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Cannabis Businesses Turn to Security Experts as the Market Continues its Expansion
[January 10, 2019]

Cannabis Businesses Turn to Security Experts as the Market Continues its Expansion


NEW YORK, January 10, 2019 /PRNewswire/ --

Cannabis has spread rapidly throughout the recent years and is showing no signs of slowing down. Many countries are in the process of legalizing cannabis for medical or even potentially recreational usage. However, regardless of the segment, the widespread growth is creating many job opportunities. According to data compiled by Grand View Research, the global legal cannabis market was valued at USD 9.3 Billion in 2016 and is expected to grow at a CAGR of 34.6% from 2018 to 2025. The market is expected to continually grow due to the impending legalization which is currently ongoing in several countries and increasing demand for both medical and recreational purposes. 3 Sixty Risk Solutions Ltd. (CSE: SAFE), Cronos Group Inc. (NASDAQ: CRON), Green Thumb Industries Inc. (OTC: GTBIF), KushCo Holdings, Inc. (OTC: KSHB), Organigram Holdings Inc. (OTC: OGRMF)

Many companies within the cannabis industry are heavily focused on businesses like cultivation, distribution or retail. However, as the industry continues to expand, new requirements and services are being introduced. For example, security has become a rapidly growing sector in the cannabis market. And now that the market is growing quickly, security services are quickly becoming a necessity for businesses. Many companies are investing in security to monitor or transport cannabis as "Now, there's a very different mindset among people in the industry compared with those who got into the cannabis industry early - there's more business acumen, and a desire to get security right the first time," says Sy Alli, Chief Operating Officer for Olympus Consulting Group, LLC and former Director of Corporate Security for Dixie Brands, Inc. "More business-minded people are getting into this industry, and that makes it easier for security professionals to talk to their management about risk, compliance and continuity."

3 Sixty Risk Solutions Ltd. (CSE: SAFE) earlier this week announced breaking news that it, "expects to commence trading on the Canadian Securities Exchange today under the ticker symbol SAFE. The company, which operates through its wholly owned subsidiary, 3 Sixty Secure Corp., has also provided an operational update, which includes significant progress in expanding its security consulting, guarding and secure transport business and continued growth of its consulting services business.

'I am extremely pleased with the progress that we have made in realizing our goal of going public as a means to accelerate our strategic growth plans with enhanced access to capital,' said Thomas Gerstenecker, chief executive officer and founder of 3 Sixty. 'We successfully raised capital in October, and we have delivered on our promise to significantly grow our consulting, guard and transport customer base, which includes many of Canada's leading LPs [licensed producers], and we continue to increase the number of customers served by our consulting service. I look forward to continued execution of our growth agenda by filling what I consider a serious gap in the Canadian and U.S. cannabis security industry as recreational cannabis supply grows and matures in Canada, in the U.S. and globally.'

'Further, I would like to welcome David Hyde as president of 3 Sixty,' added Mr. Gerstenecker. 'David brings extensive industry experience as a security expert and the founder of David Hyde & Associates, Canada's leading cannabis security consultancy services. I am confident that we have assembled a world-class management team and board of directors, which positions the company extremely well as one of the largest and most experienced companies providing security services to the emerging cannabis industry within Canada.'

Operationally, the company is pleased to report that its two major business segments experienced meaningful growth in the three months ended Nov. 30, 2018:

  • 3 Sixty exited August, 2018, with more than 40 secure transport and guarding customers and more than 400 security consulting clients.
  • On a percentage basis, guarding and secure transport customers experienced the highest growth, up approximately 65 per cent following the addition of 27 new customers.
  • On an absolute basis, security consulting experienced the largest uptick in clients with the addition of 82, up approximately 20 per cent in the period.

Importantly, 3 Sixty successfully converted five security consulting clients from one of its predecessors, Total Cannabis Security Solutions Inc. (TCSS), into guarding and secure transport customers, an achievement that reinforces the thesis that there are significant opportunities to organically grow sales through cross-sell to the combined 3 Sixty and TCSS customer base, which has had very little overlap to date.

The company is focused on continued growth within the Canadian and U.S. cannabis industry, with numerous opportunities to expand into adjacent security services and new industry verticals and to realize international expansion.

3 Sixty is one of Canada's leading security service providers to the cannabis sector, providing a comprehensive suite of security services, including guarding and secure transport, security consulting, security management, integrated security systems, and executive protection. 3 Sixty expects to deliver significant value to its customers, shareholders and stakeholders by:

  • Providing world-class seed-to-sale security expertise to the cannabis industry: As a leading security company with a focus on cannabis, 3 Sixty expects to continue to grow its leadership position in core security services and security consulting. The company is led by executives with substantial experience in security services, military, police services, security consulting and NGOs (non-governmental organizations), which the company believes is unique in the Canadian and U.S. security industry serving the cannabis sector.
  • Leveraging the high-growth cannabis industry as the cornerstone of 3 Sixty's business: The company has been a pioneer in the cannabis industry since 2013. Deep expertise and first-mover advantage in the cannabis industry has positioned 3 Sixty favourably in a complex and highly regulated industry.
  • Taking advantage of significant organic growth opportunities in new geographies, verticals and industries: Canadian cannabis is at the core of 3 Sixty's business. However, the company believes that there are significant growth opportunities available by adding to the portfolio of security services offere to cannabis clients and through expansion to the highly lucrative U.S. market. Further, the company expects to add non-cannabis customers in industries that are characterized by high-value products where security is critical. Organic growth opportunities are expected to be accelerated through the use of strategic mergers and acquisitions where opportunities arise.



