[Updated: 8/07/17] In partnership with Stockpools, Lift Cannabis Expo, and Abattis Bioceuticals Corp. (CSE:ATT), the Canadian Securities Exchange is pleased to announce Canada’s first Cannabis Investment Challenge: a fantasy online stock trading competition focusing solely on the Canadian cannabis sector.
This exciting competition enables participants to create a fantasy portfolio based on select companies listed on the CSE that are actively involved in the cannabis industry.
Contestants will compete for weekly cash prizes based on the best performing portfolios each week and will also be able to play for the grand prize trip to Las Vegas for a marquis marijuana convention. There are up to $4,000 in cash prizes up for grabs as well as the grand prize trip, valued at $3,000.
To learn more about the Cannabis Investment Challenge, and to register for the upcoming week (Week 7), click here.
Weekly Featured Company Insights
As part of the Cannabis Investment Challenge, each of the seven featured companies were asked for their perspectives on the rapidly evolving cannabis industry in Canada.
Companies who have shared their insights include (in no particular order):
- Abattis Bioceuticals Corp.,
- Friday Night Inc.,
- Maricann Group Inc.,
- Canada House Wellness Group Inc.,
- Global Cannabis Applications Corp.,
- Marapharm Ventures Inc., and
- Quadron Cannatech Corp.
Follow along as we highlight one of the seven investment challenge’s featured companies each week and gain insight into how they see the opportunities and challenges ahead for the cannabis market.
Disclaimer: The opinions expressed below are those of the author themselves and do not necessarily reflect or represent the views of the Canadian Securities Exchange.
Week 7: Brad Moore CEO: Global Cannabis Applications Corp. (CSE: APP)
Around the world, more and more governments are either moving toward legalizing medical marijuana or decriminalizing it altogether. In fact, the global cannabis market is expected to grow at a CAGR of 37.8 percent between 2016 and 2020.
With legislation pending in more than 40 nations, analysts are forecasting legal medical cannabis will become a multi-billion- dollar -per -year industry. GCAC is poised to profit from the growing global trend in medical cannabis regulation and can begin generating revenue faster than the licensed producers trying to break into the space. Global Cannabis Applications Corporation’s (GCAC) technology solutions under the Citizen Green brand are “dedicated to the digital world of all things medicinal cannabis.”
Many potential medical cannabis users in newly regulated markets such as Germany, Australia and Canada may have limited to no experience with cannabis.
Citizen Green mobile apps, CannaLife and Prescriptti , provide a bridge to knowledge and the support of an online community for medical cannabis users. These two solutions create a massive user-driven data solution, a unique opportunity for cannabis R&D.
GCAC’s ‘Pain To Strain’ model combines advanced algorithms, artificial intelligence (AI) and real time anecdotal user feedback to provide a highly valued user data set for licensed producers, practitioners, pharmacists and regulatory agencies. This information is instrumental for creating safe, effective products and programs for medical cannabis users.
As such unlike the plethora of overvalued licensed producers, the revenue model for a cannabis centric technology company is not tied down by a lengthy licensing process nor the heavy costs associated with acquiring land and building facilities. As the global consumer base of medical cannabis products grows so does the value of Global Cannabis Applications Corporation.
Week 6: Larry Bortles – Chairman of the Board, Canada House Wellness Group Inc. (CSE:CHV)
The landscape of the cannabis industry is rapidly changing and expanding, as this trend continues we see an industry consisting of a wide array of businesses that have different purposes and objectives.
Canada House places value on its overall objective that we believe should be applied across the industry, which is to not just focus on market-driven or monetary objectives but also a social responsibility regarding the reinstatement of cannabis as an alternative option to health ailments. Cannabis hasn’t been provided the opportunity to play the role it should in treatment that it did historically before experiencing disparagement and Canada House is helping in its reinstatement of being an acceptable form of treatment. We see this as a common trend within the industry. If we do this successfully we are on track to be successful in the industry ourselves and vanquish the incorrect reputation cannabis has received.
