Business

Access to cannabis is constantly evolving and, in a matter of months, Canada is poised to become the largest legal market of cannabis worldwide. 

Under 
the Access to Cannabis for Medical Purposes Regulations(ACMPR), medical cannabis is currently legal nationwide in Canada. Demand in the medical space is forecast to increase ten-fold by 2024. 

Taking it a step further, the Canadian government is planning to legalize cannabis for adult-use this summerAs such, the adult-use market is forecast to grow to $6 billion by 2021 and a total market demand of more than 600,000 kg of product. 

As the next booming sector, entrepreneurs, companies, and enthusiasts alike are preparing for new opportunities in the cannabis industry.

There is a projected shortfall of supply based on current capacity and market demand – posing an upside for companies looking to capitalize. Here are a few ways companies are preparing to capitalize on the legal adult-use market

Diversify Product Offerings 

With recreational legalization, there will be increased consumer demand for new and innovative products, including cannabis oils and edibles. 

While
 dried flower has dominated the market, cannabis oil is becoming extremely popular. It is preferred by medical professionals who can more easily prescribe doses to patients, and by individuals who do not want to smoke their medicine.

We can expect to see cannabis oils continue to gain market share in both recreational and medical spaces, and more companies 
applying for licenses to produce and sell cannabis oil

We also anticipate that customers will gravitate towards cannabis-infused edibles and other extracts. While the Canadian government still has not authorized the sale of these products,edibles could be permitted one year after the recreational marketopens, making ample room for new product development. 

Licensed producers will need to build out new infrastructures as well as research and development capabilities to develop infused products. 

AlternativelyLicensed Producers may establish partnerships to avoid upfront costs and tap into the expertise of other organizations that already know how to produce these goods.

Develop Strategic Partnerships 

To meet increased demand, the cannabis industry will likely see a wave of consolidation, even as it expands.

Some companies will team up via mergers or acquisitions to 
increase the diversity of their products in preparation for the recreational market.

Things are moving at a rapid pace, and the companies that will flourish are the ones that can industrialize and produce on a large scaleCompanies will be seeking partners and investors, giving many Canadian and foreign entities opportunity to engage with experienced licensed producers.

We’ve already seen some major partnerships and investments over the past year.

Constellation Brands (a Fortune 500 producer of wines, beers, and spirits) recently invested $245 million into Canopy Growth Corporation, signaling a major validation in the cannabis space. We can expect to see other companies from the alcohol, pharmaceutical, and consumer product markets enter the cannabis industry. 

Emerald Health also acquired Licensed Dealer Northern Vine to enhance product development ahead of adult-use legalization in Canada.

This may be the beginning of intense M&A activity in the cannabis industry, as companies find ways to quickly and efficiently build out their 
offerings and production capabilities.  

Increase 
Cannabis Production 

According to the Brightfield Group, recreational cannabis is predicted to bring in more than 500,000 users in its first year, which will lead to a sudden and steepincrease in demand. As such, Licensed Producers are expanding their operations to have additional product available by summer 2018.

Health Canada is also reviewing and approving new Licensed Producer applications to help address the potential shortage of supply. 


Emerald Health is one of many companies gearing up to meet future market demand. The company recently partnered with Village Farms, an industry-leading greenhouse grower, to leverage their existinggreenhouse assets and large-scale growing expertise. It is currently retrofitting one of the world’s largest indoor growing facilities at 1.1 million sq. ft

Looking long-term, there is an option to add another 3.7 million sq. ft. of growing space, for a total of 4.8 million square feet (300,000 kg of product). 

The future of cannabis is bright. With the upcoming legalization of adult-use cannabis in Canada, we will continue to see the space evolve here and across the world.  It’s exciting to bring this industry out of the darkness and into the light.
SASKATOON – CanniMed Therapeutics Inc. says its truce with rival medical marijuana company Aurora Cannabis Inc. will continue past the original Monday deadline.

The Saskatoon-based company has been fending off a hostile takeover by Aurora, which wants CanniMed to abandon its friendly takeover of Newstrike Resources Ltd.

CanniMed and Aurora's stand-still agreement provides them with an opportunity to hold talks ahead of a rescheduled CanniMed shareholder vote on Thursday.

Under the truce, neither company will solicit any proxies from CanniMed shareholders, solicit an alternative transaction or enter talks about an alternative deal.

