Green Growth Brands Inc. (CSE:GGB) said Monday it inked a deal to open up 70 new CBD stores at shopping centers operated by Brookfield Properties across the U.S.
The Ohio-based cannabis company continues to focus on key locations with high traffic as last month it announced it would be selling its CBD products in Abercrombie & Fitch stores.
Green Growth expects to have around 280 stores carrying its CBD products by the end of the year by continuing to deploy its aggressive retail strategy. The company believes the retail sector is key to its success:
– Peter Horvath, CEO of Green Growth Brands
The company already has seven locations with Brookfield Properties portfolio.
Even with Green Growth’s failed acquisition attempt last year of Aphria Inc. (NYSE:APHA)(TSX:APHA), it was still able to build its own brand without joining forces with the large Canadian cannabis firm.
And Brookfield’s CEO Sandeep Mathrani believes Green Growth has created a solid brand, which bodes well for its shopping malls:
“It is our job to bring in retail offerings and experiences that today’s consumer desires and this includes GGB’s CBD products. GGB is at the forefront of this trend and we are pleased they will expand their reach within our portfolio,” Mathrani said.
New brand launched called ‘Green Lily’
The Ohio cannabis firm also revealed it would be offering consumers a new “prestige brand” of CBD-infused personal care shops under the name of Green Lily. However, the company will limit the Green Lily shops to four locations at Brookfield Properties’ shopping centers in the near future. The brand is said to be “dedicated to empowering women.”
However, there’s proof some people are willing to pay top dollar for cannabis products, and with a potential luxury market it could be a worthwhile area for the company to focus on to achieve success.
Green Growth stock slumps amid expansion announcement
Despite Green Growth expansion news, investors weren’t running out to buy shares and the stock was down around two per cent Monday morning. Over the past three months, the Ohio cannabis company lost nearly one-third of its value and remains an expensive pot stock to own — trading at more than 50 times its sales.
With just US$6 million in sales in its most recent quarter, Green Growth is still a relatively small cannabis company. And with $34 million in losses over the past four quarters, rapid expansion will only further bruise the company’s bottom line and should give investors some pause. While Green Growth’s store expansion strategy holds potential, investors will likely want to see some results before buying.