The subsidiaries of Canada House are formed for the best opportunity at success with our integrated services that have been established through a client-centered approach. Together, Marijuana for Trauma, Knalysis Technologies and Abba Medix provide a vertically-integrated platform to help our clients achieve health outcomes that were not previously attainable, an alternative from pharmaceutical cocktails. A client-centered multi-faceted approach based around the role that cannabis plays is a combination that we think the cannabis industry should embody as changes and expansion occur.
Week 5: Linda Sampson, CEO and Director, Marapharm Ventures Inc. (CSE:MDM)
Marapharm Ventures Inc. is a publicly traded company, primarily investing in the medical and recreational cannabis space, with operations based in British Columbia, Canada.
Through its wholly owned operating subsidiary Marapharm Inc., the Company has applied to Health Canada to become a licensed producer under the Access to Cannabis for Medical Purposes Regulations (ACMPR). Marapharm’s initial facility, a proposed 22,000 sq ft state-of-the-art cultivation facility, will be constructed on an 11 acre leased site in Kelowna, British Columbia.
The Company’s growth strategy will be to build facilities or acquire licenses in the United States, determined by identifying opportunities in the market. The company has currently focused its attention on opportunities in Nevada, Washington and California. Land has been purchased and construction has begun, In the Apex Business Park in the City of North Las Vegas, Nevada. The company’s intention is to build cultivation and processing facilities in this location, which will utilize two medical and recreational cultivation licenses and one medical processing license. In Washington State, the Company has an opportunity to lease a facility to an I-502, tier 3 license holder. The licensee holds a production license for 30,000 sq ft and a processing license with unlimited potential. In California, we have commenced the purchase of two industrial properties and own a delivery service for medical cannabis.
Marapharm has also purchased and is developing an all-natural hemp oil based cosmetic line called, Maragold, which will be ready for market within a few months. The products created by Maragold will be marketed online directly to end-users and will be sold individually or by subscription.
Week 4: Benjamin Ward, CEO of Maricann Group Inc (CSE:MARI)
As the CEO of Maricann Group Inc., I have been setting the stage for our entrance into the European medical marijuana market for many years. In 2014, we identified Germany as a potential gateway into Europe and secured a facility in Dresden.
Early this year, when German parliamentarians voted unanimously to legalize cannabis based medicines and opened up an estimated 800,000 patient market, we obtained $42,500,000 in non-dilutive, debt-free financing to begin the Dresden facility expansion.
Currently, there are only a handful of Canadian producers who export marijuana, but with the country running out of legal marijuana to supply both medical and – soon – recreational users, exporting is becoming increasingly hazardous to the domestic market.
It has also became apparent that eventually countries will seek to trap the industry’s economic opportunities while alleviating downside risk for regulators in product safety and close their borders to imports. When this happens, only companies with boots on the ground will have a place in the market.
For these reasons, we have chosen not to export our products from Canada and instead produce in Europe to exclusively supply European patients.
Maricann is entering Europe equipped with a German operational team, including the former head of production and manufacturing for Bayer. The company has also carefully selected an Advisory Board of well-respected German-based medical professionals in research, healthcare and business.
We are slated to produce 40,000 kilograms of cannabis per year inside the new 150,000 square foot GMP-compliant, clean-room cultivation facility. With the potential for 820,000 square feet, we can increase production and scale capabilities in Europe’s largest market for medical cannabis.
It is our aggressive global expansion efforts paired with our market leading technological extraction and product formulation differentiation that has positioned Maricann to be leaders in the European and Canadian medical market.
Week 3: Rosy Mondin, CEO of Quadron Cannatech Corp. (CSE:QCC)
Anil Mall from Stockpools asks: Where do you see things going with legalization and how does this impact Quadron?
In Canada, there already exists a diverse and well-established private sector for both medical and illicit recreational (i.e. ‘non-medical’ or ‘adult-use’) cannabis; in fact, Canada is considered by many as a world leader in cannabis production.
