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Editorial Coverage: The Canadian government’s commitment to
legalize recreational cannabis in July 2018 is touted as an
opportunity for investors to profit from the ongoing green blitz.
Gearing up for the anticipated spike in consumer demand,
cannabis-related businesses are lining up steady sources of supply
from the country’s licensed producers (LPs). The alcohol and
tobacco industries are also preparing to get their hands on the
plush opportunities of legalized recreational cannabis. One of
Canada’s earliest licensed cannabis producers, ABcann
Global Corp. (OTCQB: ABCCF) (TSX.V: ABCN) (ABCCF
Profile), is well-positioned to capitalize on the
market’s expansion with its computer-controlled growing platform
that helps it produce more than 250 grams of cannabis per square
foot each year, placing it among the highest yields within the
Canadian sector. Other licensed producers such as Aurora
Cannabis, Inc. (OTCQX: ACBFF) (TSX: ACB), Canopy
Growth Corp. (OTC: TWMJF) (TSX: WEED), Aphria,
Inc. (OTCQB: APHQF) (TSX: APH) and Delta 9
Cannabis, Inc. (TSX.V: NINE), are also gearing up for what
all agree will test the industry’s ability to keep up with
demand.
ABcann Global
(OTCQB: ABCCF) (TSX.V: ABCN), a manufacturer and
distributor of medical cannabis within Canada, creates a
consistent, organically grown, pesticide-free, standardized product
that keeps costs down and its physician/patient base coming back.
ABcann’s approach to growing cannabis centers on replicating the
natural environment of any geographical location for a product that
is both superior in quality and sustainable from batch to
batch. The company’s yield per square foot is significant –
100 percent over the industry average – and the quality of its
cannabis is a key factor in bringing customers back 94.7 percent of
the time. Expansion plans are funded with some $43 million in
working capital raised through multiple financings and ground has
already been broken on two facilities that will drastically
increase production capacity in 2018.
“ABcann’s first quarter as a publicly traded issuer was a
successful one, leading to the company having over $40 million in
current working capital,” the company stated in a news release
(http://nnw.fm/0B2pW). “With our strong cash
position, ABcann expects to significantly increase production
capacity in 2018 while pursuing our aggressive construction and
expansion timelines at both Vanluven and Kimmett.”
One of the biggest shakeups in Canada’s cannabis space at the
moment, however, is coming from outside the regular circles of
cultivation, processing and dispensing. In a move that was
anticipated, a leading alcoholic beverage company – Constellation
Brands — invested CDN $245 million in Canopy Growth (OTC:
TWMJF) (TSX: WEED) in exchange for nearly 10 percent
equity in the company (http://nnw.fm/MD9nU). Industry titans like
Constellation, which has stated it plans to develop and sell
cannabis-infused drinks, were fully expected to take a hard look at
the booming legal marijuana market. Buying into an already
established asset such as Canopy Growth gives this major player a
fast toehold into the cannabis sector. Anticipation is growing that
more asset acquisitions will soon follow by other leaders in the
tobacco, alcohol and pharmaceutical industries (http://nnw.fm/1pt6W).
In order to take advantage of Canada’s projected $9 billion
cannabis market, companies like ABcann must keep an eye on the
future while taking care of the present. The company’s announcement
last month that Paul Lucas will be its new independent chairman
following founder Ken Clement’s decision to step down shows a keen
eye for continuity of leadership and historical knowledge of the
industry (http://nnw.fm/n3fU0). Lucas, former president and CEO
of GlaxoSmithKline Canada, brings decades of pharmaceutical
industry experience to his new role at ABcann Global. That kind of
global experience will serve the company well as it looks to expand
its footprint in the legal cannabis industry. ABcann’s vision
includes becoming a global presence in the legalized marijuana
markets of Canada, Germany, all of Western Europe and South America
(http://nnw.fm/Z60nx).
Another key Canadian LP focused on ramping up its production is
Aurora Cannabis (OTCQX: ACBFF) (TSX: ACB), a
licensed medical marijuana company engaged in producing and
distributing cannabis to registered patients with a physician’s
prescription. Aurora operates a 55,200-square-foot production
facility in Mountain View County, Alberta, a second
40,000-square-foot production facility in Pointe-Claire, Quebec on
Montreal's West Island, and is currently constructing an
800,000-square-foot production facility at the Edmonton
International Airport. Earlier this week Aurora announced it plans
to accelerate the expiry date of common share purchase warrants for
potential proceeds of $50 million-plus (http://nnw.fm/Ohdg8), which the company says it plans
to use for expansion initiatives.
"The ability to accelerate the expiry of these warrants is an
indicator of Aurora's powerful growth and increase in shareholder
value," company CEO Terry Booth stated in the news release. "It
adds significant additional capital to our exceptional cash
position, with which we intend to continue our aggressive domestic
and international expansion strategy."
Aphria (OTCQB: APHQF) (TSX: APH), another 100
percent greenhouse-grown medical cannabis company, prides itself on
growing cannabis in natural sunlight in state-of-the-art
facilities. Through a strategic investment agreement into DFMMJ
Investment Ltd., a special purpose private company, the company is
seeking expansion targets that meet its stringent criteria in key
U.S. states that have approved medical use of marijuana (http://nnw.fm/Jb4d4).
Aphria recently announced (http://nnw.fm/alzQ3) the sale of nearly 13 million
common shares for gross proceeds of $92 million, which the company
says it will use in connection with the construction or acquisition
of domestic production facilities.
Medical marijuana dispensary Delta 9 Cannabis, Inc.
(TSX.V: NINE), headquartered in Ontario, Canada, has
stated its intent to work collaboratively with Canopy Growth in the
Manitoba cannabis market, including cannabis production and
distribution functions as each company pursues privately owned and
operated retail shops. Expanding its physical locations
is key to Delta Nine’s future success, said Delta 9
co-founder and CEO John Arbuthnot (http://nnw.fm/sWPe6).
Since 2013, Health Canada, which issues the coveted medical
marijuana commercial license, has approved fewer than 2 percent of
the 1,600 companies seeking a license to grow cannabis. The
rigorous process of becoming a licensed producer of marijuana in
Canada imposes significant barriers to companies with plans of
entering the market.
ABcann already owns and operates a fully functioning
14,500-square-foot facility in Napanee, Ontario, and owns another
65 acres of real estate with proper zoning and existing
infrastructure in place to support another facility of up to 1
million square feet. The company’s global potential can clearly be
seen through its partnership with Israel’s Syqe Medical, producer
of one of the world’s first selective-dose pharmaceutical-grade
medicinal plant inhalers. Scaling operations to achieve optimal
growth isn’t a second thought – it’s been in the planning stages
all along. For ABcann, it’s fair to say that the company’s
five-year track record in Canada upon legalization next July is
giving it a distinct head start (http://nnw.fm/8GGEu).
For more information on ABcann Global, visit: ABcann Global
(TSX.V: ABCN) (OTCQB: ABCCF).
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