Green Growth Brands CBD Deal announcement with Abercrombie and Fitch is a gigantic step into the mainstream retail sector.
Major fashion retailer Abercrombie & Fitch (NYSE:ANF) is cozying up with cannabis-producer Green Growth Brands (CSE:GGB). The partnership will see CBD-infused bath bombs amongst other body-care products, from GGB’s Seventh Sense brand, on sale in selected Abercrombie stores.
With the news just released, the market is slow to react but at present, GGB shares are selling for $5.31 CAD on the CSE.
Let’s check this out.
Green Growth Brands & Abercrombie
Canada’s, Green Growth Brands already has its CBD-infused personal care products on sale in DSW Shoes. Akin to that, it has a licensing agreement with Authentic Brands Group and its Greg Norman brand.
But Abercrombie is arguably the biggest retailer yet to ink a deal with the cannabis brand. The Seventh Sense products are expected to sell in 10 Abercrombie & Fitch stores in Massachusetts, California, Colorado, and Nevada.
This is to start… might there be more in the future?
The deal with Abercrombie only adds to the company’s nascent portfolio. A deal with Simon Property Group means it has access to 108 prime shop locations across several US malls. As such, it plans to open hundreds of stores under it’s “Seventh Sense” brand by the end of 2019. So far, it has five storefronts in operation.
Abercrombie have recorded positive comparable sales for the past six quarters and are due to release new earnings reports at the end of May. GGB has a great opportunity to increase brand recognition with Abercrombie backing it and could potentially see a huge revenue stream come from this deal.
Seventh Sense Range
The company’s flagship Seventh Sense range comprises of products made with hemp-derived CBD. This is the non-psychoactive ingredient found within all cannabis and is valued for its inflammation and relaxation properties.
It is products from this range that will be on sale in the Abercrombie & Fitch stores. The products include Seventh Sense Botanical Therapy body scrubs, bath bombs, cleansing oils, lotions, and lip balms.
Embracing CBD
With CBD from the hemp plant now legal across the US, several industries have been quick to embrace products including the substance. Primarily these include health stores, grocery stores, and pharmacies.
As a clothing retailer, the partnership with Abercrombie is arguably unusual but this is also why it is big news for GGB. A brand as global and familiar as Abercrombie gives added value and authenticity to GGB’s products. As such, the long-term growth potential from this deal is unquestionable.
Further, the decision to include GGB’s CBD products on its shelves is, no doubt, a statement by Abercrombie too—CBD is here to stay, and further, management’s prowess to secure a major global brand is evident for a small-cap company.
Farm Bill
As stated, hemp-derived CBD is now legal in the US and this is due to the passing of the Farm Bill in late 2018. By signing the new legislation which legalized hemp-farming in its entirety, the government effectively opened the door to a purported multi-billion dollar industry by 2020.
Green Growth Brands Stock
On 420, GGB aptly announced the addition of a new brand to its portfolio and in doing so, shares skyrocketed. Named CAMP, the brand “will be a destination for the cannabis community; a place to find premium products that support and enhance an active lifestyle”.
On the news, GGB stock gained 30% across the last two weeks of May.
GGB launched CAMP’s debut product—Happy Camper cartridges—in Nevada and they are “the first cartridge of its kind”, featuring 100% solventless rosin. With the products already to market, the company is expecting to follow CAMP’s success with the launch of the first CAMP dispensary later in the year.
Featured Image: Canva
