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marijuana stocks

Tweed Looks to Control Nearly Half of Canadian Cannabis Market

The Canadian medical cannabis industry is expected to reach $1.3 billion in size by 2024, according to Health Canada, with over 400,000 patients joining over the next nine years. With about 16 licensed producers under the new MMPR program, the market has been heating up following the Canadian Supreme Court’s ruling that cleared away at least some of the concerns related to the program and opened the door to wide-scale production and sales activity.

Tweed Marijuana Inc. (TSX Venture: TWD) (TWMJF) became the first publicly-traded, federally-regulated cannabis company in North America after becoming a licensed producer under the MMPR. With a 180,000 sq. ft. facility in Smith Falls, Ontario and a second 350,000 sq. ft. facility in Niagara-on-the-Lake, Ontario, the company has been licensed to produce up to 3,500 kg of medical marijuana per year, although it is only starting to realize that potential.

The company began shipping product to customers in May of 2014 from the Smith Falls facility. It is currently charging $6-12 per gram and operating at 40% of its anticipated peak capacity at that location. The larger Tweed Farm operation located in Niagara-on-the-Lake began shipping product in December of 2014, but operates at just 10% of its anticipated peak capacity as the company works to ramp up its operations.

During the first quarter of 2015, the company reported revenue that increased 39% over last quarter to $1,710,157, driven by a 29.56% increase in production and a 6.76% increase in the average price per gram. Net income came in at just over $1 million, or $0.02 per share, driven by gains on the changes in fair value of biological assets, while the company reported cash and equivalents of over $15 million, as of June 30, 2015.

In a recent interview, CannabisFN’s Mike Elliott met with CEO Bruce Linton to discuss the company’s background and what sets it apart from the competition, as well as the company’s acquisition of Bedrocan Canada. Mr. Linton was kind enough to join us from Tweed’s in-house lab where the sterile surfaces and instruments may have caused some slight audio issues.

Court Decisions Should Drive Demand

The Supreme Court’s temporary injunction that permits previous MMAR participants to grow and consume cannabis outside of the MMPR dealt a mild setback to the newly created industry, since a portion of the 40,000 or so existing patients wouldn’t be required to purchase medical marijuana from licensed producers. However, all future patients must go through licensed producers and the Federal Government is appealing the decision.

In June 2015, the Supreme Court separately ruled that restrictions on the use of non-dried forms of marijuana violate the rights to liberty and security of individuals, opening the door to edibles and synthetic marijuana. Licensed producers could benefit handsomely from this decision, since it will allow them to broaden their product offerings and potentially attract an increased number of patients and prescribing doctors who desire more options than just dried marijuana.

Tweed received its license to produce cannabis extracts following the Supreme Court’s edibles ruling on August 20th in its state-of-the-art Smith Falls facility. With seven new precision climate-controlled drying rooms, a dedicated trimming room, extraction room, and processing room, all approved by Health Canada, the company is well positioned to capitalize on the increase in edibles demand with a commercial-scale operation.

In early September, the company announced the acquisition of MedCannAccess that provides both a network of community engagement centers in Ontario and a 33% stake in CannScience Innovations, a drug development company based out of the MaRS Centre in Toronto working collaboratively with the University Health Network to develop cannabis extracts. These extracts incorporate Generex’s RapidMist(TM) drug delivery technology, setting it apart from competition.

The impact of these court decisions is a mixed bag over the near-term, but clearly a positive development over the long-term. While the MMAR decision slowed the initial revenue potential of licensed producers, it protected the market for future patients that is expected to grow to over 400,000 people by 2024. The ruling on non-dried forms of marijuana also opened the door to a significantly greater number of patients and prescribing doctors.

Bedrocan Acquisition Boosts Market Share

Tweed received one of the earliest MMPR licenses from Health Canada and has grown into the industry’s largest player. Over the coming months, the company’s domination of the market could grow even greater following its acquisition of Bedrocan Cannabis Corp. (CVE:BED) (OTC:BNRDF) – a major player in the space – for $61 million. The combined entity could capture between 25% and 40% of the market, according to analysts covering the stock.

Tweed and Bedrocan already have a combined 5,600 active registered customers, but the unique strengths of each brand could dramatically expand those figures over the coming quarters. Tweed has built an impressive medical brand with the first accredited CME program for doctors and the most doctor visits in the industry, while Bedrocan has a 14-year track record of standardization and international expansion opportunities.

Capturing just 20% of the to-be $1.3 billion industry, could equate to revenue of $260 million in just nine years. With a market capitalization of just C$138 million now, the company’s valuation could grow to over a half billion dollars, assuming a modest price-sales ratio of just 3x. The tobacco industry, by comparison, has a ratio above 5x. These dynamics make the stock very attractive on a discounted cash flow basis at its current levels.

