Canada's Cannabis Legalization is Helping Expand the Market

Monday, June 25, 2018 Drug News
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NEW YORK, June 25, 2018 /PRNewswire/ --

According to a research report

provided by Marijuana Business Daily, cannabis retail sales continue to grow year-over-year, as new markets emerge, and more states legalize medical and recreational cannabis. Sales in 2018 are expected to surge by approximately 50% when compared to
last year, meaning sales value is on track to reach USD 8 Billion - USD 10 Billion by the end of this year. The research also estimates that by 2022, annual retail cannabis sales in the United States could top USD 20 Billion, a 200% increase from 2017. As for the economic impact that the new growing industry is set to have, the data predicts an estimated USD 28 Billion - USD 34 Billion economic impact in 2018. GreenTec Holdings Ltd. (TSX-V: GTEC), Aurora Cannabis Inc. (OTCQX: ACBFF), Auxly Cannabis Group Inc. (OTCQB: CBWTF), Supreme Cannabis Company Inc. (OTC: SPRWF), Namaste Technologies Inc. (OTCQB: NXTTF).

Legalization movements are currently succeeding in changing policies beyond the U.S. region. Canada has passed a nationwide legalization of recreational cannabis usage on June 19th, 2018, the second nation to do so after Uruguay. As for the U.S., the process of cannabis legalization for the majority of the West Coast states has already begun, while almost all states have medical use legalized to an extent. And while California is the largest market, Canada is projected to show strong sales as well; Deloitte's report projects the Canadian market will be worth at least USD 5 Billion in sales in 2018.

GreenTec Holdings Ltd. (TSX-V: GTEC) is listed on the TSX Venture Exchange under the ticker ("GTEC"). Just earlier today, the company announced breaking news that it, "is pleased to provide an update on the operations of its wholly owned subsidiaries. On June 19, 2018 the Canadian Senate passed a bill that will legalize recreational cannabis nationally. Canada is only the second country in the world - and the first G7 nation - to legalize recreational cannabis. The following day, Prime Minister Justin Trudeau announced that Canadians will be able to legally consume cannabis recreationally commencing October 17, 2018. These timelines dovetail very well with the development of GreenTec's cultivation and lab facilities:

  • Alberta Craft Cannabis Inc. ("ACC") is a Licensed Producer located in Edmonton, Alberta. ACC operates a 14,000 square foot craft cannabis cultivation facility with estimated annual output of 1.3 million grams. ACC is currently cultivating two different strains of cannabis, to facilitate securing its Sales License from Health Canada's Office of Medical Cannabis at the earliest opportunity.    
  • GreenTec Bio-Pharmaceuticals Inc. ("GreenTec") is a late stage ACMPR applicant based in Kelowna, British Columbia. GreenTec is currently building a 20,000 square foot craft cannabis cultivation facility with projected annual output of 2.2 million grams. GreenTec has completed design, engineering, permitting and pre-construction work. This facility is expected to be complete by September 2018.    
  • Grey Bruce Farms Inc. ("Grey Bruce") is a late stage ACMPR applicant based in Kincardine, Ontario. Grey Bruce is currently building a 15,000 square foot craft cannabis cultivation facility with projected annual output of 1.6 million grams. Grey Bruce has made substantial progress in completing a major retrofit of its existing industrial building. The company anticipates that this process will be completed by August 2018.
  • Spectre Labs Inc. ("Spectre") is a cannabis oil extraction facility based in Kelowna, British Columbia. Spectre has acquired land and building to develop the facility, completed initial design work and submitted an application to the Office of Controlled Substances for a Dealer's License. The site will be developed in a phased approach and will serve as a Good Manufacturing Practices ("GMP") grade facility with extraction, formulation, compounding and export capabilities to support GTEC's Licensed Producers and the global medical market. GTEC also intends to utilize Spectre to manufacture edible products that are expected to be incorporated into Health Canada's regulatory framework in 2019. Upon Health Canada approval of phase one, the facility will be able to produce up to 24,500 grams of cannabis oil per day (equivalent to more than 8,500 kilograms per annum), with capabilities to increase production capacity in future phase development.  
  • Tumbleweed Farms Corp. ("Tumbleweed") is a late stage ACMPR applicant based in Chase, British Columbia. Tumbleweed is currently building a 10,000 square foot craft cannabis cultivation facility with projected annual output of 1.0 million grams. The exterior of this building is almost complete, and substantial progress has been made with respect to interior elements of the facility. Tumbleweed anticipates completing this facility in August 2018. Tumbleweed has also signed a contract with the Pacific Agricultural Certification Society ("PACS") with a view to becoming one of the first certified organic cannabis companies in Canada.
  • Zenalytic Laboratories Ltd. ("Zen Labs") is a full-service chemical and microbiological diagnostics laboratory that is in the process of obtaining a Section 56 Class Exemption Dealer's License under the Narcotic Control Regulations. Zen Labs has received notification from Health Canada's Office of Controlled Substances (Controlled Drugs Section), that its security compliance inspection is scheduled for June 26, 2018. Upon satisfying the security requirements of the Office of Controlled Substances, Zen Labs expects a follow up inspection on implementation of its instruments, SOP's, record keeping and analytical processes before being granted its final License. Once Zen Labs receives its Dealers License, GTEC will be able to conduct in-house analytical testing without the risk of delays associated with outsourcing.