Through my work as Executive Director of the Cannabis Trade Alliance of Canada (CTAC), we’ve been advocating government to implement a licensing structure which grants more licenses to increase the quantity and variety of the available supply chain. We believe a legalized cannabis licensing structure should be open to industry participants of various sizes, from craft to larger forms of industry, and regulations should implement a more responsive licensing system providing greater flexibility for businesses. Therefore, we would like to see a move towards a system of separate licensing categories like we’ve seen in Washington, Oregon, Colorado, Nevada and California. Having various types of licensing ‘classes’ falls into line with the consultations and recommendations we made to the Task Force on Legalization last year.
Extracts: Extracts are the fastest growing category of cannabis products. Canada’s medical cannabis industry has been focused on dried cannabis product, however demand in extracts/oils/concentrate is growing exponentially, and oil sales in Canada are already significantly outpacing dried “bud”. According to Health Canada data, as of March 2017, oil sales comprised ~50% of total sales by Licensed Producers, and does not consider sales of oils and extracted products sold through dispensaries and the black market.
Cannabis oils, in addition to allowing for a greater variety of product, is safer than smoking, is more stable than dried material, and can be produced using standardized preparations (particularly important for consistency in dosing).
In addition to this Health Canada Licensed Producer data, if we look at the sales data coming from Washington state, concentrate sales skyrocketed to $140 million last year. Additionally, if we look at the data that came out of the Mackie Research Focus Report earlier this year, assuming full legalization, by 2018 the Canadian demand for oils to increase by 198,000% by 2020). There’s no shortage of data and statistics. Impressive figures are also coming from growth of ancillary markets, and consulting services: In the USA, investment in the ancillary market (i.e., businesses that do not touch the cannabis plant) grew 161% in 2016 compared to 2015.
Catering to these trends is exactly where Quadron’s offerings are targeted.
The Science of Cannabis: As cannabis use expands and more products enter the marketplace, third-party testing labs will be needed to ensure purity, potency, and consistency of products before they reach the consumer. It’s a crucial step in the supply chain process, a critical consideration for public health and underlies the whole framework for legalization which is predicated on “safe product”. Anticipating these needs, our subsidiary Soma Labs Scientific, aims to establish scalable labs, using research, development and science to establish industry standards for the creation of standardized extracts, using our state-of-the-art extraction and formulation equipment, products and services.
Extraction and Formulation Equipment: There is so much demand for extracted product that there are waiting lists to purchase commercial-scale machinery. Quadron is currently the only company trading on the CSE in the cannabis ancillary equipment manufacturing and supply space, giving us a great first mover advantage.
For more information on Quadron Cannatech Corp. please email [email protected]
Week 2: Robert Abenante, President & CEO, Abbatis Bioceuticals Corp. (CSE:ATT)
Who is Abattis?
As the cannabis industry gears up for legalization in Canada, Abattis Bioceuticals Corp. is establishing itself as the leader in providing services to licensed producers, medical and legal recreational users and large scale farmers of marijuana and hemp biomass. “We see this industry commoditizing at an incredible rate and our intent is to be the picks and shovels cornerstone to this high growth sector.” stated Robert Abenante, President & CEO of Abattis Bioceuticals. “Our mandate is to be fully integrated along the supply chain through our subsidiaries. This means we should be able to cultivate, test, extract, formulate and push value added products into the market in the quickest and most cost effective way” added Mr. Abenante.
Through its Health Canada Licensed Dealer, Northern Vine Labs the Company provides federally mandated testing of legal cannabis and derivatives as well as formulations for products using legal cannabis, derivatives and industrial hemp/cannabidiol.
The Company also has an exclusive distribution agreement with Suzhou Raybot Material Tech Corp. (“Raybot”) which allows it to sell and service proprietary extraction machines in North America and Europe. This ability gives Abattis a major competitive edge within the industry as no large scale cost effective extraction methods currently exist. Raybot’s machines provide industrial scale and cost-effective cannabinoid extraction with the potential to significantly disrupt the rapidly growing cannabis derivatives market by providing several competitive cost advantages in the extraction of CBD, THC and other derivatives from marijuana and industrial hemp.
