- Sunniva confirms analyst expectations with COR from Health Canada
- Company and announcement featured in Seeking Alpha article
- Over one million square feet of cannabis cultivation facilities under construction
- Grow facilities in California and Canada target 60 million adults
Biopharmaceutical company Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF) now seems set for a place in the sun. The North American provider of cannabis products and services announced on May 29, 2018, that its wholly owned subsidiary, Sunniva Medical Inc. (“SMI”), had received a Confirmation of Readiness (COR) notification from Health Canada. The good news has not gone unnoticed, with one analyst remarking, “Sunniva Delivers As Promised,” as well as reminding investors that for Sunniva, “The Story Gets Better and Better.” Sunniva is positioned in the world’s two largest cannabis markets. The company currently has separate growing facilities under construction in the U.S., at its campus in Cathedral City, California, and in Canada at Okanagan Falls, British Columbia.
The COR received by Sunniva Medical Inc. (SMI) was issued under new rules instituted in May 2017 by Health Canada under the Access to Cannabis for Medical Purposes Regulations (ACMPR), which removed the necessity for a physical inspection of grow facilities prior to the issuance of a cultivation license. The new regime allows an applicant for a producer license to prove ‘their facility’s readiness in the form of data, photos, video, attestations from experts, etc.’, which, after review, can lead to the issue of a cultivation license. Designed to streamline the application process, the amended regulations do not remove the requirement for physical inspections entirely, but appear to place them on a scheduled timetable rather than before approval.
Although not quite a license to produce, a COR is a major step on the way to acquiring one. Sunniva certainly seems to have ‘everything lined up properly’, as a recent endorsement on Seeking Alpha testifies. Under the banner “Sunniva Delivers As Promised,” the review claims that the company might have issued its most important press release to date (http://nnw.fm/Mm21o).
The release, announcing receipt of the COR, also mentions other important company developments, such as the previously reported take or pay supply agreement with Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) (http://nnw.fm/y4BbJ). Under the terms of the agreement, initially for two years, Canopy will purchase approximately 45 percent of Sunniva’s annual production capacity, representing 45,000 kilos of dried cannabis annually, starting in Q1 2019 or shortly thereafter. Canopy will also distribute Sunniva branded products.
Another item in the press release was the announcement that SMI had received development approval from the Regional District of Okanagan-Similkameen for construction of the Sunniva Canada Campus. SMI broke ground in early May 2018 on the 126-acre site at Okanagan Falls, British Columbia. Sunniva also revealed its plans to finance construction activities. It is currently arranging construction financing to finalize its planned state-of-the-art 740,000 square foot facility in Canada.
Work in California continues; under Phase 1 of the project there, a 325,000 square foot greenhouse with the capacity to produce 60,000 kilos of dry cannabis per year is expected to commence operations later this year. About half of that production will be used for conversion to oils and extracts. Phase 2 will increase greenhouse space by 165,000 square feet and increase annual output capacity by 40,000 kilos.
With construction at its campuses in California and Canada now well underway, Sunniva looks set to become a major supplier in this combined market of approximately 60 million adults, which is currently estimated at $9-10 billion.
For more information, visit the company’s website at www.sunniva.com
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