New York, New York (NetworkNewsWire) – Canadian medicinal
marijuana sales could exceed $8 billion by 2024, as forecast by
Canaccord Genuity Group’s November 2016 market research report.
ABcann Global Corp. (TSX.V: ABCN) (OTCQB: ABCCF)
(ABcann
Profile) is considered one of
Canada’s strongest growers, boasting a customer retention rate of
94.7 percent, no history of product recalls, and
computer-controlled production that have strengthened the company’s
reputation for its pharmaceutical-grade cannabis. While ABcann
already occupies a strong position, its leadership team continues
to draw on pharmaceutical and capital markets experience to help
achieve broader corporate goals. These advantages separate ABcann
from other producers such as Canopy Growth Corp. (TSX:
WEED) (OTC: TWMJF) and Aurora Cannabis Inc. (TSX:
ACB) (OTCQX: ACBFF); led to a milestone financing
agreement with investment firm Cannabis Wheaton Income
Corp. (TSX.V: CBW) (OTC: KWFLF); and solidify the
company’s position among high valuation companies like medical
cannabis supply provider Aphria (TSX: APH) (OTC:
APHQF).
Experienced leadership is part of what has helped
ABcann Global
Corp. (TSX.V: ABCN) (OTCQB: ABCCF) earn its stripes in
the marijuana industry. Under the helm of CEO Aaron Keay, ABcann
became a publicly traded company in April 2017. Keay also exercised
several warrants, adding $13 million to the company coffers of $48
million in working capital.
Keay’s previous expertise in capital markets, including raising
capital and overseeing finance and merger and acquisition
transactions, gave him the ability to bring the company to the
forefront of the Canadian medicinal marijuana industry and into the
sights of Cannabis Wheaton (TSX.V: CBW) (OTC:
KWFLF). On August 2, ABcann announced (http://nnw.fm/aVAL7) the close of an initial $15
million investment ($2.25 per share) by Cannabis
Wheaton as part of a larger phased investment to fund an
additional 50,000 square feet at ABcann’s second production
facility at its 65-acre Kimmett property in Napanee, Ontario. Plans
for this facility, in addition to the company’s current
construction plans for a 100,000-square-foot purpose-built facility
at the Kimmett property, position ABcann to expand at an
unprecedented rate in the Canadian cannabis industry.
Notably, Cannabis Wheaton’s valuation of ABcann comes at a 160%
premium over the company’s current share price of $0.68. The
cannabis streaming company based its valuation of ABcann on more
than strong leadership, however. As stated earlier, ABcann’s
history is void of any product recalls, unlike some major Canadian
growers, and is reputed for its pesticide-free growing
capabilities. As the company explores international opportunities,
reputation for pharmaceutical-grade products is vital.
In a press release announcing the release of one of Canada's
highest legal CBD:THC (cannabidol:tetrahydrocannabinol) ratio
products available on the market, via its ABcann Medicinals, Inc.
subsidiary, the company noted the importance of pesticide-free,
high-quality production.
"The development of these products is in line with ABcann's
corporate strategy as a premium product provider of organic,
pesticide free cannabis," Ken Clement, executive chairman of
ABcann, stated (http://nnw.fm/MVa1v). "As the Company continues to
scale production capacity, our product line will expand as we
strive to increase shareholder value through capturing a larger
market share of the current global medical markets."
Keay further emphasized the point in regard to the company’s
global expansion strategies.
"ABcann will continue to advance our core businesses and
subsidiaries as production capacity continues to increase through
our aggressive construction and expansion plans," he said. "The
construction timelines at both of our locations position ABcann to
become a strong competitor in the existing global medical market
and to take advantage of the emerging adult consumer market that is
expected to emerge in 2018.”
