FSD - An Unparalleled Opportunity to Capitalize on Canada's Marijuana Legalization
October 10 2018 - 8:00AM
InvestorsHub NewsWire
Given their strategic investments, attractive
balance sheet and no debt, FSD Pharma (OTCMKTS: FSDDF) (CNSX: HUGE) is a prime candidate for
one of the biggest buyouts in the sector.
Toronto, ON -- October 10, 2018 -- InvestorsHub
NewsWire
October 17th is the Deadline for
Canadian legalization of marijuana. It has raised many
questions, including how large the market for cannabis in Canada
will be and whether there will be enough product on store shelves.
Estimates are from $4 billion to $10 billion in the first few
years of implementation.
FSD Pharma (OTCMKTS: FSDDF) (CNSX: HUGE) through its wholly-owned subsidiary FV Pharma,
is a licensed producer of marijuana under the Access to Cannabis
for Medical Purposes Regulations. Headquartered at the 70-acre
former Kraft Heinz Co. (NASDAQ: KHC) plant in
Cobourg, Ontario, FV Pharma’s mission is to transform the
facility into the largest hydroponic indoor cannabis facility in
the world.
Additionally, they have intelligently
secured strategic, highly
liquid investments in 6
companies with Incredible Potential ROI, access to their
products, customers, and/or profits. With their incredible
balance sheet showing No Debt, $31M in Cash, and $51M in
assets, this places them in an ideal situation for
a major acquisition from the beverage or tobacco industry. FSD
Pharma is also actively pursuing opportunities to uplist to
NASDAQ.
FSD Pharma (OTCMKTS: FSDDF) (CNSX: HUGE) might be your last chance to get in early
in the Canadian Cannabis Sector boom.
Capturing market
share early
Some analysts think the legalization in
Canada may pressure the United States
to accelerate
legalization in some capacity, as states
continue to take matters into their own hands by legalizing
locally. US-based companies are forced to sit back and watch
Canadian companies like FSD Pharma take market share of
international export opportunity.
With deals such as Constellation Brands’ recent
increased $4 billion stake in Canopy Growth Corp. and
reports of Coca-Cola’s interest in CBD, multinational
companies are stepping in and all eyeing
Canada, with companies projecting a market of nearly
$13 billion in the U.S. in 2019.
Given their strategic investments, attractive
balance sheet and no debt, this makes FSD Pharma a prime
candidate for one of the biggest buyouts in the
sector.
One
longtime cannabis executive, Chuck Rifici, says that one of his
concerns in regard to legalization in Canada is the product, as
provinces are implementing the rollout, and it is unclear how much
cannabis will be needed to meet demand.
Earlier this week, FSD announced that the
Company has received its first delivery of manufacturing equipment
at its Cobourg plant from Canntab Therapeutics Limited,
a leader in the rapidly growing cannabis pill market. The
manufacturing equipment consists of a fully GMP High output Tablet
press capable of pressing more than 1,500,000 tablets per
day, as well as blending machinery, large-scale process and
drying equipment and packaging equipment.
Mr. Jeffrey
Renwick, Chief Executive Officer of Canntab,
said:
“With this first delivery of
manufacturing equipment at the Cobourg plant, we can begin the
process of setting up our manufacturing space in collaboration with
FSD Pharma. We expect manufacturing of our suite of novel cannabis
oral dose delivery platforms, including gel capsules and tablets to
begin in earnest.”
Also, Zeeshan Saeed, EVP,
Director, and Co-Founder of FSD
Pharma, said:
“We are thrilled that Canntab is moving so quickly to set up
its manufacturing facility at our Company. We too are moving
quickly to build out our own 220,000 square feet of additional
manufacturing capacity in Cobourg in collaboration with Auxly. This
is truly an exciting time at FSD Pharma.”
The
facility
The
Cobourg facility has 40 acres of land ready for development,
and expansion capability of nearly 4 Million Square
Feet. The building is ready for rapid growth with rail
lines that feed directly into the facility, and 26 loading docks.
Because they utilize indoor hydroponic production they ensure
product consistency 365 days per year, allowing control of product
quality, costs of production and
cultivation.
Read CNBC’s article about FSD and their
facility.