The company also compares favorably to others within the growing industry:

Company Market Cap Revenue (Annualized) Growth Rate (QoQ)
Tweed Marijuana Inc. (TWD / TWMJF) C$138 Million C$6,840,628 39%
Mettrum Health Corp. (MT / MQTRF) C$45M C$4,996,684 -59%
OrganiGram Holdings Inc. (OGI / OGRMF) C$14M C$920,212* 238%*

* Latest quarter not yet available.

Looking Ahead

Tweed is well positioned to capitalize on Canada’s burgeoning medical marijuana market as a premier licensed producer. With its acquisition of Bedrocan, the company will secure an even greater portion of the market moving forward. The Supreme Court’s recent ruling on edibles, combined with the potential for a successful appeal of the MMAR ruling, creates numerous catalysts that could boost the industry’s long-term potential.

The company’s recent acquisition of MedCannAccess provides it with a unique in-person client services division and a network of existing community engagement centers, making the firm the largest licensed producer to offer in-person services in the industry. With its heavy focus on customer service, the company believes that these centers could significantly enhance the customer experience and further drive revenues over the long-term.

Over the coming quarters, the company will continue to grow its business through efforts like its collaboration with Canabo Medical Corporation to study marijuana for medical use and present the findings to healthcare practitioners. The company also continues to build up its intellectual property portfolio with agreements like its pilot program with Indoor Harvest Corp. to develop an aeroponic system to better grow medical marijuana.

For more information, visit the company’s website at www.tweed.com.

Legal Disclaimer:

Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Important factors that could cause these differences include, but are not limited to, the demand for the company’s services, governmental regulation of the cannabis industry, and the company’s ability to execute its business plan. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claim to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, has been compensated for its services in the form of cash and equity securities by DigiPath. For full disclosure please visit: http://www.cannabisfn.com/legal-disclaimer/.

SOURCE: Cannabis Financial Network

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Marijuana-Stocks-weed money wad (1)

Towards the end of June, the S&P 500 had been up almost 20% over the course of 12 months. With a historical rise on average of around 7% annually, the new average is something investors are excited about. If this looks like solid gains than you’re right, but take a look at the gains for the marijuana industry and you’ll be ecstatic. In some instances this industry has doubled or even tripled its value over the past 12 months.

Why are these stocks doing so well? One of the main reasons behind it is the rapidly changing public opinion on the plant. With more research than ever being conducted, the public is learning the truth behind marijuana’s health benefits. A 2016 poll from Gallup showed that favorability toward the legalization of marijuana hit an all time high of over 60%. As opinions get better, so do sales. Investors project the sales from U.S. legal marijuana will top $6.9 billion in 2016 and are expected to more than triple by 2021. All of this leads to a bright future for cannabis related investments.

Marijuana stocks are more profitable than ever as sales continue to grow. This does not mean one should forgo their usual research, if anything one should be extra careful because it is a new industry. That said, this is the time to diversify a portfolio to get some green with some green. Here’s four stock picks that should see profit this year.

1. Aphria
This is one of many Canadian medical marijuana producers and retailers as the Canadian marijuana industry has been around for much longer than its U.S. counterpart (legally that is).

Aphria (NASDAQOTH: APHQF) has been profitable for investors for an astounding five consecutive quarters. A new project is seeing the company enlarging its growing capacity to a 1 million square feet to help produce an estimated 75,000 kilograms of cannabis per year.

2. Canopy Growth Corp.
Yet another Canadian marijuana stock; this company currently has the highest market cap. Canopy Growth Corp. (NASDAQOTH: TWMJF) is on track to be profitable for this year. This company has benefitted from exporting some of its production overseas in places where cannabis is legal medically.

Canopy Growth also acquired Mettrum Health (which boosted its customer reach within Canada). In addition, they recently purchased 472,000 sq. ft. for its headquarters to expand grow capacity.

3. MedReleaf
This is another profitable stock called MedRelead (NASDAQOTH: MEDFF) (TSX:LEAF), which was the largest North American IPO to date. MedReleaf, like Aphria and Canopy Growth is a producer of medical cannabis for Canadian patients. The company recently raised over $74 million dollars from its IPO to fund its expansion in a facility located in Bradford, Ontario. Once the new facility is completed, MedReleaf says it will be capable of 35,000 kilograms of annual cannabis production.

4.Scotts Miracle-Gro
This emerging marijuana stock Scotts Miracle-Gro (NYSE: SMG) is expected to generate high profits for the 2017 fiscal year. The majority of Scotts’ business comes from various traditional lawn and garden care products. The other portion of business comes from hydroponics. As the traditional part of Scotts’ sees various ups and downs according to weather etc., their hydroponics section is growing very quickly up 17% from last year.

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Marijuana-Stocks-20s

Unless you’ve been hiding under a rock somewhere, you’re probably aware that the marijuana industry is booming. With more than half the U.S. legalizing medical marijuana, several legalizing recreational marijuana, and Canada recently making recreational marijuana legal nationwide, demand is greater than ever. Promising marijuana-based drugs could be on the market in the near future.

