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Cannabis Strategic Ventures Inc. (NUGS) Enters Trillion-Dollar Market and Prepares Cultivation Sites from San Francisco to Los Angeles

  • NUGS to benefit from approximately 40 commercial cannabis licenses throughout California
  • Company signed letter of intent to partner with a Santa Barbara County grow operation with cultivation sites that are expected to be a critical component of each brand’s supply chain

Drive 400 miles from San Francisco to Los Angeles anytime soon, and you may be passing through Cannabis Strategic Ventures Inc. (OTC: NUGS) land. The Golden State incubator and brand builder is set to benefit from a large batch of licenses awarded in cannabis-friendly communities along the stretch. Recently, NUGS announced that it had signed a letter of intent to partner with a Santa Barbara County grow operation that holds approximately 40 commercial cannabis licenses from the County of Santa Barbara, the California Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch and the CalCannabis Cultivation (http://cnw.fm/2fmG5). This impending deal signals NUGS’ commitment to its strategy of promoting brands to be category leaders in the recreational and medical cannabis sectors. The NUGS management team believes that the cultivation sites will eventually be a critical component of each brand’s supply chain.

In California, the regulatory regime for cannabis, operative since January 16, 2019, is set out in the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”). Traversing its tortuous tracks successfully may be possible for only for the most organized enterprises, like NUGS. The first stop is the Bureau of Cannabis Control (“BCC”), the lead agency in regulating commercial cannabis licenses for medical and adult-use cannabis in California.

The BCC handles the licenses for four categories of cannabis businesses, including distributors, microbusinesses, retailers and testing laboratories, as well as short-term enterprises, such as cannabis shows and events. A microbusiness license allows the cultivation of cannabis on an area smaller than 10,000 square feet, as well as the distribution of cannabis and the manufacture of products that use either non-volatile solvents or no solvents at all. In addition to these four licenses, there are 16 others at the state level, including 14 cultivation licenses (indoor, outdoor, nursery, etc.) and two manufacturing categories.

For manufacturers, a license from the Manufactured Cannabis Safety Branch (MCSB) is also required, while growers must get a license from CalCannabis Cultivation, a division of the California Department of Food and Agriculture (“CDFA”). At the county level, licensing applications will generally only be considered if state licenses are in place. In Santa Barbara County, where NUGS operates, there are eight types of permits: cultivation, distribution, microbusiness, nursery, retail, testing and volatile and non-volatile manufacturing.

Nevertheless, the travails of navigating the regulatory obstacle course are worth it. Close to 20 million people reside around the megalopolises of Los Angeles and San Francisco, and, together, the two metro areas have a GDP that is roughly the size of Mexico’s (around $1 trillion).

NUGS has a finger in other pies, too. Late last year, the company signed a deal with Biolog Inc., a company backed by Redfund Capital Corp. (CSE: LOAN) (Frankfurt: O3X4) (OTC: PNNRF), to develop water-soluble cannabis technologies for use in cannabis and phytocannabinoid-infused foods, beverages and consumer products (http://cnw.fm/U6nqm). Cannabinoids are hydrophobic and, thus, not easily soluble in water. Current cannabis formulations tend to be emulsions. Developing water-soluble versions of cannabinoids could considerably improve their range of application to beverages, foods, cosmetics and other consumer products, as well as significantly improving bioavailability.

NUGS recently acquired FITAMINS, a CBD performance brand, and it has retained Art ‘One Glove’ Jimmerson as an ambassador for the brand (http://cnw.fm/Jaj2V). Jimmerson is a former professional boxer and mixed martial arts fighter, Ultimate Fighting Championship pioneer and coach. Under the acquisition agreement, FITAMINS will be distributing its vitamin- and hemp-derived CBD formulations through a network of 600+ wholesalers that serve the Asian-American market. FITAMINS will produce a proprietary CBD product to be added to NUGS’ brand portfolio, initially targeting distribution networks in the United States and eventually expanding into Asian markets that have legalized CBD products. FITAMINS leverages a proprietary health and wellness formula containing 25 mg of hemp-derived, THC-free cannabidiol (“CBD”) and other joint-supporting vitamins that work to improve health and relieve joint and muscle pain, encouraging movement and flexibility.

For more information, visit the company’s website at www.CannabisStrategic.com

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