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Later this week, Canadian cannabis companies will be converging in Toronto for the Marijuana Business Daily conference and we look forward to engaging with cannabis companies and investors at this event.
This conference brings together strategic industry players and features several leading Canadian companies. Canada’s cannabis sector has been on fire and today, we have highlighted three companies that we think investors need to be aware of.
Canopy Continues to Increase Global Market Share
Canopy Growth Corporation (WEED.TO) (CGC) is a global cannabis leader and the market has been responding favorably to the recent announcements. We are bullish on this global cannabis producer and are monitoring how the management team continues to execute and expand its reach into new markets.
Last week, Canopy acquired the remaining outstanding shares of its Chilean in-market entity, Spectrum Cannabis Chile SpA. This transaction directly supports Canopy’s plan for development within the LATAM region which is home to more than 600 million people. Thanks to progressive regulations and Government support, Chile is known throughout Latin America as an ideal location for medical and pharmaceutical research.
This transaction also builds on the recent acquisition of Spectrum Cannabis Colombia which, leveraging the unique growing conditions and favorable regulatory climate in Colombia, will serve as a regional production and export hub for Canopy Growth across Latin America while Chile will serve as Canopy’s LATAM regional research and development hub.
As countries across the region update their legislation and further define their domestic medical cannabis markets, Canopy LATAM will continue to pursue market access and a position of leadership, ensuring that patients have access to high quality, regulated medical cannabis. We are favorable on Canopy’s position within the global medical marijuana market and investors need to keep an eye on this one.
Cronos Announces Strategic Supply Agreement with Cura
Cronos Group Inc. (CRON.TO) (CRON) is another Canadian cannabis producer that has been capitalizing on the global medical marijuana opportunity. Although Cronos has continued to execute and has significantly advanced its story, the shares have been under considerable pressure and we are monitoring this decline.
Last week, Cronos announced a strategic supply agreement with Cura Select Canada, Ltd., which is on a mission to be the leading provider of premium cannabis oil and hemp oil to the legal U.S. and international markets. Through this agreement, Cura will further expand its reach and will enter the Canadian market to supply domestic and international channels.
Cura has pioneered a highly refined system that fulfills a scalability and quality need unique to a company of this size, with an ability to produce one million grams of oil per month at each of its facilities. The company is known for its Select Oil and Select CBD brands and offers a variety of white label products with emerging regionally-based and celebrity brands.
The company signed a five-year take-or-pay supply agreement to purchase a minimum of 20,000 kilograms of cannabis per annum from Cronos Growing Company Inc. Cura expects to build its proprietary extraction facility on a parcel of land owned by Original BC. The new facility is intended to serve as Cura’s hub for the Canadian and international market.
This is a strategic relationship and represents a significant opportunity for Cronos. The market was not so impressed with this announcement and we will monitor how the team continues to execute and create value.
Maricann Trades Lower on Oversubscribed Private Placement
In 2018, Maricann Group Inc. (MARI.CN) (MRRCF) has been a major underperformer, falling more than 65% from its January high. The Canadian marijuana producer has had two major issues. The first was contaminated cannabis and the second had to deal with the management team. This put enormous pressure on the shares and we have been monitoring this story,
On Friday, Maricann continued to decline after it closed a previously announced private placement of special warrants at $1.60 each that generated approx. $37.4 million in gross proceeds. The Canadian marijuana producer plans to use the net proceeds for working capital and general corporate purposes.
We are monitoring how Maricann is able to execute and will be keeping an eye on this one. The company needs to focus on execution and regain the trust of the market. This is a company we are watching from the sidelines and will be monitoring how the management team executes from here.
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