Welcome to the 2018 version of The CBE Ancillary Business (AB) list (CBE’s 3rd AB List) where we identify top suppliers to the Cannabis Industry to help regulated licensees decide who to invite to the request for proposal process when they are looking for a specific solution set.
Once again companies, the majority of whom are privately held (and therefore skittish about having CBE ranking them by their actual year-end revenue numbers that they have supplied), are ranked in revenue ranges. Data points that CBE includes in the list include a link to their website, headquarter location, key executives in leading management positions, employee head-count and AB supplier category, all as of year-end 2018.
CBE began the data collection process back in May 2018 when we distributed a link to the actual survey via CBE Insights e-newsletters that were distributed to our readership of 30,000 plus Cannabis Industry executives. In addition to the 150 or completed surveys that we received from May-August this year, CBE also estimated revenues for companies where the data required was available or spoke directly to principles at listed companies.
Categories that companies were ranked by tend to follow those found in the CBE Business Directory which includes listings for roughly 1000 product & service suppliers to industry licensees.
They included:
As has been the case with the CBE Ancillary Business list since it was introduced in 2015, Cultivation Product and Services suppliers had the largest number of companies included in this year’s list followed by Consulting Services, Extraction Equipment and Services, Media/Publishing/Events, Packaging and Legal Service suppliers.
Notable on this year’s list was the revenue increases in two particular categories that are very much tied to the rush to establish brands nation and worldwide. Packaging, which probably has the most stringent regulatory oversight compliance requirements of any ancillary business product or service category offerings (banking and lab testing among other categories that are tightly regulated as well) saw a couple of listed companies see their revenues soar highlighted by the substantial revenue gains made by publicly traded KushCo Holdings, Inc. (KSHB) and privately held CoolJarz. Congrats to Nick Kovacevich and Ken Loritz for building their company’s revenue streams.
As a result of acquisitions to diversify its offerings to licensees nationwide and revenue gains from its core packaging business KushCo jumped from the $15-$24.99 million revenue segment on the 2017 CBE 150 AB list to be ranked #4 overall on the 2018 list in the $75-$99.99 Million Revenue Range. CoolJarz jumped to the #5 position on the 2018 list with a huge revenue gain placing them in the $50-$74.99 Million Revenue Range this year.
Equally noteworthy was the number of extraction equipment companies that saw a category revenue increase from reporting companies that was among the largest this year. The category had nine plus companies, led by Waters (Extraction and Lab Equipment), Precision Extraction, and Vitalis Extraction Technology, generating revenues in excess of $10 Million in 2018. We also don’t want to forget to give a shout out to Shimadzu which was one of the first scientific and lab equipment companies to decide to sell to the cannabis industry.
Considering the rush to expand footprints by leading processed goods manufactures like Wana Brands Kiva, Bhang, the explosion in companies that market CBD products as well as the large, vertically integrated multi-state licensees like Curaleaf, Columbia Care, Harvest Health and Recreation, it’s no wonder that CBE saw huge revenue gains made by the packaging and extraction categories as licensees pursue national Brand establishment in the US and Canada.
Additionally, the expansion of revenues for companies in these categories as well as Software bodes well for start-ups hoping to be gobbled up when the larger cross industry companies look to enter the space post national legalization in the US. keep an eye out for additional consolidation and a flurry of new cannapreneur millionaires in the years ahead!
This year’s top ranked company, Hawthorne Gardening Company, a division of Scott’s Miracle-Gro (SMG (NYSE)), led by Chris Hagedorn, leads the way again this year from the Cultivation Product and Services category. Hawthorne saw their portfolio of offerings continue to grow in 2018 and is poised for revenue expansion now that licenses are being or about to be awarded in newly regulated states California, Florida, Ohio, Oklahoma, and Pennsylvania etc.. Below is a list of the categories with the most listees as well as the leaders by revenue in each category.
CBE would like to congratulate and thank all of those who have made this year’s list for their tireless efforts to build the supply chain for the Cannabis Industry. We have believed since day one that transparency helps establish industry legitimacy and applaud the risk that many of you have taken to fuel industry growth.
We also want to especially thank our contributing experts, many of whom work for ancillary businesses that have taken their time to share best practices and advice, based on their area’s of expertise to bring to life CBE’s mission of helping industry businesses grow and prosper as the march towards full legalization continues. Many of CBE’s contributors have guided to discover and highlight the 2018 CBE 155 AB list members and next year’s ranking of Producer, Processor and Retail licensees. And, we hope that all of the lists that CBE produces to benchmark professional achievement in the Cannabis Industry contribute to helping legitimate business owners attract investment dollars from the capital market system here and abroad to continue to prime the pump for the fastest growing industry in the country and one that will eventually be legal on a federal basis here in the US.
Keep an eye out for companies recognized by CBE, 2018 listed companies all have the option of including the starburst that recognizes that they are part of a well researched list that should be included on licensee RFP’s when they are looking for experienced Cannabis Industry suppliers.
Cheers and Happy Holidays!
Rob Meagher & Colleen Hobbs
CBE Press LLC Co-Founders and Partners
Rob Meagher, CBE’s Founder, President and Editor-in-Chief is a 30 year veteran of the media world. His career has spanned from stints representing the Washington Post, USA Weekend, Reader’s Digest, Financial World & Corporate Finance to the technology world where he worked at International Data Group and Ziff Davis where he was part of the launch team for The Web Magazine, Yahoo Internet Life, Smart Business and Expedia Travels before starting his own marketing and Publisher’s Representative Firm. He also ran all print and online media sales and marketing for the Society for Human Resource Management before partnering with Forbes and then Fortune to create Special Sections covering a variety of topics. Rob, who started CBE Press in 2014, can be contacted at [email protected].
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