As Canada prepares for the lifting of cannabis prohibition with legalization in July of 2018, there’s a push to increase the number of licensed producers.
Leading companies in this space include Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF), Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), MedReleaf Corp. (OTC: MEDFF), and MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF).
Already, Health Canada has stepped up its game in granting Access to Cannabis for Medical Purposes Regulations (ACMPR) licences and expects to up the amount even more through the end of the year by streamlining the process.
This provides a window on the state of the industry and shows why markets are also embracing the coming rise.
The increased pace of growth has broadened the entry point that once was limited to major producers such as Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF). That stock rose as high as $13 per share in February of 2017, but has since settled back to the $10 level.
In the process, a number of nimble new competitors have entered the game and made serious inroads toward mass production.
Early cannabis contributors following their success model include Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), and MedReleaf Corp. (OTC: MEDFF), who are both leading the Licenced Producer category, as well as relative newcomer MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF). MYM is gaining attention as it rolls out plans for one of the world’s largest cannabis greenhouses that will dwarf all other operators.
MOMENTUM CARRIES
The potential $22.6 billion cannabis industry is still in its early stages, and for investors there seems to be no limit on the potential value this sector can offer. And the momentum is driving everything.
Beyond basic medicinal or recreational consumption, cannabis offers several other high value derivatives that provide major potential for the industry as a whole.
The most widely used is the Cannabidiol compound of the plant, referred to as CBD.
CBD-only products deliver much of the medicinal benefits of the cannabis plant, only without the high that’s typically attributed to cannabis’ other yield, THC. That’s why you’ll notice CBD used in all types of therapeutic products from topical ointments to beverages and a wide variety of food products.
Legal in all 50 US states and Canada, CBD was responsible for $170 million in the US 2016, and is projected to hit $1 billion by 2020. The American marijuana industry as a whole is expected to hit $50 billion by 2026.
In order to reach a $50 billion market from its current state is going to require industry wide expansion with a focus first and foremost on growing capabilities. These need to expand, and at a pretty rapid pace.
MASS CULTIVATION IS KEY
To accommodate expansion, the cannabis industry is wrapped in a race to build the biggest, best, most sophisticated greenhouses in the world – and they’re succeeding.
Canopy’s Tweed facility in Niagara-on-the-Lake, Ontario, which covers 350,000 square feet of greenhouse space is currently the clear leader and the world’s largest marijuana greenhouse.
But that won’t last long.
Competitors such as at Aurora Cannabis began work on their Leduc facility near the Edmonton Airport, which is to be more than double the size, at a whopping 800,000 square feet of growing space.
That facility has a projected growing capacity of 100,000 kgs of cannabis annually.
No to be outdone, AmeriCann Inc. (OTC: ACAN) is planning to surpass Aurora’s new space, and has announced plans to build the largest cannabis greenhouse facility in the USA at roughly 1 million square feet to be located in Massachusetts.
But, here’s where MYM leapfrogs all of their plans: MYM Nutraceuticals and its majority-owned subsidiary CannCanada signed an exclusive deal with the Quebec municipality of Weedon to build a 1.5 million-square-foot cannabis production facility consisting of fifteen 100,000-square-foot-greenhouses.
As envisioned, this massive marijuana operation will be one of the largest grow operations on the planet, with the potential to produce over 150,000 kgs of cannabis per year—or roughly $750,000,000 annually at current market value.
That’s three quarters of a billion dollars in annual production from a single cannabis operation.
MYM’S SMART PLAY
MYM Nutraceuticals has taken a brilliant tact in locating its new facilities.
The cannabis producer has worked in tandem with the municipality in Weedon to create jobs and spark an entire industry in the process. Accordingly, the plans will see Weedon itself acquiring the 329 acres of land for MYM to build on.
The first phase of the Weedon plan, which accounts for 300,000 square feet of greenhouse space, has both architectural and security plans completed. The additional four phases are still in development.
While the Weedon facility is at the forefront, MYM has advanced on another Quebec-based project, with the recent approval and permitting to begin construction on the company’s smaller facility in Laval.
The Laval facility is expected to have the capacity of producing 1,000 kgs. of cannabis annually and is scheduled for completion by the end of Q4 2017.
MYM is also diversified across much of the cannabis sector, from growth, to formulation and production, to branding and distribution.
Its operations are cover wide ranging assets, from CannaCanada in Weedon, to its Licensed Producer subsidiary Sublime in Montreal, along with products and branded entities Joshua Tree, MyHemp Skin Therapy, and HempMed.
At this point it has the assets advance rapidly up the ranks of the Cannabis heavy weights. Unlike those companies with market caps from $800 million to $1.5 billion, MYM Nutraceuticals remains undervalued at just a $27 million market cap.
Although one of the newcomers, MYM has already made an impression by more than doubling its value since it began trading in March of 2017.
POTENTIAL COMPARABLES
Aurora Cannabis (TSXV: ACB) (OTC: ACBFF)
Through its wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., Aurora Cannabis is a major LP, operating a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta. Aurora made waves when it announced the construction of its 800,000 square foot “Aurora Sky” facility second 800,000 square foot production facility at the Edmonton International Airport. Aurora’s also involved in Quebec, with its third 40,000 square foot production facility set to be completed in Pointe-Claire, Quebec, on Montreal's West Island. Aurora also holds a minority stake in leading extraction technology company Radient Technologies Inc., based in Edmonton, and a minority stake in Australian company Cann Group Limited, which was the first in Australia to conduct research on and cultivate medical cannabis. Aurora also owns German wholesale importer, exporter, and EU medical cannabis distributor Pedanios.
MedReleaf Corp. (OTC: MEDFF)
MedReleaf sets The Medical Grade Standard for cannabis in Canada and around the world. The first and only ISO 9001 certified cannabis producer in North America, MedReleaf is a R&D-driven company dedicated to patient care, scientific innovation, research and advancing the understanding of the therapeutic benefits of cannabis. Sourced from around the world and perfected in one of two state of the art facilities in Ontario, MedReleaf delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis.
Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF)
The granddaddy of the corporate cannabis sector, Canopy Growth is the world’s largest diversified cannabis company. Canopy boasts a wide offering of distinct brands and curated cannabis varieties in dried, oil and capsule forms. Most widely recognized is Canopy’s subsidiary Tweed which is the world’s most recognized marijuana production brand, as well as an industry educator. Accompanying Tweed in Canopy’s portfolio is medical-grade cannabis producers Bedrocan Canada. In total, Canopy Growth’s numerous state-of-the-art production facilities total over half a million square feet of GMP-certified indoor and greenhouse production capacity.
For a more in-depth look into MYM you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/11/12/the_marijuana_boom_is_here_to_stay-2-2-2-2/
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