About 3 Sixty Risk Solutions Ltd: Sixty Risk Solutions, operating through its wholly owned subsidiary, 3 Sixty Secure Corp., is one of Canada's leading security service providers to the cannabis sector, transporting approximately $250-million of product every month. 3 Sixty provides cannabis security consulting, guarding and secure transport security services to more than 500 customers and more than 60 licensed cannabis producers, including some of the world's largest, such as licensed producers owned by Canopy Growth Corp. 3 Sixty has a staff of over 275 employees and employs a fleet of over 60 vehicles, which management believes provides a combined security footprint to approximately 30 million square feet of patrolled area."

Cronos Group Inc. (NASDAQ: CRON) is a globally diversified and vertically integrated cannabis company with a presence across five continents. Cronos Group Inc. recently announced that it has entered into a subscription agreement with Altria Group, Inc. (NYSE: MO), pursuant to which Altria has agreed to make an approximately CAD 2.4 Billion equity investment in Cronos Group on a private placement basis in exchange for common shares in the capital of the Company. Altria will also receive Warrants of Cronos Group, that if fully exercised, would provide the Company with an additional approximately CAD 1.4 Billion of proceeds. This strategic partnership provides Cronos Group with additional financial resources, product development and commercialization capabilities, and deep regulatory expertise to better position the Company to compete, scale and lead the rapidly growing global cannabis industry. "Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth," said Cronos Group's Mike Gorenstein, Chairman, President and Chief Executive Officer. "The proceeds from Altria's investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. Importantly, Altria shares our vision of driving long-term value through innovation, and we look forward to continuing to differentiate in this area. As one of the largest holding companies in the adult consumer products sector, Altria has decades of experience in regulatory, government affairs, compliance, product development and brand management that we expect to leverage, particularly as new markets for cannabis open around the world."


Green Thumb Industries Inc. (OTCQX: GTBIF), a national cannabis cultivator, processor and dispensary operator, is dedicated to providing dignified access to safe and effective cannabis nationwide while giving back to the communities in which they serve. Green Thumb Industries Inc. recently announced that it has signed a definitive agreement to acquire Advanced Grow Labs LLC (AGL) and enter the Connecticut market. AGL is one of only four companies in Connecticut licensed to grow and process cannabis. The Connecticut-based cannabis company operates a 41,000 sq. ft. manufacturing facility in West Haven with the potential to expand. In addition, AGL has a 46% ownership of a recently-awarded dispensary that will be located in Westport which makes it the only vertically licensed company in the state. AGL produces and distributes a wide range of cannabis products to every operating store in the state. "We are thrilled that AGL is joining the GTI team and look forward to continuing to serve Connecticut communities with high-quality cannabis products," said GTI Founder and Chief Executive Officer Ben Kovler. "AGL is a highly successful company in a limited license state with a fantastic management team that will continue to run the business. We are full steam ahead executing on GTI's expansion plans as we look to create shareholder value. This transaction is an example of that given the attractive multiples. In the past two months alone, we announced the acquisition of Nevada-based Integral Associates; were awarded additional retail licenses for 12 stores in Pennsylvania; and entered the New Jersey market with a cultivation, processing and retail license win. We are now solidly positioned in the tri-state area with our entry into Connecticut via AGL. The momentum is strong."

KushCo Holdings, Inc. (OTCQB: KSHB) is the parent company to a strategically integrated group of business units that are transformative leaders across several industries. KushCo Holdings, Inc., the parent company of innovative industry leaders such as Kush Supply Co., Kush Energy, The Hybrid Creative, and Koleto Innovations, which provide a range of services and products for a variety of industries including the regulated cannabis and CBD industries, today reported financial results for its first fiscal quarter of 2019, for the period ended November 30, 2018. Revenue was up 186% Year-over-Year to USD 25.3 Million. Revenue exceeded the previous quarterly high of approximately USD 20 Million in the fourth fiscal quarter of 2018, representing a 26.5% increase. Nick Kovacevich, Chairman and Chief Executive Officer, commented, "Coming off an exceptionally strong fiscal 2018, we continued to retain and grow our customer base, grow market share and drive sales across all our key markets in the first fiscal quarter of 2019. This drove record growth in the quarter, with revenues of USD 25.3 Million, representing 186% growth, compared with approximately USD 8.8 Million in the first fiscal quarter of 2018. This strong performance reflects the strength of our business model, which leverages our ecosystem of diverse business units and product categories to cross sell product classes, reinforce the sticky nature of our business and support stable revenue growth."

Organigram Holdings Inc. (OTCQX: OGRMF) last month announced its 2018 fiscal year and fourth quarter results. The company reported report record net sales of USD 12.4 million for the 2018 fiscal year, up 131% from USD 5.4 million in 2017. "The importance of 2018 can not be overstated for Organigram as well as the industry," said Greg Engel, the Company's Chief Executive Officer. "We are incredibly proud of our ability to meet the challenges of scaling our business in preparation for the adult recreational use market. We are pleased with our progress to date and believe that we have performed well in a highly competitive space while always maintaining a sustainable cost structure. Ultimately, it is our view that our Moncton Campus will be seen as a crown jewel in the industry as it is able to produce consistent, high-quality indoor grown product at scale to support our brands with the lowest dried flower cultivation costs reported to date in Canada."

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