There are several reasons to think that marijuana stocks still have plenty of upward potentials. But what are some marijuana stocks to consider for investors who have yet to jump on the bandwagon? Here’s why Scotts Miracle-Gro Company (NYSE: SMG), GW Pharmaceuticals (NASDAQ: GWPH), and Canopy Growth Corporation (NASDAQOTH: TWMJF) are three marijuana stocks you could buy if you’ve never bought a marijuana stock before.

These Marijuana Stocks Be The Future Of The Industry

Scotts Miracle-Gro

Scotts Miracle-Gro doesn’t cultivate marijuana. It doesn’t develop marijuana-based drugs. Technically speaking, Scotts Miracle-Gro isn’t a marijuana stock. But it might as well be.

Much of Scotts’ focus and fortune is tied directly to the marijuana industry. Scotts Miracle-Gro provides key supplies for marijuana growers, including fertilizers, hydroponics, and lighting. The company’s business currently skews toward small recreational growers, but Scotts also has a solid presence among professional growers and a strategy to build its relationships with larger players.

Of course, not all of Scotts Miracle-Gro’s business is connected to marijuana; that’s what makes it a compelling choice for an investor who is new to investing in marijuana stocks. Buying Scotts Miracle-Gro shares allows you to participate in the growth of the marijuana industry, but with more stability than you would get buying a micro-cap marijuana stock.

GW Pharmaceuticals

GW Pharmaceuticals is, for now at least, is one of the biggest biotech specializing in the development of marijuana-based drugs. The company has one cannabis product on the market already in 16 countries outside of the U.S. — the muscular-sclerosis spasticity drug Sativex. Yet, the greatest opportunity for GW Pharmaceuticals lies in a cannabinoid drug that hasn’t been approved yet.

The biotech reported positive results last year from late-stage clinical studies evaluating cannabidiol drug Epidiolex in treating Dravet syndrome and Lennox-Gastaut syndrome (LGS). GW Pharmaceuticals is on track to submit Epidiolex for U.S. regulatory approval soon and for European approval later this year.

Canopy Growth Corporation

With Canada recently passing legal marijuana Canopy Growth Corporation could be a good way for investors to profit from the anticipated growth in the Canadian marijuana market. Canopy Growth already ranks as one of the largest providers of medical marijuana in the country.

Just how big could the Canadian marijuana market be? Professional services firm Deloitte released a report that projected the retail marijuana market in Canada could grow to $8.7 billion annually. To put that into perspective, Canopy Growth’s revenue last year was only around $30 million.

Canopy Growth should be in a great place to become an authorized provider of recreational marijuana. The company has already made several acquisitions. It wouldn’t be surprising to see Canopy Growth buy smaller operations to expand its presence in Canada and other countries.

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Marijuana-Stock-cannabis-Split

The marijuana market is growing faster than most would believe and that’s creating a lot of interest in owning marijuana stocks. However, those willing to invest their money need to choose what marijuana stocks to buy carefully.

If you have thoughts about what marijuana stocks could be top stocks in 2018, you may want to consider the catalysts ahead for GW Pharmaceuticals (NASDAQ: GWPH), Canopy Growth (TSX: WEED)(NASDAQOTH: TWMJF), and Insys Therapeutics (NASDAQ: INSY).

What Makes These Marijuana Companies Valuable?

Unlike marijuana companies that are selling medical marijuana at dispensaries in states with medical marijuana laws on the books, GW Pharmaceuticals is pursuing Food and Drug Administration approval of a marijuana-based drug for epilepsy, and a decision from the FDA could happen early in 2018.

The drug — Epidiolex — has already delivered impressive efficacy in late-stage clinical trials, and if the FDA gives it a blessing, Epidiolex can sidestep the risk that Washington, D.C., starts enforcing federal laws prohibiting marijuana sales in states that have legalized it.

The U.S. marijuana market is getting bigger as more states pass pro-pot legislation, but it faces risks because federal laws still schedule marijuana as a Class 1 drug.

Instead of risking the Trump administration’s crackdown of marijuana markets in America, it may be a better bet to look north of the border to Canada, where medical marijuana has been legal since 2001 and recreational marijuana could become legal soon.

The biggest marijuana stock in Canada is Canopy Growth, the well-funded marijuana producer behind the popular marijuana brand Tweed. Canopy Growth has over $100 million on its balance sheet, and it did $40 million in marijuana sales last fiscal year. It’s using its deep pockets and cash flow to boost grow capacity, acquire smaller competitors, and establish itself as the go-to online marketplace for legal weed when recreational marijuana gets the green light in Canada.

It’s been a rough go for Insys Therapeutics investors. The company’s been under scrutiny ever since former executives were arrested on charges of illegally marketing its opioid spray Subsys for off-label use. A revolving door in the C-suite and ongoing investigations have done little to help the company stay focused on launching its marijuana-based drug, Syndros, and developing cannabidiol drugs like Epidiolex for tough-to-treat epilepsy.

The challenges have sent shares reeling, but Insys Therapeutics has a new CEO, and he’s saying all the right things.

