CannaRoyalty (OTCQX:CNNRF) shares have been continually on an upward trend over the last year, driven by its strategy to become the largest cannabis distributor in the Californian and Canadian markets. CNNRF stock price rose 60% in the previous six months, extending the twelve months rally to 200%. Its stock price currently trades $4 a share –with the 52-week trading range of $1.15 – $4.58 per share.
Source: MarketWatch
Combined with investments in organic growth opportunities, CannaRoyalty has been acquiring other cannabis companies that are aligning with its future strategies.
The Largest Cannabis Distributor?
The company has completed several acquisitions since the start of this year to support its revenue growth in the cannabis distribution markets. It recently completed an acquisition of Alta and River distributors, that generated a substantial revenue of $31.9 million last year.
Kaya and FloraCal acquisitions are also likely to generate substantial revenue for CannaRoyalty in the days to come. Kaya and FloraCal have generated revenue in the ranges of $8 million and $6.4 million in 2017.
Its first-quarter revenue was standing close to $0.6 million, up 111% from the same period last year. However, with the integration of these acquisitions, the company expects substantial revenue growth in the following quarters.
The CEO says, “The impact of these transactions and the true financial power of the platform we have assembled will become very apparent in Q2 as sequential revenue ramps significantly. This will carry over into Q3 when we expect to have our recent transactions including River and FloraCal on our books for a full quarter. And these revenues are growing as outlined in our May 4th announcement, record monthly sales at Alta as well as a banner month of sales for River.”
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Liquidity Position Supports Expansion Strategies
The cannabis company appears in a stable position to support its expansion strategy. It ended the first quarter with $4.7 million in cash. Moreover, the company expects considerable growth in its cash position in the days to come. This is due to the company’s strategy to close the bought deal financing – which will bring $16 million in net proceeds. CannaRoyalty has also $10 million available in its operating line with Sprott.
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