Abattis also has a sales and marketing subsidiary, Vergence Naturals Ltd., focused on the sales and marketing of nutraceutical products. In addition to selling third party natural health products, Vergence will be the main distribution arm for the products formulated by Northern Vine with or without CBD. Vergence has established sales channels in Asia, Europe, Canada and United States.
Northern Vine, an Abattis subsidiary, is one of the few Licensed Dealers in Canada, of which only seven are cannabis specific and of which only two are publicly traded. In March 2017, High Times announced that the next billion dollar industry would be cannabis testing. With random product testing introduced by Heath Canada in April 2017 and mandatory pesticide testing for Licensed Producers mandated by Health Canada in May 2017, the Company has the best advantage of its peers to be a frontrunner for servicing the cannabis industry.
Combined with the ability to formulate products and to extract biomass, Abattis is well positioned to be a leader in the burgeoning medical and soon to be legal recreational cannabis market.
To learn more about Abattis Bioceuticals Corp., please visit www.abattis.com or www.northernvinelabs.com or feel free to contact Brook Bellian, Investor Relations at [email protected] or call 604-336-0881.
FORWARD LOOKING INFORMATION
This welcome letter contains forward-looking statements. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe” and similar expressions are intended to identify forward-looking statements. Forward- looking statements in this press release include statements regarding the selling and servicing of proprietary extraction machines in North America and Europe; the potential of the technology to significantly disrupt the rapidly growing cannabis derivatives market; the competitive cost advantages; the potential size of the cannabis testing market; the Company’s advantage to its peers to service and to be a leader in the medical and legal cannabis industry. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties, including that the Company will not be able to open its new lab or execute its proposed business plan in the time required or at all due to regulatory, financial or other issues. Additional risk factors are included in the Company’s Management’s Discussion and Analysis, available under the Company’s profile on www.sedar.com. The forward-looking statements are made as at the date hereof and the Company disclaims any intent or obligation to publicly update any forward-looking statements, where as a result of new information, future events or results, or otherwise, except as required by applicable securities laws.
Week 1 – Brayden Sutton, CEO of Friday Night Inc. (CSE:TGIF)
The cannabis industry in Canada, broadly speaking, is very fatigued and taking a much-needed breather, as reflected in the share prices across the board. Some would say that they ran too hard and too much after Trudeau’s promises.
Right now, as a result, Canadian LP’s are priced with legalization “baked-in.” This is important to point out, in case Mr. Trudeau does face hurdles, potentially causing a delay in the passing of the legislation next year.
As prospective new patients wait for ‘legalization’ they will notice the disparity between the market caps of collective Canadian cultivators vs. lethargic patients and sales numbers. The fatigue caused by this disparity forces investors to take a closer look at the ancillary components of this sector, such as extraction and processing technologies, branding, software and IT infrastructure, security – you name it. Something else to keep in mind is that the United States could hold even greater potential than Canada in this sector.
29 American states now have some form of a medical cannabis program, with many of them also including an ‘adult-use’ or recreational program. Places like Colorado have provided us now with almost 5 years of data since they went legal, and the numbers are staggering.
The data is very compelling for other states to come on board.
So as the wave goes through the US, it’s all eyes on the next, high-per-capita-use-demographic states, such as Florida, Arizona, and in particular Nevada, with recreational sales beginning there on July 1st of this year. With an estimated 48 million visitors a year to the “strip” in Las Vegas, it’s a highly anticipated market.
Another up and coming market is Germany, as they too roll out a federal medical program, much like the one we have here in Canada: the ACMPR. So, it’s tulip-mania over there, much like Canada experienced in 2013 and 2016 leading to the prices we have here today.
There is tons of opportunity all around, but timing is everything. Never bank on something until it’s done, and make sure you know the current usage landscape to ensure it matches the enterprise values.