Hygrovest Ltd (ASX:HGV) and its investment manager Parallax Ventures began their diversification efforts outside of cannabis several months ago and are now starting to see the results.
HGV noted high growth and shorter paths to liquidity in many of its new investments as these sectors aren’t burdened by the challenges currently facing the cannabis space.
Additionally, within the remaining cannabis portfolio, HGV is finding liquidity events for these positions and only making additional investments into cannabis companies that are truly exceptional and can buck industry trends.
HGV has provided recent highlights and future plans for each of its portfolio companies:
Public company holdings:
- Vintage Wine Estates (NASDAQ:VWE): VWE acquired Meier’s Wine Group, out of Silverton, Ohio which is a producer, bottler, importer and marketer of specialty beverage alcohol and non-alcohol products. The company owns a bonded winery, brewery, and distilled spirits plant producing over 800,000 cases annually. The purchase was valued at about eight times Meier’s 2021 adjusted EBITDA.
- Bevcanna Enterprises Inc. (CSE:BEV, OTCQB:BVNNF): BevCanna closed the acquisition of Embark Health in January 2022 marking another exit in Hygrovest’s portfolio from a private cannabis investment to a liquid public listing. Hygrovest’s shares in the company will become free trading proportionally over the course of the next twelve months.
- Harvest One Cannabis Inc. (TSX-V:HVT, OTCQB:HRVOF): Harvest One launched its new LivRelief Infused product, Extra Strength Transdermal CBD Cream. This new product will be available at the Ontario Cannabis Store as part of the company's brand expansion within the topicals market distribution channels.
- Entourage Health (CVE:ENTG): Entourage announced the expansion of its Color Cannabis line with the launch of three new premium products in Ontario, with expected expansion across Canada throughout the first quarter of 2022.
Private company holdings:
- Medio Labs/Brainworks: Brainworks is currently experiencing rapid revenue growth with many successes in the Coronavirus testing space. The company’s focus now is to find enough staff to fulfill the high demand.
- Valo Therapeutics: Valo continues to progress its planned Phase-1candidate PeptiCRAd-1 which remains on track. Possibility of a liquidity event in Q2/2022.
- Sequoya Cannabis: Hygrovest continues to explore the options to recapitalise the company during Q1/2022.
- Southern Cannabis Holdings: SCH’s prescription vape business is growing at very high rates with significant customer retention and re-orders. The company is seeking to place this line of business at the centre of their strategic vision going forward.
- Weed Me: Weed Me, one of the largest privately held cannabis LP’s in Canada, is in process of seeking additional funding to finance its growth plans in 2022. Weed Me branded products generated net revenue of CAD22.6m in 2021 compared to CAD6.9m in 2020 and was profitable in 2021. Net revenue had strong growth acceleration in 2021, with net revenue, for the six months ended 31 December 2021, at CAD15.2m compared to CAD4.6m in the same period in 2020.
In addition to continued capital investments, HGV continues to leverage its portfolio platform so investee companies can help each other from a technical and commercial standpoint.