Although the Canadian cannabis market has seen incredible growth over the last year, we believe there is a lot of room to run as the legislation to create a recreational cannabis program is scheduled to be introduced this spring.

When looking at growth catalysts for companies levered to the Canadian medical cannabis market, none is more significant than the legalization of recreational cannabis at the federal level. At the United Nations meeting earlier this year, Health Minister Jane Philpott said Canada’s Liberal Party government will introduce a law in the spring to legalize recreational cannabis.

Some Producers to Benefit More than Others

Although recreational cannabis will benefit all licensed producers that are approved to distribute cannabis, some will benefit more than others.

Many licensed producers have been expanding and constructing new facilities to prepare for the increased demand. Investors should focus on companies that are well capitalized, well positioned and well managed.

Private opportunities like The Green Organic Dutchman have generated great interest from investors as the company possesses one of the largest licensed land lots in Canada as well as one of the most attractive valuations when compared to its peers.

This is different than the approach taken by Aphria (APHQF), a licensed producer that recently acquired 200 acres in a separate location in Canada. This acquisition though, is not as attractive as that of The Green Organic Dutchman since Aphria’s property will require its own license from Health Canada.

Companies are Positioning Themselves for Growth

According to Health Canada, if a licensed medical cannabis producer acquires a property that is adjacent to its licensed facility, it does not need to receive a new license.

If the property in not attached or adjacent to the cannabis producer’s licensed property, it will need to apply for and receive a new license from Health Canada.

Although legal recreational cannabis represents a huge market in Canada, these companies must scale the size of their operations to fully capitalize on this opportunity.

MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 |
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