Mega-Growers Tapping into the True Global Market Potential of Cannabis

April 15, 2019 - Baystreet.ca


Although all eyes in the cannabis sector are on Canada, the reality is that the remaining global market has far higher potential that Canada’s legalization ever will. However, Canadian cannabis companies are preparing their move for global conquest.

The size of the global legal marijuana market is expected to rise to $63.5 billion by 2024, according to a study put out by Ameri Research.

Which is why multiple cannabis companies are aggressively targeting markets outside of North America to grow and/or sell their products, including Aphria Inc. (TSX: APHA) (OTC: APHQF), Aurora Cannabis Inc. (TSX: ACB) (OTC: ACBFF), Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF), MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF), and MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF).

The sector is focusing itself internationally into diverse countries such as Australia and New Zealand, Latin America, Europe, and most recently Jamaica and even Malta.

Canada’s market alone is projected to reach $22.6 billion after prohibition is lifted. Thanks to the headstart that the country’s legalization-ready government has given Canadian cannabis companies, these firms have a significant head start on their international competitors.

Now these cannabis giants are going global such as Aphria with its rebranding of its European subsidiary to Aphria International which will focus on existing and future opportunities in several European and other markets.

Or there’s also MYM Nutraceuticals Inc. which not only is planning one of Canada’s largest greenhouses in Weedon, Quebec, but is also developing mega-projects in Australia and recently also in Colombia.

Canada’s influence on the global cannabis market through companies like Aphria Inc. (TSX: APHA) (OTC: APHQF), Aurora Cannabis Inc. (TSX: ACB) (OTC: ACBFF), Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF), MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF), and MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF) is going to likely set the bar very high for any new entries looking to catch up once the legalization wave truly takes hold.

CANADA’S CANNABIS CONQUEST

At the forefront of liberation of the global market, is that of the European Union, which already has openings through legal medicinal marijuana markets—which when tallied together brings much higher value than Canada’s expected combined recreational and medical markets.

When Aphria Inc. saw the value of the Italian market, it felt the $826 million price tag it paid for cannabis firm Nuuvera Inc.—which it promptly renamed Aphria International.

According to Aphria International CEO Lorne Abony, the price was a bargain, due to the company’s exclusive rights to one of only seven licenses to import medical cannabis into Italy which could be worth “$9 billion larger than the combination of the recreational and medical markets in Canada.”

Aurora Cannabis Inc. also made its own European move, when it took over CanniMed late last year. Among CanniMed’s assets came the company’s European footprint into the markets of Denmark, Italy, and Germany.

Pierre Debs, Managing Director of Spektrum Cannabis GmbH, a subsidiary of Canopy Growth told Financial Post that he expects to import up to 200kg of dried Canadian cannabis flower monthly into Germany by the end of 2018—up 33.3% from the current 150kgs per month.

“All eyes are on Canada right now, not only for what’s coming (with recreational legalization), but also because Canada has basically defined the standards on how to do a medical cannabis industry,” said Debs, in the FP interview.

Canopy has also already began work on converting an orchid greenhouse in Denmark for cannabis cultivation, and is building eight greenhouses outside of the Jamaican capital of Kingston for export to other Caribbean counties.

However it’s not just the majors who are boldly expanding into international markets. Mid-tier MYM Nutraceuticals Inc. has gone about quietly establishing itself on three continents: Canada (North America), Australia, and Colombia (South America).

While a lot of the international focus has been centered around Europe, MYM is making a case that it has strategically set up much bigger global aspirations through its projects.

MYM’S MEGA-GREENHOUSES, NORTH AND SOUTH

The current flagship of MYM Nutraceuticals resides in Quebec, Canada, which coupled with its first project makes for two significant Quebec projects in the works—The crown jewel being the massive 1.5 million-square-foot state-of-the-art facility project in the municipality of Weedon.

However, MYM truly became an international player when it announced a joint venture on a 1.2 million-square-foot cannabis facility in New South Wales, Australia—Which was announced as possibly the largest of its kind in that country.

Now since January, MYM has made another significant leap, this time into Latin America, with leading Colombian medical cannabis company NEWCANNA.

By striking this strategic deal MYM positioned itself within a low-cost production environment, with access to an enormous cultivation space on which indigenous growers had successfully amassed a production capacity of approximately 217,500 kg of high-grade cannabis for processing and global export.

MYM and its partners fully expect to upgrade this capacity through improvements in technology that the company is already set to use in its other operations. In total, lands agreed upon in the deal span 7,400 acres of cultivation property, upon which production is expected to surpass 1,000,000 kg of cannabis within the next two years.

That expectation surpasses even those projected at its climate-controlled Quebec and Australia facilities. The high mountains of Colombia deliver a perfect climate to cultivate cannabis, which keeps productions costs down to even a fraction of those projected in Quebec.

The company’s plans expand beyond just raw materials and plants. The Weedon facility will have a world class research facility and school, where MYM will further develop its own brands and products for international distribtution.

MYM aims to process their raw materials into medicinal oils, tinctures and a variety of products. Aligned with the facility in Weedon, MYM plans to construct a second research and development laboratory in Colombia, bringing not only its growing capacity internationally, but its product development and distribution arm as well.

POTENTIAL COMPARABLES

Aphria Inc. (TSX: APHA) (OTC: APHQF)

Aphria is one of Canada’s lowest cost licensed cannabis producers, specializing in the production, suppy, and sale of medical cannabis. The company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. It also provides support services in the form of medical consultations, group therapies, and rehabilitation to veteran and first responders. The company sells its products through its online store or phones, as well as engages in the wholesale shipping of medical marijuana plant cuttings and dried buds to other licensed producers. Aphria Inc. is headquartered in Leamington, Canada.

Aurora Cannabis (TSX: ACB) (OTC: ACBFF)

Aurora Cannabis boasts the second highest square footage approved for cannabis production in Canada. Together with its subsidiaries, Aurora produces and distributes medical marijuana products in Canada. The company’s products consist of dried cannabis and cannabis oil.

Aurora is the only cannabis producer located in the province of Alberta, giving the company a cost advantage through its free use of fresh mountain-fed water used on site, and housed under the lowest corporate tax rates and power rates in Canada. Capitalizing on numerous farm credit programs provided by the province, Aurora has positioned itself as arguably the lowest cost-per-gram licensed producer in Canada. Aurora became a licensed producer in 2015, and is based in Edmonton, Alberta.

Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF)

Owners of the Tweed brand of cannabis products, Canopy Growth is a multi-licensed, geographically diverse marijuana producer, described as “one of the world’s — and Canada’s first — premier exporters of marijuana” by the Financial Post in 2016. Canopy currently has a combined growing platform of over 665,000 sq. ft. of production space. It was also the first federally regulated, publicly traded cannabis producer in North America, and the first billion-dollar cannabis corporation. Canopy Growth was founded in 2014, and is based in Smith Falls, Ontario.

MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF)

MedReleaf produces and sells cannabis-based pharmaceutical products in Canada. It offers dried cannabis, cannabis oils, and cannabis oil capsules; and various accessories, including grinders, vaporizers, and lockable containers. MedReleaf was Canada’s first and only ISO 9001 and ICH-GMP certified producer of medical cannabis. It recently announced a joint venture with an Australian partner for cultivation and production of medical cannabis in Australia. The company was incorporated in 2013 and is headquartered in Markham, Canada.

For a more in-depth look into MYM Nutraceuticals you can view the in-depth report at American News Group: https://usanewsgroup.com/2019/04/10/the-top-unicorn-sectors-for-stock-traders-in-2019/

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