Green Growth Brands Inc. (OTCMKTS: GGBXF) Recovers After Aphria Inc (NYSE: APHA) Blow

Green Growth Brands Inc (OTCMKTS: GGBXF) has struggled for direction after seeing its proposed takeover of Aphria Inc (NYSE: APHA) fall through. The stock has been the subject of wild swings after starting the year on a roll, rallying to highs of $4.5. The stock did tumble as uncertainty over the proposed takeover continued to cause havoc.

Catalysts And Share Price Analysis

However, the stock has shown signs of resurgence, in recent weeks, depicted by a bounce back in share price. The bounce back has come even on the Company confirming its deal for Aphria has expired resulting in a charge of $89 million on a repurchase of shares.

Even on the Aphria setback, Green Growth Brands has continued to strengthen its prospects in the cannabis sector by making strategic moves. Expansion into Milwaukee with the opening of a first Seventh Sense CBD shop has already come into play.

The Company has also set sights on Indiana and Kentucky cannabis marketplaces with the opening of two new CBD shops as it continues to expand its retail network.

While the stock did take a hit on the Company failing to seal a deal for Aphria, it has once again started surging in continuation of a bull trend that began late last year. A bounce off the $2.80 level has opened the door for the stock to make a run for this year highs.

The immediate resistance standing in the way of the emerging uptrend is the $4 mark, above which the stock should be able to make a run for 52-week highs. Conversely, a sell-off followed by a close below the $2.80 mark could result in Green Growth Brands plunging back to the $2 a share level.

What Does Green Growth Brands Do?

Green Growth Brands is a company seeking to dominate the cannabis market with a portfolio of emotion-driven brands. The Company boasts of a robust portfolio of cannabis products that it is using to target the broader cannabis market in the U.S.

Recent Developments

Green Growth Brands market sentiments did take a hit after it became clear it would not be able to secure a deal to acquire Aphria. The takeover bid failed to meet the statutory minimum conditions prompting its termination.  The Company had already entered into a definitive agreement to accelerate the termination of certain arrangements for consideration of $89 million payable in future

Under the terms of the deal, Green Growth Brands is to repurchase 27.3 million of its common shares held by GA opportunities. The shares are to be paid through a combination of cash and secured promissory note.

“We are bringing our offer to an end on good terms with Aphria and are excited to turn our focus to our CBD personal care and retail cannabis businesses. We are actively continuing to review other partnerships and M&A opportunities to accelerate the build-out of our Company,” said Peter Horvath, CEO of Green Growth Brands.

Retail Network Expansion

While Aphria blow is a big setback, Green Growth Brands remains well positioned for robust growth in the cannabis sector. The Company is increasingly expanding its retail footprint by expanding into new markets with vast opportunities for growth.

The Company has already set foot in Milwaukee with the opening a Seventh  Sense Botanical Therapy  CBD shop at Mayfair Mall. The new store brings to six, Seventh Sense Shop opened so far across the U.S. According to the CEO, Physical shops are the Company’s strongest marketing assets. Plans are underway to have at least 100 CBD shops by mid-summer.

The new store in Milwaukee will retail high-quality botanical therapy infused care and beauty products. On offer at the store will also be CBD-infused body lotions as well as muscle balm, body wash, and bath salts.

Bottom Line

While Green Growth Brands is still reeling from the Aphria disappointment, one cannot dispute the fact that its long-term prospects are as solid as ever. Expansion into new markets allows the Company to diversify its retail footprint ideal for reducing reliance on a particular market.

The stock bouncing after a steep pullback also attests to renewed investor interest as the Aphria dust continues to settle.  The stock is likely to continue surging after a recent bounce back as there is a lot of ground to cover ahead of 52-week highs.

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Disclosure: We have no position in GGBXF or APHA and have not been compensated for this article.