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marijuana-stocks- benjamins

The marijuana industry is growing at a rapid pace, and investors have surely taken notice. Much more marijuana stocks have witnessed their valuations increase substantially, or maybe run even higher, over the trailing 12-month period.

Stemming from a 2016 Gallup poll and an April 2017 CBS News poll, the percentage of those who were receptive to seeing recreational cannabis legalized nationally which has surged to a respective 60% and 61%, both all-time highs. By comparison, Gallup’s 1995 poll showed just 25% approval for such a play, while the CBS News poll was a full 21-percentage-points lower just six years ago. The public wants change at the federal level, and investors are trying to beat that change by purchasing marijuana stocks.

The sale of legal marijuana has also risen. Investment firm Cowen & Co. is looking for $50 billion in legal annual cannabis sales by 2026, while a more recent report from Marijuana Business Daily implies that legal U.S. sales could triple between 2017 and 2021, to more than $17 billion. You’d probably struggle to find such consistent growth in any other industry or sector.

Which marijuana stock could hit $1 billion in sales first?

Yet, there are dozens of marijuana stocks to choose from, and they’re clearly not all going to be winners. The top performers, assuming marijuana remains legal in select states and that it gains broader approval in Canada and Mexico, are probably going to be the pot-based businesses that can really ramp up revenue and turn a healthy profit.

If there is a significant bench mark out there for marijuana stocks, it’s the $1 billion sales mark. The first cannabis company to hit $1 billion in sales will likely validate the industry. But which marijuana stock has the best chance at being first to $1 billion in annual sales?

1. GW Pharmaceuticals
Considered the most sensible choice is cannabinoid-based drug developer GW Pharmaceuticals (NASDAQ: GWPH), which also happens to be the largest pot stock by a mile in terms of market cap.

What makes GW Pharmaceuticals so unique is its currently experimental cannabidiol therapy Epidiolex, which hit its primary endpoint in a pivotal phase 3 trials for two rare types of childhood-onset epilepsy. In both its Dravet syndrome and Lennox-Gastaut syndrome trials, Epidiolex led to a statistically significant reduction in seizure frequency compared to the placebo.

The success of these studies puts the company on track to get Epidiolex approved by the Food and Drug Administration (FDA), though nothing is ever a guarantee when it comes to the FDA. Assuming some potential for label expansion, Epidiolex could very well hit $1 billion in peak annual sales, if not a tad higher.

2. Corbus Pharmaceuticals
Corbus Pharmaceuticals (NASDAQ: CRBP) is considerably more of a wildcard than GW Pharmaceuticals, but if one specific clinical trial goes its way, it could easily leap to $1 billion in annual sales.

Corbus’ pipeline consists of a solitary drug known as anabasum, which is a synthetic oral endocannabinoid-mimetic drug that binds to the CB2 receptors expressed on immune cells and fibroblasts. Its drug is being tested in four indications, but one stands out head and shoulders above the rest: cystic fibrosis (CF). There are few drugs to treat CF, and most that are FDA approved target a very specific mutation, making their impact limited within the CF community. Anabasum is believed to have a global anti-inflammatory effect, meaning it could be taken by most, or all, CF patients.

3. Canopy Growth Corp.
Another seemingly logical marijuana stock that could thrive is Canopy Growth Corp. (NASDAQOTH: TWMJF), a producer and retailer of medical cannabis products and oils in Canada. Medical weed has been legal in Canada since 2001.

Canopy Growth has been a busy bee of late on the acquisition front. It completed its acquisition of Mettrum Health earlier this year, and it acquired a 472,000 square foot facility that includes its current corporate headquarters.

Growth by acquisition gives the company immediate access to more medical marijuana patients and the ability to rapidly expand its growing capacity.

4. Aphria
One of Canopy Growth’s largest competitors in the Canadian medical marijuana producing and retail business is Aphria (NASDAQOTH: APHQF). Aphria has the distinction of being the most prominently profitable marijuana stock, with the company reporting five consecutive quarterly profits.

Unlike Canopy Growth, Aphria is doing things organically. It’s been funding expansions of its existing grow capacity, and is currently working on its most aggressive growth initiative to date, Phase IV.

5. Aurora Cannabis
And how can we forget Aurora Cannabis (NASDAQOTH: ACBFF), yet another of Canada’s medical cannabis producers and retailers. Aurora Cannabis has lagged its peers in recent profits due to its expansion-based spending.

Like Aphria, Aurora Cannabis is all about organic development. Aurora Cannabis has touted its Aurora Sky project, which will increase its cultivating capacity nearly ninefold, as the most technologically advanced and automated cannabis-grow facility in the world, when completed.

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Marijuana-Stocks-Cannabis-nug-18

Canopy Growth (WEED.TO) (TWMJF) has rallied 25% off its June lows and the shares have been trending higher ahead of the company’s fourth quarter and full-year earnings report.

Before the market opens on June 27th, Canopy will release its fourth quarter financial and operating results and we expect to see the company report strong numbers for the period.

