New York, New York (NetworkNewsWire) – Growing marijuana in
North America, for obvious reasons, has historically been an
underground affair. Amid growing legalization in favor of
recreational and medicinal use, growing cannabis on mass scale is
rapidly becoming a necessity for companies in a burgeoning industry
driven by incredible consumer demand. Canada is ahead of the United
States in this regard, as the country legalized marijuana for
medicinal use in 2001 and recently approved national legalization
for recreational use, which will go into effect in 2018. For this
reason, Canadian companies have access to more capital needed for
production, though only three percent of growers who apply for
licensing are accepted. In a highly regulated environment, Canadian
growers undertake a significant task in learning how to grow
marijuana on a mass scale in order to meet rising demand for
high-yield, high-quality product. ABcann Global (TSX.V:
ABCN) (OTCQB: ABCCF) (ABcann
Profile) may have cracked the code for this need,
thanks to a partnership with the University of Guelph and a $30
million financing deal with Cannabis Wheaton Income Corp.
(OTC: KWFLF) (TSX.V: CBW). When the company IPO’d in May,
it joined the ranks of several other Canadian companies occupying
favorable market positions, including Canopy Growth Corp.
(OTC: TWMJF) (TSX: WEED), Aphria, Inc. (OTCQB:
APHQF) (TSX.V: APH) and Aurora Cannabis, Inc.
(OTCQX: ACBFF) (TSX.V: ACB).
As one of only three percent of companies to successfully obtain
a production license in 2014 under the Access to Cannabis for
Medical Purposes Regulations (ACMPR), and in partnership with the
University of Guelph, ABcann
Global has learned the techniques of mass yield, having
developed a unique, computer-controlled environmental system that
replicates natural growing environments. Located at the company’s
production facility in Napanee, Ontario, this controlled indoor
system integrates scalable growing chambers, LED lighting, and
organic fertilizers/soil while eliminating pesticides and toxins.
Every aspect of the process - from air quality and oxygen, to
CO2 levels, water quality, light, temperature, humidity,
nutrition, and curing - is monitored and controlled for consistent,
high-quality, mass-quantity plant production. Prioritizing growing
techniques and getting to this stage of operations took management
foresight.
Now, at just three months old, ABcann has raised $43 million in
cash, allowing it to quickly execute its expansion strategy and
business model. A significant aspect of this strategy – aside from
its advanced growing technology - is land ownership. To this
accord, ABcann owns 65 acres of land in Napanee and, with its
recent financing (http://nnw.fm/aVAL7) from Cannabis
Wheaton, is set to expand at an unprecedented rate in the
Canadian cannabis industry.
An additional $15 million investment by Cannabis Wheaton,
recognized as one of the biggest cannabis company in the world,
will support a second production facility, aside from ABcann’s
plans to build a 100,000-square-foot complex. The $30 million
financing agreement demonstrates ABcann’s potential for growth, as
Cannabis Wheaten invests in and partners with promising cannabis
companies to help them leverage their diversity and expertise to
fulfil its streaming goals. This strategy helps reduce the impact
of licensing and build-out delays, cultivation challenges, and
issues with access by clinics, pharmacies, and government
purchasing agencies. Importantly, it has its own methods of
boosting yield in the industry.
In addition to supplying medical marijuana within Canada, ABcann
is also growing its roots internationally. The company exports seed
to Australia and dried flower to Israel, and it is expected to
begin shipments to Germany in 2017. Plans for expansion are being
aided by a recently granted license from Health Canada to build
single- or double-layer grow rooms at a new facility.
Cannabis Wheaton’s investment in ABcann was priced at a $2.25
per share valuation, an approximate 160% premium over ABcann’s
current valuation between $0.61 and $0.90.
Another industry player with significant grow room is one of the
biggest growers in the world, Canopy Growth. With
a market cap of $1.2 billion and a 52-week range of $2.81-$14.39,
Canopy represents a higher-priced entry point into the Canadian
cannabis sector. The Smith Falls, Ontario-based organization
maintains diversified brands and has more than 500,000 square feet
of production capacity. Its Tweed brand is produced in an
automated, climate-controlled greenhouse facility within the former
Hershey Chocolate Factory. The company also sustains its yield
through the 50,000+ square-foot Bedrocan Canada facility, which has
implemented processes used in the Netherlands for decades. A
second, distribution-based location delivers products imported from
the Netherlands to Canadian customers.
Investors in the Canadian cannabis market also gravitate toward
Aphria, with its valuation of $655.9 million and
52-week range of $1.79-$6.60. Aphria grows 100 percent of its
products in a sunlight-powered greenhouse that churns out many
product types and blends available to health professionals and
patients via prescription. Each stage of the growing process is
tightly controlled. The company engages in water sampling, nutrient
profiling, and pest management, so no unwanted components are added
to any of its blends. Extensive laboratory testing is conducted by
in-house scientists and outside laboratories so that the potency
levels of its products and quality of its procedures are
upheld.
Vancouver, British Columbia-based Aurora
Cannabis is focused on affordable medical products and
offers free shipping across Canada. It takes pride in a
state-of-the-art facility that uses water harvested from the
Canadian Rockies. A mountain-based facility with ideal lighting and
other resources, and a drive to succeed and contribute to the
industry, are paying off. From June 2015 to November 2016, the
company saw a 1,419 percent gain, including an 887 percent climb
after launching its initial public offering. Aurora is also notable
for a mobile app in addition to its service to patients and
physicians. The app is designed to simplify the purchase of medical
cannabis using technologies such as push notifications, fingerprint
authorization, streamlined navigation, and a focus on user
experience. Fast and efficient order processing affords performance
that is helping clients from all walks of life participate in the
industry.
The growth of ABcann and the other discussed companies reflects
the “safety” of Canadian cannabis stocks versus those listed solely
in the United States, as the latter continues to wrestle with
state/federal legalization of marijuana. Without this burden, the
Canadian market is thriving. In a November 2016 report, market
research firm Canaccord Genuity Group forecast that the medical
marijuana market in Canada alone could see sales in excess of $8
billion by 2024, creating a sizable opportunity for the country’s
relatively small number of licensed producers (LPs) – and for those
who have mastered the requirements of high-volume yield. As
demonstrated by ABcann, adequate funding for expansion to achieve
high yields and growth rates is key in this increasingly
competitive landscape.
For more information on ABcann Global please
visit: ABcann Global
(TSX.V: ABCN) (OTCQB: ABCCF)
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