Even Keay’s recent decision to step down from his post as CEO
(http://nnw.fm/cniW8) demonstrates considerable
leadership. Keay will continue to contribute his experience in the
capital markets to the company, working with incoming CEO Barry
Fishman to move the company forward. Fishman will assume this role
starting October 1, 2017. A business leader for nearly 20 years,
Fishman served a nearly three-year role as CEO of Merus Labs (TSX:
MSL), an international specialty pharmaceutical company – gaining
invaluable expertise aligned with ABcann’s commitment to marketing
the highest quality, pharmaceutical-grade cannabis. Under Fishman’s
tenure, Merus saw a compound annual growth rate of over 50 percent
and was purchased for about $342 million in July 2017. Fishman also
served as CEO of Teva Canada and Taro Canada, vice president of
Marketing at Ely Lilly, and is on the board of Aurora Cannabis.
In addition to prime leadership, another key aspect of ABcann’s
valuation is the fact that it owns the land housing its licensed
production facilities. Notably, these facilities have the
infrastructure to support scalable production in a
computer-controlled environment, with precise control over air and
water quality, temperature and humidity, and plant nutrition to
ensure high product quality. The company operates a
14,500-square-foot Vanluven facility in Napanee, Ontario, which has
an annual production capacity of 1,000 kg. The 71,000-square-foot
Kimmett facility is currently under construction and is expected to
add 20,000 kg of production capacity annually. Future expansion is
planned on 65 acres of company-owned land, with an estimated 1.2
million square feet of development space and power, water, and
waste infrastructure already in place.
When understanding the tremendous opportunities in Canada’s
marijuana market, it’s worth noting the growth story of
Canopy Growth (TSX: WEED) (OTC: TWMJF), one of the
biggest growers in the world, with more than half a million square
feet of production space. The company saw its share prices
skyrocket from C$2.20 at its IPO in May 2014 to a high of C$17.86
in November 2016, setting it up as Canada’s first billion-dollar
marijuana stock. Canopy Growth recently moved to further solidify
its expansion in New Brunswick with the acquisition of ACMPR
applicant Spot Therapeutics, which, when licensed and fully
expanded, will provide around 100,000 square feet of production
space. The company also expanded its Smiths Falls and Bowmanville
South footprints last quarter by 33% and 200%, respectively. Canopy
is currently trading on the TSX exchange at C$10.27 per share, as
of September 15, with a market cap of C$1.7 billion.
Aurora Cannabis (TSX: ACB) (OTCQX: ACBFF), for
which incoming ABcann CEO Fishman is a board member and independent
director, has also taken a strong position in the Canadian market.
Shares of the licensed Canadian grower climbed by more than 900
percent following its IPO, currently trading at C$2.64 with a
valuation of $969 million. As the only licensed producer of medical
marijuana in Alberta, Aurora operates a 55,200-square-foot
cultivation and harvesting facility in the Rocky Mountains, and it
is in the process of adding an additional 840,000 square feet
across two other sites in Canada. Aurora owns a 19.9% stake in the
first Australian company licensed to cultivate and conduct research
on medical cannabis, and it owns a leading Germany-based wholesale
importer, exporter and distributor of medical cannabis.
Currently valued at C$884 million and trading at C$6.73,
Aphria (TSX: APH) (OTC: APHQF) was the first
publicly licensed producer to go cash flow positive from
operations. The company produces capsules, vaporizers, and
orally-administered cannabis oil droppers. In addition to
addressing the demand for such products, a focus on safety,
consistency, and the quality of patient care has contributed to the
company’s rise. Aphria also has a strategy to expand into the
growing U.S. medical cannabis market. Aphria currently trades at
C$6.38 with a valuation of $885 million.
Canada’s top growers are flourishing thanks to the country’s
legalization of medical marijuana, and with recreational
legalization set for July 2018, these producers are gearing up to
take advantage of a forecast rise in recreational demand. Supported
by $43 million in working capital, a strong leadership team of
extensive pharmaceutical and capital markets expertise, and an
enviable reputation for pharmaceutical-grade cannabis and
cultivation technologies, ABcann has the potential to achieve a
market valuation more closely aligned with its peers. With a market
cap of C$83 million and trading at $0.84, ABcann may offer
investors an attractively priced entry point into the burgeoning
global marijuana industry.
For more information on ABcann Global please
visit: ABcann Global
(TSX.V: ABCN) (OTCQB: ABCCF)
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