Canadian Licensed Producers Prepare for Recreational Cannabis Legalization, Expect Significant Growth in Demand

NetworkNewsWire Editorial Coverage: A momentous cultural and economic change is soon coming to Canada, as the Canadian Government has committed to legalizing recreational marijuana on July 1, 2018. Already busy with demand for medicinal marijuana – which has been legal in Canada since 2001 – licensed cultivators are ramping up their production capabilities in anticipation of a staggering surge in demand. Investors are also taking notice, in October driving average gains of 7.6% among Canadian cannabis producers (http://nnw.fm/KJ29n). The Canadian Government is also making preparations for the impending legalization, emphasizing cannabis education and awareness for the nation’s youth (http://nnw.fm/b4U9O). This focus on health and safety adds weight to the proprietary, organic and pesticide-free growing systems of ABcann Global Corp. (OTCQB: ABCCF) (TSX.V: ABCN) (ABCCF Profile), which, thanks to a hefty investment by Cannabis Wheaton Income Corp. (OTCQB: CBWTF) (TSX.V: CBW), has the capital needed to increase its supply. Other licensed producers gearing up to meet demand Maricann Group, Inc. (OTCQB: MRRCF) (MARI: CC), Emblem Corp. (OTC: EMMBF) (EMC: CC) and MedReleaf Corp. (OTC: MEDFF) (LEAF: CC).

The impending legalization of marijuana for recreational use in Canada could offer licensed producers a chance to record tremendous growth in the coming months. According to a 2016 report by Deloitte, the legal Canadian marijuana market could soon be worth $18 billion annually. As for volume, Deloitte forecast annual demand for the plant at about 1.32 million pounds per year.

With a highly regulated system and strict licensing requirements, the Canadian market is a safe haven for investors looking to invest in quality products and companies in a market brimming with potential. However, an overly strict licensing process restricts supply, as seen in the U.S. State of Nevada (http://nnw.fm/He1F0).

As a result, the Canadian government has relaxed its licensing approval process, and established growers such as ABcann Global Corp. (OTCQB: ABCCF) (TSX.V: ABCN) have a head start. Focused on producing premium quality organic standardized medicinal cannabis, ABcann has developed a proprietary computerized system to control marijuana growing, which enables it to replicate the cultivation environment of any geographical location in the world. This level of control guarantees a consistent product of superior quality that is repeatable from batch to batch, something that is demanded by both physicians and patients. The company’s innovative system uses controlled lighting, organic fertilizers and soil media to deliver natural, safe products at high yields. Through strict environmental control of temperature, humidity and water, ABcann is able to eliminate the need for pesticides, which can taint supply.

Cultivation requires capital, and with $40 million in the bank, ABcann is especially well-positioned to increase its production capabilities. A hefty portion of this cash is from a $30 million with Cannabis Wheaton (OTCQB: CBWTF) (TSX.V: CBW) to fund the construction of additional ABcann production facilities.

ABcann currently operates a licensed 14,500-square-foot Vanluven facility located in Napanee, Ontario, and the company is gearing up to break ground on its new 150,000-square-foot Kimmet facility in Napanee. Even with the new facility, ABcann has plenty of wiggle room, as it also owns 65 acres of land for future development with full infrastructure already in place, which will be able to accommodate another growing facility estimated at 1.2 million square feet.

Experienced leadership is part of what has helped ABcann earn its stripes in the marijuana industry. At the helm of ABcann’s expansion strategies is a strong management team led by Barry Fishman, former CEO of Teva Canada, a producer of generics and specialty pharmaceuticals generating $1 billion in revenue. Fishman has a proven track record as CEO of three international companies where he exhibited his exceptional abilities in deal-making, mergers and acquisitions, and raising capital.

Fishman’s experience in international markets bodes well for ABcann’s pursuit of achieving greater market share in Canada, along with growth opportunities in Germany and other parts of Western Europe, as well as in South America.

Though ABcann’s current market valuation is USD$80 million (CAD$100.6+ million), the company’s capabilities place it among the ranks of larger cultivators like Maricann Group (OTCQB: MRRCF) (MARI: CC) in Langton, Ontario. Having established itself as a respected supplier of medical cannabis, the company is focusing on expanding all areas of operation, from cultivation to extraction, analytics and production, with a view to developing global markets. Health Canada recently granted to Maricann a new license to increase its production capacity by over 480 percent to 6,250,000 grams. The company also recently entered a collaboration agreement with a national provider of services to pharmacies to create a special medical cannabis program for physicians and patients. Maricann’s market cap is just more than USD$110 million.

In Paris, Ontario, licensed producer Emblem Corp. (OTC: EMMBF) (EMC: CC) operates a facility that consists of six controlled indoor growing rooms, with a seventh scheduled to be added by spring 2018. As part of its expansion, Emblem is completing the construction of a 30,000-square-foot facility housing a GMP extraction laboratory as well as a value-added product and pharmaceutical production facility. In October 2017, the company entered an exclusive agreement with Canntab Therapeutics to collaborate on the preclinical formulation, development, manufacturing and commercialization of a cannabinoid-based oral sustained release formulation for the treatment of chronic pain, nausea and spasticity in patients with multiple sclerosis. Emblem’s market valuation is USD$1 million (CAD$116+ million).

MedReleaf Corp. (OTC: MEDFF) (LEAF: CC) is a licensed producer, in addition to being the only ISO 9001 certified medical cannabis producer in North America. This is a quality management standard set by the International Standards Organization (ISO) and requires certified companies to adhere to strict quality control and assurance procedures. With a market cap of over USD$1.2 billion (CAD $1.5+ billion), MedReleaf has state-of-the-art marijuana growing facilities in Ontario and uses proprietary plant breeding programs and advanced cultivation methodologies. The company also conducts research and development into the therapeutic benefits of cannabis and manufactures a range of premium medical cannabis products.

By forming strategic partnerships to grow their facilities, these licensed producers are well positioned to meet increased demand for Canada’s supply-hungry marijuana market, and with more than 65 acres of growth capacity, a healthy cash balance to fund upcoming construction efforts, steady sales growth, industry-leading yield rates, and an established operations team in place, ABcann is well-positioned as market leader.

For more information on ABcann Global Corp., visit ABcann Global Corp. (OTCQB: ABCCF) (TSX.V: ABCN).

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