BEND, OR / ACCESSWIRE / December 5, 2017 / CLS Holdings or "CLSH" (OTC:CLSH) announced yesterday that it has entered into a definitive agreement to acquire Oasis Cannabis, a fully integrated company that provides grow, extraction, and conversion services, complete with a retail dispensary business. Oasis is currently generating approximately $650,000 per month in gross revenue through retail cannabis sales. Founded in 2015, Oasis has established itself as one of the top marijuana retailers in the state of Nevada, offering in-store and delivery service to its customers. According to Marijuana Business Daily's recent report, "Marijuana Business Factbook 2017," legal pot sales in the U.S. is expected to grow from a range of $5.1 billion to $6.1 billion this year to around $17 billion by 2021. This has cannabis businesses excited for their prospects, and marijuana stock investors chomping at the bit. The average cannabis/marijuana stock, among the one dozen largest by market cap, has more than doubled over the trailing year.
We believe the acquisition may prove to be advantageous for CLSH for several reasons. First, Oasis already generates revenues and has the necessary permits to operate a dispensary AND deliver product to customers, the importance of which cannot be overstated. Second, CLSH will be able to use its proprietary extraction methods to increase the yields from Oasis' grow and cultivation businesses. Third, CLSH could scale the Oasis retail business, by opening franchises throughout Nevada, and possibly other states in which marijuana is legal.
As we have stated in previous articles, we strongly believe the cannabis industry is prime for consolidation, because the space is so incredibly fragmented. As roll-ups occur, buyers will be able to take advantage of the inherently accretive nature of these acquisitions. In turn, companies like CLSH will be able to simultaneously scale their business through acquisitions, while cutting costs. This particular acquisition is a perfect case in point; if this transaction closes as expected, CLSH will become a fully integrated seed-to-sale business with a retail distribution arm. It's a business that would be perfectly positioned to grow exponentially, and gain market share in the cannabis space.