Phased expansion
plans at the Cobourg Facility
- 40
acres of its current 70 acres of land at its Cobourg facility is
primed for development
- In
phase 1 of its growth plans with 25,000 square feet dedicated to
growing high-quality pharmaceutical-grade cannabis flower at the
Cobourg facility.
- Announced $55 million in funding to expand phase
1 to an additional 220,000 square feet of production. The build-out
is expected to be completed by December
2018.
- Phase 1 – 220,000 square foot build-out:
includes a research and development lab focused on advancements in
LED lighting, nutrient testing, breeding and genetics research with
dedicated space for large-scale extraction
capabilities.
- Phase 2- expansion of up to 820,000 square
feet.
- Expansion capability of up to 3,896,000 square
feet.
Cannabis
production at the Cobourg
Facility
- First harvest in July 2018 with another harvest
planned in August 2018. Monthly harvesting from September 2018. At
full capacity, the Cobourg facility will be able to produce 400
million grams of dried cannabis flower per
year.
- Indoor hydroponic production ensures product
consistency 365 days per year.
- Operations under one roof create economies of
scale and cost efficiencies, allowing control of product quality
and costs of production and cultivation.
- On-site: electrical substation, natural gas
lines, multiple water intakes, and rail lines that feed directly
into the facility with 26 loading docks.
Milestones
October 17,
2018. October
17th is the Deadline for Canadian legalization of marijuana. It has
raised many questions, including how large the market for
cannabis in Canada will be and whether there will be enough product
on store shelves. Estimates are from $4 billion to $10 billion
in the first few years of implementation. There are
implications not only across the country but for its neighbor the
U.S., where the drug remains illegal at the federal level. Some
analysts think the move may pressure the United States to
accelerate legalization in some capacity, as states continue to
take matters into their own hands by legalizing
locally.
August 31,
2018. FSD
Pharma reported its second-quarter 2018 results, indicating
that the Company had $31.7 million in cash and equivalents and
no debt. FSD Pharma plans to have one of the largest indoor
grow facility, in Cobourg, Ontario, with a total grow
capacity in excess of three million square feet upon
completion. Annual output from the facility is
expected to be about 400 million grams, of which 200 million grams
would be attributed to FSD Pharma.
September 27,
2018. Ontario
government introduces legislation that would open up
recreational cannabis retail to the private sector. FV Pharma
expressed their intention to target all legal aspects of
the cannabis industry, including cultivation, processing,
manufacturing, extracts, research and development by operating
one of the largest production facilities in North
America, with plans to hire 1,500 employees over the next
several years.
The
Company purchased the former Kraft plant in Cobourg in 2016 and
expects to utilize the entire 3.8 million square foot facility for
the production of various strains of cannabis, including many
ancillary products. The company anticipates reaching full
production capacity by 2021, with retail being a key element of the
company’s growth.
September 13,
2018. FSD
Pharma announced a strategic partnership with JJAMACANN Inc. to
pursue opportunities in the Jamaican cannabis
market. FSD has
signed a Letter of Intent (LOI) with JJAMACANN Inc. to form a
joint venture operating as FSD Jamaica, effective September
10, 2018.
As
part of the LOI, FSD Jamaica will establish an experimental centre
for the development of cannabis and cannabinoid genetics suitable
to cultivate in Jamaica with the intent to create a genetics
and seed bank of innovative cannabis and hemp products for the
Jamaican market and the Canadian market. FSD Jamaica will
partner with a local player named Nature’s Purest Limited (NPL), a
Jamaican corporation with a cultivation license and existing
operations in Jamaica. FSD Jamaica plans to commence sales
by 2019.
September 18,
2018. FSD
Pharma’s wholly-owned subsidiary, FV Pharma, signed a
definitive agreement with Canntab Therapeutics Limited (CSE:PILL). As per the agreement, FV Pharma will
assist Canntab in obtaining a license to process and sell cannabis
products and will provide Canntab with up to 10,000 square
feet of space at its facility in Cobourg,
Ontario. At this facility, Canntab will set
up its operations and produce a suite of novel cannabis oral dose
delivery platforms, such as gel capsules and tablets, and other
types of cannabis-based products, such as sleep aids and pain
relievers.