Last week, Canopy Growth provided shareholders with a corporate update and the market responded very favorably to this update.

A Global Expansion Story

From Germany to Australia, this Canadian licensed medical marijuana producer continues to increase market share across the globe and we expect this to trend continue as management continues to execute.

Canopy announced that it is renaming its German subsidiary to Spektrum Cannabis Germany GmbH and confirmed ongoing sales of Tweed-branded products in Germany with sales growth accelerating rapidly on a month-over-month basis. Spektrum Cannabis Germany GmbH has now distributed cannabis products to over 480 pharmacies across Germany, up from 200 pharmacies in April 2017.

The company also established a new subsidiary for its entrance into Chile’s market, Spectrum Chile SpA. Canopy will enter this market with the creation of a new product, Spectrum Chile. This product will complement Canopy’s expansion into South America and Canopy Growth plans to position itself as a leader in the Chilean market.

Through a strategic partnership with a domestic Chilean medical cannabis company, Spectrum Chile will work to ensure Chilean patients have access to high-quality cannabis products.

A Company of Firsts

Canopy Growth has been a leader in the global cannabis market and the company has benefited from having a first mover advantage.

In April 2014, Canopy Growth became the first cannabis company in North America to be publicly traded. The company followed was also the first to diversify its platform to include both greenhouse and indoor growing, to acquire a major competitor and to be listed on the Toronto Stock Exchange, and the only cannabis company to be a member of a major global stock market index (S&P/TSX Composite index).

Canopy was the first Canadian producer to be approved to export dried cannabis to Germany through its Tweed subsidiary, and its wholly-owned German subsidiary continues to offer several varieties for sale through German pharmacies.

Canopy recorded another milestone this month by becoming the first company to start selling softgel capsules in Canada. This product offers consumers a new way to consume cannabis and they are being produced at Canopy’s Smiths Falls campus. Canopy will offer this product through the Tweed Main Street store, which serves over 58,000 customers.

A Favorable Outlook

We are favorable on Canopy Growth Corp due to the following reasons: 1) It is the largest and best capitalized medical cannabis producer, 2) The company continues to execute on its initiatives and work toward creating value for its shareholders, 3) Management has a proven track record of success, 4) The company continues to report earnings that show improving fundamentals, and 5) Its balance sheet is flush with cash and leaves the company flexible and able to expand through both organic and inorganic growth initiatives.

 

Authored By: Jason Spatafora

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marijuana-stocks-cannabis-Australia

In February, the cannabis industry recorded a major milestone when Australia became the first continent to legalize medical marijuana.

The legislation amended the Narcotic Drugs Act and allows for the cultivation of marijuana for medical and scientific purposes. Following the passing of this legislation, Australian Health Minister Sussan Ley made the following statement:

“This is an historic day for Australia and the many advocates who have fought long and hard to challenge the stigma around medicinal cannabis products so genuine patients are no longer treated as criminals. This is the missing piece in a patient’s treatment journey and will now see seamless access to locally-produced medicinal cannabis products from farm to pharmacy.”

iCAN Australia is Born

Australia represents a new opportunity for cannabis companies and yesterday, iCAN: Israel-Cannabis entered the market by forming a joint venture with LeafCann Research and Advisory. The partnership, iCAN: Australia will collaborate on a range of initiatives including medical cannabis research, innovation, acceleration, and education.

iCAN: Israel-Cannabis CEO Saul Kaye stated, “We are thrilled to partner with LeafCann to form iCAN: Australia. Our collaboration will bring world-class cannabis products to the Australian market as well as accelerate our collaborative research and development of new products for a range of indications.”

LeafCann’s practitioner education program will be incorporated into iCAN’s product offerings and distributed by iCAN. iCAN: Australia will take a significant interest in CannaTech Australia, a medical cannabis summit modeled after CannaTech’s events in Israel.

Canadian Titans Have the Early Mover Advantage

Although iCAN is not the first company to target the Australian cannabis market, it has taken a different approach when compared to the other companies that have entered the market.

Earlier this year, Cann Group announced that Aurora Cannabis (ACB.V) (ACBFF), a licensed medical cannabis producer in Canada, acquired 19.9% of the company ahead of its initial public offering.

Canopy Growth (WEED.TO) (TWMJF), the largest licensed medical cannabis producer in the world also entered the Australian medical cannabis industry through a partnership with AussCann (ACNNF). Canopy Growth will help AussCann increase market share and capitalize on the Australian cannabis market.

Global Expansion Continues

Marijuana legalization may not be a top priority for the United States right now, but change is occurring all over the world. The global marijuana industry has gathered support from many high-ranking officials over the last two years which has increased overall support for the reform of restrictive laws.

Progress toward this goal is hampered by political realities, such that cannabis is still classified as a Schedule I substance. It is time for change and for the authorities to recognize its medical benefits and to remove some of the restrictions that are not supported by scientific research.

Not only is this a medical necessity, but it just makes good business sense.

