American CBD company Green Growth Brands (CSE:GGB) has been aggressive with its retail strategy, and on Thursday it will open its 100th Seventh Sense store, located in malls across the U.S. It’s quite a feat considering the company opened its first store in February.
Green Growth has also partnered with Abercrombie & Fitch, DSW and American Eagle, all strategic moves to help it grow its brand.
The Columbus, Ohio-based company aims to cash in on the growing popularity of CBD personal care and beauty products in the U.S. In addition to having a large distribution network today, the company sells 100 different CBD products (SKUs). Sleep aid, therapeutic and bath products are some examples of the items that it stocks.
– Peter Horvath, CEO of Green Growth Brands
Seventh Sense CBD Shop at the Fayette Mall in Lexington, Kentucky (CNW Group/Green Growth Brands)
Having a strong presence in malls and partnering with popular youthful retail chains, Green Growth has established a massive network that could lead to positive revenue growth moving forward.
We’ve seen how a well-built retail grid has been key in Charlotte’s Web‘s (TSX:CWEB) success, pushing it to the top of the CBD wellness market. While Green Growth offers different products and has a way to go to catch up to Charlotte’s Web, the path it is on could translate into similar success.
Green Growth has also launched an online site, ShopSeventhSense.com, offering consumers another way to purchase its products. On the website, customers can see a full list of the company’s shop locations.
Growth leads to expectations
With Green Growth reaching many different markets, the pressure will be for it to generate some strong sales numbers moving forward. In the company’s most recent quarterly earnings report, which ended on March 31, revenues reached more than US$5.5 million. But the company is now selling its products in a greater number of stores since then and investors will be looking for stronger sales numbers in future quarters.
Green Growth’s sales figures will be a litmus test to see just how popular CBD products are in the health and wellness segment. With significant distribution in place, the company has ensured its products are reaching a wide demographic of consumers. The only question left is whether the products will be a big enough hit to generate the sales the company is expecting.
Does the company have enough cash to fund major growth?
Investors will want to keep an eye on Green Growth’s cash flow and bottom line when it releases its next quarterly results, as the company has been on a spending spree to grow its business. Amid rapid expansion, it’s important a company isn’t stretching itself too thin.
While the store openings will help Green Growth generate more sales, the company needs to show it is still fiscally responsible. If it has to issue debt or dilute shareholders equity by issuing more shares in order to fund this expansion, that could spell trouble for the CBD retailer.
