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Cannabis Company Greenlane Makes its Market Debut

Written by Monica Savaglia
Posted April 23, 2019

The cannabis industry continues to experience a lot of movement.

It’s crazy to think how much this industry has evolved in a short period of time. People, investors, and business owners are all beyond excited about where the industry is going. And I’m excited to be along for the ride. The opportunities for growing the industry and making profits seem endless.

As of right now, 33 U.S. states have legalized cannabis in one way or another. Ten of those states allow recreational adult-use sale. Despite this progress, there are still states out there that are fighting for full cannabis legalization. With the progress that has been made in the past few years, I can see full legalization getting closer and closer every day.

Last year the 2018 Farm Bill was signed, which made hemp legal nationwide and opened up the market for the sale of CBD products ranging from lotions and pet products to sleep aids that contain cannabis. CBD products have been in high demand, and now adult consumers are able to legally buy them without any worries of doing something illegal.

The demand for cannabis is obvious. And businesses want to capitalize on that demand. There’s one company that I want to discuss this week that has been working in the industry for some time and that just had its public offering last week on Thursday, April 18.

Getting to Know Greenlane

The company is called Greenlane, and it was first established back in 2005 by its cofounder and CEO Aaron LoCascio. Even back in 2005, LoCascio saw the potential of the industry, but he probably had no idea how fast it would grow. Well, I’m sure he was hoping it would take off for his business’ sake.

When Greenlane began, LoCascio was 20 years old and decided that he would max out his $4,000 credit card to finance the purchase of some Volcano vaporizers.

Storz & Bickel sold these Volcano vaporizers — devices that don’t fire weed but rather bring it to the pre-combustion vapor state. Their patented Volcano product had a detachable balloon chamber on top. It was extremely popular for consumers, and LoCascio saw an opportunity to sell them online that he didn’t want to miss out on. LoCascio said, “I reached out to Storz & Bickel, who were selling the product. They offered no credit terms and said I had to pay in advance.” So he bought as many as he could on his $4,000 credit card limit.

Fourteen years have passed, and Greenlane has created a name for itself as having one of the largest distribution footprints for vaporizers and smoking accessories in North America. In just North America, Greenlane accounts for 6,600 customers that represent nearly 10,000 retail locations.

Greenlane’s 2018 sales were impressive compared to the previous year. The company reported $178.9 million in sales, up from the $88.3 million made in 2017.

And it has created relationships with influential companies in the industry. For example, Greenlane has a steady relationship with Juul Labs Inc. Juul Labs is the manufacturer of Juul smoking pods and devices. The company consists of 37% of Greenlane’s business. Other suppliers also find Greenlane extremely useful and its role in the distribution marketplace to be crucial.

Dave Richmond, founder and CEO of Banana Bros. and creator of the precision cannabis grinding device OTTO, has praised the relationship that Banana Bros. has with Greenlane. Richmond wanted to have marketing and distribution handled by someone else that he knew he could trust, and so he made the decision to work with Greenlane. Richmond said, “I wanted a distribution partner who knew the landscape and could bring an A-game to us. And that’s exactly what they did.”

Greenlane is focused on creating and maintaining partnerships like it has with Juul Labs and Banana Bros. Some plans for the near future include developing mergers and acquisitions while attracting smart and talented employees that are focused on growing Greenlane. The company’s future plans include expanding into Europe and South America.

These areas have huge populations that are interested in cannabis from a business point of view. LoCascio said, “One of the reasons why we went public was to accelerate the expansion of our geographical footprint.”

Now, let’s take a look at its recent IPO.

Greenlane’s IPO

Greenlane is a different approach to investing in the cannabis industry. Some investors are hesitant because this whole industry is brand new and there are still some grey areas. However, with Greenlane, investors can feel safe when investing in this U.S.-based cannabis investment.

Its business doesn’t break any federal laws because its business has nothing to do with the plant itself. Greenlane distributes items like cannabis carrying cases, grinders, pipes, rolling papers, vapes, and vape accessories. These items do not violate any federal drug paraphernalia laws.

The company ships on average 438,000 packages per year through its VaporNation.com and VapeWorld.com. It also operates six distribution centers where it sells to almost 9,700 retail outlets.

The company made its market debut on the Nasdaq on April 18 under the symbol “GNLN.” It priced its IPO at $17 per share, and it opened up the market on April 18 at $29 per share — 70% higher than its IPO price.

Greenlane is poised for growth, and as the country continues to de-stigmatize marijuana, we could see full legalization in the next few years, which could really put a company like Greenlane on top.

If you found this article interesting and would like to learn more about companies before and after they make their initial public offerings, then click here. Expanding your knowledge is what will get you ahead of the rest.

Until next time,

Monica Savaglia Signature Park Avenue Digest

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.

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