Authored By: Jason Spatafora

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marijuana-stocks-cannabis-Australia

2017 has been a year to remember and we are not even at the mid-point yet…

From the largest country in the European Union to entire continents, 2017 has been highlighted by the opening of new, major cannabis markets. This theme has been consistent over the last few years, and it is just getting started.

Australia is Becoming a Hotspot for Cannabis Businesses

In February, the cannabis industry recorded a major milestone after the Australian Parliament passed a measure which made it the first continent to legalize medical marijuana.

Cann Group Limited (ASX: CAN) was the first Australian company to be licensed by the Office of Drug Control for commercial medical cannabis cultivation and production. The company has facilities in Australia’s northern and southern region and is currently expanding both of its facilities to satisfy expected future demand.

Cann Group’s expansion project is fully funded and the company is focused on completing the buildout of its facilities, securing licenses for expansion purposes, and executing on its business plan.

In late May, Cann Group received the necessary permits to commence cultivation and will plant their initial crop in the next few days. The company expects to harvest its initial crop in early August if everything goes to plan.

Canadian Producer Set Sights on Australia

In March, Cann Group announced that Aurora Cannabis (ACB.V) (ACBFF), a licensed medical cannabis producer in Canada, acquired 19.9% of the business and became the cornerstone investor ahead of its initial public offering (IPO).

Another titan of the industry, Canopy Growth (WEED.TO) (TWMJF) has also entered the Australian medical cannabis industry through a partnership with AussCann (ACNNF). Canopy Growth is the largest licensed medical cannabis producer in Canada and the company will help AussCann increase market share and capitalize on the Australian cannabis market.

Canopy is not only one of AussCann’s largest shareholders but they have also granted them royalty-free access to their intellectual property as it relates to cultivation, supply, and manufacturing of medicinal cannabis.

The Marijuana Train Has Left the Station

Marijuana legalization may not be a top priority for the United States right now, but change is occurring all over the world. The global marijuana industry has gathered support from many high-ranking officials over the last two years which has increased overall support for the reform of restrictive laws.

Progress toward this goal is hampered by political realities, such that cannabis is still classified as a Schedule I substance. It is time for change and for the authorities to recognize its medical benefits and to remove some of the restrictions that are not supported by scientific research.

Not only is this a medical necessity, but it just makes good business sense.

Authored By Micheal Berger

marijuana stocks

A Revolutionary Cannabis Investment?

Some of the greatest investment minds in the world say, “You invest in management.” And since the birth of MarijuanaStocks.com, few management personnel have shined brighter than Cannabis Wheaton Income Corp. CEO Chuck Rifici. Mr. Rifici has accomplished with Cannabis Wheaton something that no other cannabis industry CEO has. The business model he has implemented is something that we feel every marijuana investor MUST know about. Cannabis Wheaton (KWFLF)(CBW.V) provides a very unique opportunity for marijuana investors by greatly reducing risk while still maintaining tremendous upside potential.

But before we explain the Cannabis Wheaton business model and why we feel EVERY investor should know about it, let’s first take a look at Chuck Rifici. Because as we said earlier, “you invest in management.” And there may not be a more recognizable managerial figure who has done more for the marijuana industry than Mr. Rifici.

Invest in Management

Chuck Rifici is responsible for co-founding and taking public the largest full-scale producer of government-sanctioned marijuana as its CEO in April 2014; a company by the name of Tweed Inc. whose name later changed to Canopy Growth Corp. (TWMJF)(WEED.TO). To this day, Canopy Growth remains the largest public cannabis company with a staggering market cap of approximately $1Billion. In 2016, WEED hit $17.86 approximately 550% higher than the IPO price. It is widely agreed to be the most successful marijuana company to go public and is seen as the benchmark and leader of the industry.

Take a look at how WEED stock has performed over the last 2 years:

marijuana stocks

When considering an investment in any company, it’s important to look at the management team. Who is leading the ship? Is this their first rodeo? Or have they already proven successful in bringing a company to market that has built shareholder value? Well, Chuck Rifici’s track record with co-founding Tweed speaks for itself and gives Cannabis Wheaton shareholders confidence that they have a marijuana industry trailblazer leading their ship.

But Rifici’s resume is filled with much more than just Tweed. In 2011, Rifici was appointed CFO of the Liberal Party of Canada by interim party leader Bob Rae. In 2014, Rifici was also named to the Top Forty under 40 by Ottawa Business Journal, named Alumnus of the Year by the University of Ottawa Faculty of Engineering, and received the Exceptional New Business Award by the Ottawa Chamber of Commerce.

Rifici also sat on the Board of marijuana starlets Supreme Pharmaceuticals (SPRWF) (SL.CN), Aurora Cannabis (ACBFF) (ACB.V), and CannaRoyalty (CNNRF) (CRZ.V). These board positions helped Rifici keep his ear to the ground, expand his network, and gain insight to the marijuana industry in both Canada and the U.S. He actually just resigned from his Supreme Pharma and Aurora Cannabis Board seats because of a slight conflict of interest but mostly to focus all of his time and energy towards building Cannabis Wheaton into a revolutionary cannabis company.

