Cannabis Businesses Turn to Security Experts as the Market Continues its Expansion


Published on January 10, 2019

Cannabis has spread rapidly throughout the recent years and is showing no signs of slowing down. Many countries are in the process of legalizing cannabis for medical or even potentially recreational usage. However, regardless of the segment, the widespread growth is creating many job opportunities. According to data compiled by Grand View Research, the global legal cannabis market was valued at USD 9.3 Billion in 2016 and is expected to grow at a CAGR of 34.6% from 2018 to 2025. The market is expected to continually grow due to the impending legalization which is currently ongoing in several countries and increasing demand for both medical and recreational purposes. 3 Sixty Risk Solutions Ltd. (CSE: SAFE), Cronos Group Inc. (NASDAQ: CRON), Green Thumb Industries Inc. (OTC: GTBIF), KushCo Holdings, Inc. (OTC: KSHB), Organigram Holdings Inc. (OTC: OGRMF)

Many companies within the cannabis industry are heavily focused on businesses like cultivation, distribution or retail. However, as the industry continues to expand, new requirements and services are being introduced. For example, security has become a rapidly growing sector in the cannabis market. And now that the market is growing quickly, security services are quickly becoming a necessity for businesses. Many companies are investing in security to monitor or transport cannabis as “Now, there’s a very different mindset among people in the industry compared with those who got into the cannabis industry early – there’s more business acumen, and a desire to get security right the first time,” says Sy Alli, Chief Operating Officer for Olympus Consulting Group, LLC and former Director of Corporate Security for Dixie Brands, Inc. “More business-minded people are getting into this industry, and that makes it easier for security professionals to talk to their management about risk, compliance and continuity.”

3 Sixty Risk Solutions Ltd. (CSE: SAFE) earlier this week announced breaking news that it, “expects to commence trading on the Canadian Securities Exchange today under the ticker symbol SAFE. The company, which operates through its wholly owned subsidiary, 3 Sixty Secure Corp., has also provided an operational update, which includes significant progress in expanding its security consulting, guarding and secure transport business and continued growth of its consulting services business.

‘I am extremely pleased with the progress that we have made in realizing our goal of going public as a means to accelerate our strategic growth plans with enhanced access to capital,’ said Thomas Gerstenecker, chief executive officer and founder of 3 Sixty. ‘We successfully raised capital in October, and we have delivered on our promise to significantly grow our consulting, guard and transport customer base, which includes many of Canada’s leading LPs [licensed producers], and we continue to increase the number of customers served by our consulting service. I look forward to continued execution of our growth agenda by filling what I consider a serious gap in the Canadian and U.S. cannabis security industry as recreational cannabis supply grows and matures in Canada, in the U.S. and globally.’

‘Further, I would like to welcome David Hyde as president of 3 Sixty,’ added Mr. Gerstenecker. ‘David brings extensive industry experience as a security expert and the founder of David Hyde & Associates, Canada’s leading cannabis security consultancy services. I am confident that we have assembled a world-class management team and board of directors, which positions the company extremely well as one of the largest and most experienced companies providing security services to the emerging cannabis industry within Canada.’

Operationally, the company is pleased to report that its two major business segments experienced meaningful growth in the three months ended Nov. 30, 2018:

  • 3 Sixty exited August, 2018, with more than 40 secure transport and guarding customers and more than 400 security consulting clients.
  • On a percentage basis, guarding and secure transport customers experienced the highest growth, up approximately 65 per cent following the addition of 27 new customers.
  • On an absolute basis, security consulting experienced the largest uptick in clients with the addition of 82, up approximately 20 per cent in the period.

Importantly, 3 Sixty successfully converted five security consulting clients from one of its predecessors, Total Cannabis Security Solutions Inc. (TCSS), into guarding and secure transport customers, an achievement that reinforces the thesis that there are significant opportunities to organically grow sales through cross-sell to the combined 3 Sixty and TCSS customer base, which has had very little overlap to date.

The company is focused on continued growth within the Canadian and U.S. cannabis industry, with numerous opportunities to expand into adjacent security services and new industry verticals and to realize international expansion.

3 Sixty is one of Canada’s leading security service providers to the cannabis sector, providing a comprehensive suite of security services, including guarding and secure transport, security consulting, security management, integrated security systems, and executive protection. 3 Sixty expects to deliver significant value to its customers, shareholders and stakeholders by:

  • Providing world-class seed-to-sale security expertise to the cannabis industry: As a leading security company with a focus on cannabis, 3 Sixty expects to continue to grow its leadership position in core security services and security consulting. The company is led by executives with substantial experience in security services, military, police services, security consulting and NGOs (non-governmental organizations), which the company believes is unique in the Canadian and U.S. security industry serving the cannabis sector.
  • Leveraging the high-growth cannabis industry as the cornerstone of 3 Sixty’s business: The company has been a pioneer in the cannabis industry since 2013. Deep expertise and first-mover advantage in the cannabis industry has positioned 3 Sixty favourably in a complex and highly regulated industry.
  • Taking advantage of significant organic growth opportunities in new geographies, verticals and industries: Canadian cannabis is at the core of 3 Sixty’s business. However, the company believes that there are significant growth opportunities available by adding to the portfolio of security services offered to cannabis clients and through expansion to the highly lucrative U.S. market. Further, the company expects to add non-cannabis customers in industries that are characterized by high-value products where security is critical. Organic growth opportunities are expected to be accelerated through the use of strategic mergers and acquisitions where opportunities arise.