Norton Singhavon, Chairman & CEO of GTEC Holdings, provided the following comments: "We are very excited about recent developments facilitating legalization of recreational cannabis on October 17th. We anticipate that we will have significant cultivation capacity in place by this date. Accordingly, we are confident that we are well positioned to become one of the leading vertically integrated craft cannabis companies in Canada"."

Aurora Cannabis Inc. (OTCQX: ACBFF) is a licensed producer of medical cannabis pursuant to Health Canada's Access to Cannabis for Medical Purposes Regulations. Aurora Cannabis Inc. and Anandia Laboratories Inc. recently announced that they have signed a binding term sheet whereby Aurora intends to acquire all of the issued and outstanding common shares of privately-held Anandia in an all share transaction valued at approximately USD 115 Million on a fully diluted basis. Anandia's intellectual property includes the exclusive rights to a number of key genes in the cannabinoid pathway, as well as patents pending for genetic markers. The strength of Anandia's expert staff, proprietary assets and know-how will provide Aurora with a very significant advantage in developing new cannabis cultivars. For instance, genome-based variety development and technological fortification can tailor metabolite (cannabinoid and terpene) profiles, improve disease resistance, enhance crop yield and optimize flowering time, and can be employed to develop specialized cultivars for oil production. Combining with Aurora gives Anandia access to significant new market opportunities in Canada and internationally through Aurora's global footprint, according to the Company. "The Transaction will greatly boost our competitive advantage in developing marketable intellectual property and high-margin products and help address diversified needs on a global basis," concluded Neil Belot, Chief Global Business Development Officer for Aurora.

Auxly Cannabis Group Inc. (OTCQB: CBWTF) is a collective of entrepreneurs with a passion for the cannabis industry past, present and future. The Company recently announced that further to its previously announced transaction on February 16, 2018, the Company has entered into a definitive joint venture agreement with Peter Quiring, one of Canada's largest greenhouse builders and operators, to develop, construct and operate a fully-automated, state-of-the-art, purpose-built greenhouse for cannabis cultivation in Leamington, Ontario. Hugo Alves, President of Auxly, stated, "The combination of being the largest builder of greenhouses in Canada and the experience of operating 175 acres of greenhouses in Canada and the United States, truly places Peter in a league of his own. As a cornerstone partnership in the Auxly platform, JVco is a unique opportunity to achieve large-scale, low cost production of cannabis with one of North America's premier greenhouse operators. Upon completion, this upstream project will be a significant source of product into our midstream value-add and downstream distribution channels. We look forward to building a state-of-the art facility with Peter and his team and a long and successful business partnership."

Supreme Cannabis Company Inc. (OTC: SPRWF) is a Canadian publicly traded company committed to becoming a leading cultivator and distributor of sun grown cannabis through its wholly-owned subsidiary 7ACRES. 7ACRES is a federally licensed producer of medical cannabis pursuant to the ACMPR operating inside a 342,000 sq. ft. Hybrid Facility. The Company recently announced that it has entered into a definitive agreement pursuant to which Supreme Cannabis will complete a CAD 10,000,000 strategic equity investment in Medigrow. Upon completion of the Investment, Supreme Cannabis will hold an approximate 10% ownership interest in Medigrow. Supreme Cannabis expects strong demand to exceed supply for medical cannabis oil globally and believes Lesotho is well suited to produce quality cannabis oil, while Medigrow possesses the expertise to meet the highest quality standards. Concurrent with the completion of the Investment, Supreme Cannabis and Medigrow have agreed to enter into a long-term global distribution partnership for medical cannabis oil.  

Namaste Technologies Inc. (OTCQB: NXTTF) is a global leader in the sale of medical cannabis consumption devices. The Company recently announced that, further to its January 18th, 2018 letter of intent, that the Company has signed a subscription agreement to acquire 10% of the issued share capital of Israeli licensed producer of medical cannabis, Cannbit Ltd for NIS 2,500,000 or approximately CAD 908,000, which includes a combination of both cash and shares. Subsequently, Cannbit has also signed a binding agreement to complete a merger with a company listed on the Tel Aviv stock exchange, whereby Cannbit will retain 85% ownership of the combined public entity. The Company believes that its investment will be immediately accretive in nature based on the valuation metrics of the transaction which consequently valued Cannbit significantly higher than what Namaste acquired its 10% equity stake for. In anticipation of closing this transaction, Namaste has established a supply arrangement with Cannbit to export cannabis to the Canadian market and will also engage with Cannbit to expand the Company's Israeli-based vaporizer sales platform.

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