Cannabis Wheaton’s Streaming Model—Revolutionizing Cannabis Investment

Cannabis Wheaton is the first company to bring a streaming business model to the marijuana industry. This unique model can greatly reduce risk for investors while maintaining tremendous upside potential from a booming industry. Streaming business models are normally found in the mining industry and refer to when a company strikes a deal with a miner to purchase all or part of its future metal production in exchange for upfront cash. Perhaps the most notable example is silver giant Silver Wheaton (NYSE: SLW). This works well because mining is a very cash intensive business and requires a lot of upfront capital. And the cannabis industry is about to undergo a massive expansion that will be an serious capital burden on current marijuana producers.

Rifici has said that the marijuana industry must increase total production by 10 times the current rate in order to keep pace with the increased demand for marijuana once the drug is legalized for recreational use. Producers are barely keeping up with cannabis demand from just medical marijuana users, never mind when legal recreational use goes into effect.

Currently, there is only 1.4 million square feet of licensed medical marijuana production facilities in Canada. According to Rifici, 14 million square feet is needed to satisfy the upcoming demand. Such a massive expansion is a major financial burden and carries great risk for companies trying to expand so much so quickly. And that is where the opportunity lies for Cannabis Wheaton.

“We’re going to see tremendous growth in the industry…There have been a lot of announced expansions that fill maybe a third of that gap. But there’s still 6 or 7 million square feet that needs to be built out,” said the Rifici.

Under the streaming model, Cannabis Wheaton will provide marijuana producers with the necessary capital to expand their operations in exchange for a minority equity stake in the company and a portion of their future production at an agreed upon discounted price. The company will also provide their partners with guidance and expertise on facility construction, cultivation, and the licensing process. Rifici has brought to Wheaton several of the early key members of Tweed including the top cannabis legal team in Canada that has helped half a dozen Licensed Producers (LPs) obtain their licenses.

Cannabis Wheaton has already signed 16 streaming deals with 14 partners across 6 different provinces of Canada. Their partners’ credentials include:

  • 2 sales licenses.
  • 3 cultivation licenses.
  • 4 affirmation letters.
  • 5 advanced pre-affirmation stage applicants.

Through these agreements, Cannabis Wheaton already has access to 1.3 million square feet of cultivation by 2019, 30,000 registered medical marijuana patients, and nearly 40 medical cannabis clinics.

One agreement we feel worth mentioning specifically is the company’s deal with Broken Coast Cannabis Ltd., a British Columbia based medical cannabis producer that has established itself as a top provider of high grade cannabis products. Broken Coast’s clean tech production methods and systems deliver consistent premium cannabis. The company was also recently awarded one of the few 18-month Access to Cannabis for Medical Purposes Regulation (ACMPR) licenses, which is a testament to its compliance record.

Broken Coast and its entities will utilize the experience and capital of Cannabis Wheaton to accelerate expansion and scale production in a short period of time. Under the terms of the agreement between the companies, Broken Coast will source a proposed site to complement their current site. The parties expect the new location to accommodate at least 100,000 square foot state-of-the-art cannabis cultivation facility.

Broken Coast will operate the new facility in accordance with its industry best practices and the two companies will share the proceeds with Cannabis Wheaton receiving 49% of the product output.

5 Reasons to Consider Cannabis Wheaton

  1. Licensed Producer Diversification- Because the company is working with such a wide range of cannabis cultivation companies and receiving both an equity stake in those companies and a percentage of the end product, shareholder risk is spread out amongst several companies rather than just one.
  2. Exposure to Tremendous Upside- Usually, reducing risk results in reduced potential reward, too. But not in this case. Even with the reduced risk, shareholders are exposed to the explosive industry expansion that Rifici explained as being a 10x expansion. Current cannabis revenue numbers in Canada will pale in comparison to what we see once legal recreational use goes in effect. Cannabis Wheaton will hold an equity stake in many producers as well as owning portions of the end product at a discounted price.
  3. Geographic Diversification- Cannabis Wheaton has signed agreements with partners across 6 different provinces in Canada. This brings exposure to several different markets and acts almost as a loophole for the company to take advantage of a few question marks the industry has regarding distribution.
  4. Proven Business Model- The streaming business model has already been proven successful for some of the largest metal miners in the world. Silver Wheaton, a streaming company with a market cap of approximately $10Billion, went to this model because they generally have a bullish outlook on the price of silver. So, it makes sense for them to fund a miner’s drilling operations and expansion to purchase the future metal output at a steep discount. Similarly, Rifici and Cannabis Wheaton have a bullish outlook on the production rate and revenue numbers for marijuana in Canada expecting a 10x expansion of the industry. So, it makes sense to help fund the expansion in return for equity ownership and a portion of the end product.
  5. Successful Management- The team behind Cannabis Wheaton has already taken the largest producer of government-sanctioned marijuana public. And it was and remains the most successful IPO in the cannabis space and true leader of the industry. 

