One company acquiring another and a retailer opening up a new shop sounds like business as usual. Except this time, both pieces of news are related to the cannabis industry.
MassRoots said today that it’s acquiring a supply-chain service company, the COWA Science Corporation, for $5.78 million to help MassRoots ramp up its ad services, as well as a number of other features. Meanwhile, Barneys—yes, the retailer—is opening up The High End, a store dedicated to CBD products and cannabis accessories. Both are further signs of the cannabis industry’s continued growth.
MassRoots, originally a social network for cannabis users, plans on increasing its offerings with the acquisition. In a statement, MassRoots said COWA, which generated $1.5 million in revenue from just “50 cannabis and hemp focused clients,” is poised to help MassRoots grow its advertising business in its dispensary lookup tool, offer packaging that’s more compliant with industry-specific regulations and a myriad of other capabilities. COWA’s previous business model included providing services around supply chain, recycling, branding and financing.
“This acquisition will be immediately accretive and allow us to better diversify ourselves in the rapidly emerging cannabis industry,” said MassRoots CEO Isaac Dietrich in a statement. “Going forward, MassRoots is confident that the addition of COWA Sciences will increase overall revenues and expand our market presence, with the goal of generating positive cash-flows from operations.”
Barneys’ The High End is opening at the retailer’s flagship location in Beverly Hills, Calif., in March, with plans to open more stores in the future. In addition to selling high-end products, Barneys is also teaming up with Beboe, a luxury CBD company that sells products like vapes, for bespoke items. The High End is part of a growing trend of new cannabis shops catering to the luxury market—similar to the audience Med Men is going after or a product like Recess is aiming for.
All of this isn’t too surprising considering a new report from cannabis marketplace Eaze found that CBD users over 50 years old grew 25 percent year over year in 2018 and that people ordered cannabis every eight seconds. Baby boomers and women are also a growing segment of the cannabis user base. The wellness category, which CBD tends to fall into, is valued at $4.2 trillion, according to a report from the Global Wellness Institute.
This week’s news is just a sign of consumer demand—and what the industry can continue to expect as more states consider legalization.