According to the terms of the collaboration,
Canntab will provide FSD Pharma with 50% of the profits that
Canntab receives on any retail sales of Canntab Products
through channels that are established by FSD Pharma and FSD
Pharma will be entitled to retain 50% of the profits on FSD
Pharma’s sales of the Canntab products. In addition, Canntab will
pay FSD Pharma a royalty of 3.5% of Canntab’s sale price for
all Canntab products that are manufactured and sold from the
Canntab premises.
See FSD covered by CNBC Squawk
Box
Strategic investments and
partnerships
Joint venture with Auxly Cannabis Group Inc.
(TSX.V:XLY)
- XLY
will 100% finance and construct the buildout of the former Kraft
Facility with 55 million approved in Phase 1 development
budget.
- FV
Pharma will operate and recover all costs plus 10% and receive
50.1% of all production. The expected allocation will result in
200M Grams of Cannabis per annum for FV Pharma’s Benefit (subject
to full-capacity being achieved).
- Blueprint rendering for first 220,000 sq. ft.
now complete and expected to break ground in Q3 2018 with
production by Jan 2019.
- XLY
to bring expertise in design, development, financing and
operations.
Strategic investment in Cannara Biotech
Inc.
- FV
Pharma is a large shareholder of Canarra and will occupy over
105,000 square feet of Cannara’s 625,000 square foot facility,
which sits on 27 acres of land and is located within a one hour
drive from Montreal.
- Combined grow space of over 1.245 million square
feet of indoor capacity.
- Cannara is underway in the application process
under the ACMPR and plans to be the largest indoor cultivation
facility in Quebec.
Strategic investment in High Tide
Ventures
- A
fully integrated retail distribution
company
- High Tide has 2 licence applications in the
province of Saskatchewan, 8 applications in BC and at least 25
applications were filed in Ontario (Canada’s biggest
province)
- Owns 4 of Canada’s most prominent retail brands:
RGR Canada Inc., Smokers Corner (largest chain of cannabis
accessory stores in Canada), Canna Cabana, and subject to
shareholder approval, will own Famous
Brandz).
Strategic alliance with SciCann
Therapeutics
- Canadian-Israeli specialty pharmaceutical
company dedicated to the development and commercialization of novel
and disruptive pharmaceutical products.
- Recently launched a comprehensive sponsored
research program in Tel Aviv University focused on the
cardiovascular disease field with cannabinoid-based treatments for
the prevention and treatment of atherosclerosis, the underlying
factor for most cases of stroke and cardiac stenosis events in the
western world. The global Coronary Artery Disease therapeutics
market is projected to surpass $15 billion in
2018.
- SciCann Therapeutics Inc received positive
results of a pre-clinical efficacy study with its proprietary,
patent-pending “Steady Stomach” CBD combination product for
Inflammatory Bowel Disease (IBD), as observed in a gold standard
rodent model for Ulcerative Colitis.
- FSD
Pharma Inc.’s wholly-owned subsidiary, FV Pharma Inc., will invest
up to $3M for a 15% equity stake in
SciCann.
- FV
Pharma has an exclusive license in Canada for the production and
distribution of a line of proprietary cannabinoid-based, patent
pending and indication-specific products developed by
SciCann.
- Dr.
Zohar Koren, co-founder and CEO is Head of Scientific Advisory
Board
Collaboration/Profit-Sharing Agreement with
Canntab Therapeutics Ltd.
- A
Canadian cannabis oral dosage formulation company based in Markham
Ontario, engaged in the research and development of advanced
pharmaceutical grade formulations of
cannabinoids.
- Has
developed in-house technology to deliver standardized medical
cannabis extract from selective strains in a variety of
extended/sustained release pharmaceutical dosages for therapeutic
use.
- The
first company solely dedicated to the research and development of
oral dosage therapeutic formulations of
cannabis.
Source: Born2Invest
Additional
Information
Anthony Durkacz
Director, FSD Pharma Inc.
anthony@firstrepubliccapital.com
416-720-4360
Contact
Information
Investor Relations
Email: IR@fsdpharma.com
Website: www.fsdpharma.com