Conclusion

Ever since Rifici co-founded Tweed and brought the cannabis juggernaut public in 2014, investors wondered what his next project would be. Rifici said he is proud of what he built with Tweed but was ready to put the past behind him.

“I’m essentially moving on to what I think are far better opportunities in the space,” said the Cannabis Wheaton CEO.

It’s hard to imagine what opportunities could be more successful than a $1Billion market cap, top marijuana producing, cannabis leader that gained 550% from its IPO. But if anyone knows an opportunity in the marijuana space when they see one it’s Chuck Rifici.

Licensed Producers are already having trouble keeping up with demand from about only 130,000 registered medical marijuana patients. When legal recreational use goes into effect, demand is going to skyrocket. The current 1.4 million square feet of cultivation facility space simply isn’t going to cut it. Not even close. The entire industry is racing to undergo a massive expansion that will see cultivation space increase by about 10 times. That type of expansion is extremely costly and carries great risk for individual producers.

However, with their streaming business model, Cannabis Wheaton is de-risking the expansion while still giving investors exposure to the booming industry growth. With 16 agreements already inked with 14 different partners across 6 different provinces, Cannabis Wheaton could very well be revolutionizing the way investors capitalize on the cannabis industry.

 


Disclaimer: Pursuant to an agreement between MAPH and Cannabis Wheaton (KWFLF) we were hired for 30 Days to publicly disseminate information about (KWFLF) including on the Website and other media including Facebook and Twitter. We are being paid $150,000 (CASH) for and were paid “0” shares of restricted common shares of Cannabis Wheaton. We may buy or sell additional shares of (KWFLF) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

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    marijuana-stocks-canadian-canada

    2016 was a year to remember for Canadian licensed medical cannabis producers and investors had every reason to be excited early during 2017.

    However, the last two months have been painful for Canadian cannabis investors. But we believe this weakness has created great opportunities for investors. Although we do think the sub-sector has almost found a bottom, investors need to be selective and focus on companies that have a differentiated strategy and competitive advantage over its peers.

    Canada Continues to Expand its International Presence

    One of the ways Canadian licensed medical cannabis producers have been able to differentiate themselves from their peers is through he countries they are levered to.

    Canopy Growth Corp (WEED.TO) (TWMJF) Cronos Group (MJN.V) (PRMCF), and Aurora Cannabis (ACB.V) (ACBFF) have accomplished this very well and are levered to markets like Germany and Australia.

    The emerging legal cannabis industry has created ample opportunities from legal cannabis businesses across the globe and we believe that companies with a global presence are best positioned over the long-term.

    A Streaming Rally

    Since Monday, shares of Cannabis Wheaton (CBW.V) (KWFLF) are up more than 12% and this recent IPO has seemed to have found a bottom. We are favorable on the company’s differentiated strategy and believe it has secured some high-quality partners.

    Earlier this month, Cannabis Wheaton released the list of companies it has streaming deals with and we were very impressed with the quality of the roster of its clients, especially Broken Coast Cannabis Ltd. and Green Relief Inc.

    Cannabis Wheaton’s streaming partners include 14 outstanding companies located in six provinces across Canada. Of these companies, 2 have sales licenses (Broken Coast and Green Relief), 2 have cultivation licenses, 4 have affirmation letters and 6 are advanced pre-affirmation stage applicants.

    We are favorable on the recent improvement in trading volume as well as the associated rally and investors should keep Cannabis Wheaton on their radar.

    A Royal Deal in Oregon

    Earlier this week, CannaRoyalty Corp. (CRZ.CN: CSE) (CNNRF) announced that its investee, Rich Extracts, received a processing license from the Oregon Liquor Control Commission (OLCC) to begin producing and wholesaling cannabis products to licensed distributors and dispensaries throughout Oregon.

    CannaRoyalty previously advanced $2.3 million in debt to the company for the right to convert $2.15 million of the debt into a 30% royalty stream on Rich Extracts’ gross sales in perpetuity. The company is a fully integrated cannabis operator and has been focused on building and supporting a diversified portfolio of cannabis assets.

    Rich Extracts operates out of a 30,000-sq. ft. facility and produces cannabis extracts through a proprietary process. The company expected the OLCC to introduce new standards and started a new project to meet such standards. At full capacity, the facility can produce 80,000 grams of concentrates and distillates every month. Based on industry information, current wholesale prices for such products in Oregon range from $15-20 per gram.

    We are favorable on this development and continue to monitor CannaRoyalty as the shares have been under significant pressure (down 35% from April highs). The company’s United States symbol, CNNRF broke out of oversold territory last week and we are monitoring this unique Canadian cannabis firm.

    Author: Michael Berger


    Pursuant to an agreement between MAPH and Cannabis Wheaton, we were hired for a period of 30 days to publicly disseminate information about (KWFLF) including on the Website and other media including Facebook and Twitter. We are being paid $150,000 (CASH). We may buy or sell additional shares of (KWFLF) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

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