Wave has inked an agreement to acquire SDC, which is both a leader in cannabis manufacturing and extraction techniques as well as a sales force in marijuana consumer goods.
SDC produces 45 cannabis and THC products including vape cartridges, rosins, dog products and consumables which are sold in retail outlets and marketed through eight recognised social media brand partners.
Amongst its growing list of vendors SDC products are being sold at over 700 Zumiez stores, which is a popular US skateboarding and extreme sports retailer.
The eight SDC brand partners include well known Instagram accounts, such as Loki the Wolfdog, Cary Hart the former freestyle motocross rider and husband to rock star Pink, and BMX brand ONSOMESHIT.
Combined, the brand partners hold a following of 25 million social media users.
Commenting on the acquisition Next Green Wave CEO Leigh Hughes said:
Not only does this acquisition give us an array of premium brands associated with key world-renowned influencers to penetrate global markets, it also gives us increased distribution with revenues from sales, along with direct to consumer reach, relationships and specialty extraction methods.
“Having the opportunity to market through strategic brand partners to millions of validated and loyal followers is a big deal when marketing consumer products,” he said.
As part of the acquisition the SDC team will lead Next Green Wave’s extraction and manufacturing unit.
In January this year Next Green Wave completed construction of a 35,000 ft² cannabis production facility in Coalinga, California which is adjacent to its 15 acres of cannabis-zoned development land for future growth.
The upstart company is one of only a handful of companies fully-permitted to conduct operations across the entire value chain in the US.
It is pursuing a unique seed-to-consumer business model to efficiently overcome traditional distribution barriers, which will see the company manage all stages of the production chain, from nursery and cultivation to manufacturing and retailing.