In addition, Aurora will not acquire direct or indirect control of any additional CanniMed shares and CanniMed won't make changes to its Nov. 24 offer for Newstrike.

In a press release Monday, Newstrike announced that it consents to the post-poning of CanniMed's shareholder meeting.

The Tragically Hip, a major shareholder in Newstrike, has thrown its support behind CanniMed's takeover bid.


LEAMINGTON - Aphria Inc. has entered into a binding letter agreement to acquire 100% of the issued and outstanding share capital of Broken Coast Cannabis Inc., a premium cannabis producer located in British Columbia.

As part of the transaction, Aphria approved the immediate commencement of Broken Coast's Phase IV expansion.

The 60,000 sq. ft. expansion is expected to cost under $20 million and will increase the facility's annual capacity from 4,500 kgs per year to 10,500 kgs per year. 

This acquisition brings Aphria's forecast annual production to 230,000 kg and turns Aphria into a cross-Canada distribution platform, with access to over 40,000 medical patients.

The expansion is anticipated to be completed by late summer 2018, with first product sale occurring in early 2019.



READ FULL RELEASE HERE

TORONTO – Producer of medicinal cannabis, Hydropothecary Corporation announced today that it has entered into a revised agreement with Canaccord Genuity Corp., Eight Capital, and a syndicate of underwriters for 32,500,000 units of the Company at a price of $4.00 per Unit for aggregate gross proceeds of $130,000,000. 
EDMONTON and ANCASTER - Aurora Cannabis Inc. and The Green Organic Dutchman Holdings Ltd. today announced that the companies have completed a definitive agreement covering a strategic investment in TGOD by Aurora, as well as a supply contract.
SMITHS FALLS, ON and SAINT LUCIEN, QC - Canopy Growth’s Vert Cannabis in Saint Lucien, Québec, has obtained a production license under the Access to Cannabis for Medical Purposes Regulations. 

Vert Cannabis is a 7000 square foot craft cannabis production facility located in the small town of Saint Lucien, Québec.

"We're pleased to have obtained the licence and look forward to starting cannabis production in Québec," said Adam Greenblatt, Québec Brand Manager at Canopy Growth.

Recently, Canopy Growth also established a partnership with Les Serres Bertrand to form Vert Mirabel – a large scale production greenhouse facility to be converted into a cannabis facility.

Vert Cannabis represents Canopy's seventh Canadian production licence under the ACMPR to date. Vert will begin production in the first quarter of 2018 following the live transfer of starter plants from the Tweed facility in Smiths Falls, Ontario.  

Greenblatt said that the legalization of cannabis in Canada presents a tremendous opportunity for the province.

 "It is an exciting privilege to operate at the intersection of revolutionary policy reform and a nascent commercial sector with vast potential, and as such, we are dedicated to establishing a vibrant, competitive, and socially responsible cannabis industry here in Québec."



Kelowna, B.C. – Two recreational cannabis lifestyle brands, DOJA and Tokyo Smoke based out of British Colombia, announced that they will be merging companies to form Hiku Brands, with strategic investment from Aphria Inc.
MIRABEL, Que. – Canopy Growth Corp. has signed a joint-venture deal with Les Serres Stephane Bertrand Inc., a large-scale tomato greenhouse operator in Quebec.
McMaster University in Hamilton and St. Joseph Healthcare Hamilton have teamed up to launch a new multidisciplinary research centre dedicated to cannabis research.
Over the past five years, Canadian businesses have seen the threat of hacktivism, cyber extortion and the incidences of data breaches grow exponentially. No industry is immune to these threats, not even license producers of cannabis across Canada.
April 13, 2017 feels like yesterday. That of course was the day that the Government of Canada introduced Bill C-45, the Cannabis Act, into the House of Commons for its first reading.
There is no doubt that the Federal Government of Canada’s decision to legalize recreational use of cannabis has opened up huge opportunities for licensed producers across the country.
July 6, 2017, Ottawa – The Canadian AIDS Society has announced a first of its kind research program funded by Canopy Growth Corporation.
April 21, 2017, Flamborough, Ont. – Green Relief Inc. has become the 31st licensed producer in Canada to receive its license from Health Canada to sell medical marijuana, initiating an unprecedented era in the industry.
April 13, 2017, Smiths Falls, Ont. – One of Canada’s largest marijuana companies is preparing for big news out of Ottawa later today.
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