River placed an initial purchase commitment of more than $165,000 USD for GreenRock Botanicals products, which equates to a retail value of over $400,000 USD. CR Brands expects to ship this initial order in the coming days. This is the second consumer product line that CR Brands has launched through its partnership with River in California, following the launch of its Soul Sugar Kitchen gourmet edibles line in October 2017.
"As we approach the advent of a full adult-use market in California in less than 40 days, we are ramping up commercial production for our portfolio of premium, quality cannabis products in the state," said Marc Lustig, CEO of CannaRoyalty. "With over 20 years of medical legalization and a broad range of permitted products, California is home to some of the most sophisticated cannabis consumers in the world. We have seen strong preliminary interest from consumers in our products but are still in the early days of executing our product and brand strategy. Over the next 12 months we will work to introduce new product lines and opportunistically add established, value-add brands to our portfolio in California, which can later be licensed into other key markets."
CR Brands is currently retrofitting its new Santa Rosa facility to produce the growing suite of CR Brand products in the California market. The facility is located in a commercial complex with several tenants that have been licensed for cannabis production and distribution by the city of Santa Rosa, and the company is in the process of applying for its own processing license. The facility has the capacity to accommodate significant growth in the growing CR Brands portfolio.
Dave Vautrin, President of CR Brands, added, "As a team, we have significant experience commercializing differentiated consumer products and building successful brands in the U.S. consumer-packaged goods space. Despite being in the initial phases of our growth in California, we are already pleased with the early uptake of Soul Sugar Kitchen™, which has been picked up by 92 dispensaries since its launch in September. We will next launch GreenRock Botanicals™ through the River distribution channel and will focus on growing the points of distribution for both product lines, as well as driving performance on an individual dispensary level. We are primarily focused on brand-building and uptake at this point, which will ultimately lead to sustainable traction on the top-line. Consolidating manufacturing and processing control into Santa Rosa and moving away from third-party manufacturers will also give us more control and visibility from concept to consumer and enable us to begin to optimize the price and cost equation as we scale."
The investment in River has driven the growth of CR Brands' retail footprint in California. River has agreed to a preferred product distribution arrangement with a contractual commitment by River to purchase no less than $20 million USD worth of CR Brands' portfolio of products through December 31, 2024, subject to certain conditions including the commercial viability of the products.
This announcement comes after CannaRoyalty's recent announcement that it signed a letter of intent with Æther Gardens, a vertically-integrated cannabis cultivator, extractor, and manufacturer, to launch CR Brands products into the Nevada market with a focus on Las Vegas.