Gage is Building a Fast-Growing Cannabis Brand from Michigan

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

The cannabis industry in the Great Lakes State has been booming since December 2019, where Prop 1 prevailed with 56% of the vote, making it the 10th state to legalize marijuana for adult use and more than a decade for medicinal purposes. In fact, Michigan is the 3rd-largest cannabis market in the United States.

One in 9 people in the state reported using cannabis and sales reached $985 million in 2020, a staggering 250% increase from 2019. In 2021, the cannabis sales reached $149 million in June 2021, which is $1.8 billion when annualized.

Gage Growth Corp. GAGE GAEGF, a leading high-quality cannabis brand and operator in Michigan, is setting the standard in the state. The company, which has over 30 different flavors of flower in production, has built and grown operations with state and local licenses, including cultivation, processing and retail locations. 

Gage’s portfolio includes city and state approvals for 19 Class C cultivation licenses, 3 processing licenses and 15 provisioning centers. In addition, the company operates Cookies-branded dispensaries along with Gage-branded dispensaries. Cookies, one of the most well-respected lifestyle and cannabis brands in the industry, entered the Michigan legal market through its exclusive partnership with Gage. 

Growing the Michigan Market

The Michigan cannabis market is one of the largest in the U.S., just behind Colorado and California. Michigan has a population of around 10 million people and 7.7 million of this total are adults.

Recently, the state’s marijuana regulatory agency reported cannabis sales totaling $149 million in June — that's a 60% growth compared to the same month in 2020.

Gage Growth innovates and curates the highest quality cannabis experiences possible in Michigan, bringing internationally renowned brands to market. Through years of progressive industry experience, the firm’s founding partners have successfully built and grown operations with federal and state licenses, including cultivation, processing and retail locations. 

The company also expects to open and operate 20+ stores by the end of 2021, and its Q2 2021 is expected to see significant growth due to this expansion.

In addition to three owned cultivation facilities, Gage has 11 contract grow agreements spanning 11 cultivation facilities producing products that consistently command a premium price.

Why Gage?

The vertically integrated company counts with exceptional, experienced leadership and advisory board. For example, Jason Wild, one of the most respected investors in the cannabis industry, is a major shareholder of the company.

The company is committed to strengthening the cannabis industry by contributing to the advancement of individuals and groups who have been disproportionately affected by cannabis prohibition policies. Gage helps minimize the barriers to entry by offering financial and marketing support as well as resources through community partners. The company is committed to social responsibility as a core value. 

Corporate Highlights

Recently, Gage reported its financial results for the 3 months ended March 31, 2021. Below are some key accomplishments:

• Record Q1 2021 revenue of $17.6 million, an increase of 219.4% year over year and 67.9% quarter over quarter
• Ended the quarter with over $43.6 million cash
• Gross margins of 26.1% compared to 17.3% in Q4 2020, sequential quarter growth of 880 basis points
• Michigan posted $154 million of cannabis sales in April, which equates to approximately $1.85 billion when annualized, positioning the state as the 3rd-largest cannabis market in the U.S. based on this run-rate
• Eight cultivation facilities in operation (3 Gage operated and 5 contracted cultivation assets) compared to 2 cultivation facilities in Q1 2020; the company expects to expand to 14 cultivation facilities by year-end
• An average solid basket size of $158 in Q1 2021
• Expects to operate in-house processing asset in Q3 2021, leading to further margin expansion
• Entered into a strategic outdoor off-take agreement for up to 10,000 pounds of premium Gage and Cookies flower strains

For more information, visit the company’s website.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.