With legalization on the horizon, Canadian cannabis producers are securing real estate on store shelves—from dispensaries, to pharmacies, to liquor stores.
As it’s said in most commercial undertakings, the most important aspect is “location, location, location.”
This has led to an ambitious staking of ground by cannabis-focused companies, including Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF), Aphria Inc. (TSXV: APH) (OTC: APHQF), Canopy Growth (TSX: WEED) (OTC: TWMJF), and MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF).
In the lead-up to the Canadian government’s lift on marijuana prohibition later this year, clarity over where consumers will be able to purchase products is rising.
Province by province, the concept of cannabis-only dispensaries is still relatively new. As each community wrestles over what kind of access there will be to cannabis, companies are seeking more mainstream nation-wide opportunities to sell their products.
Most recently, Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF) announced both a partnership with a major Alliance of Beverage Licensees, securing itself as a featured brand across multiple licensed liquor stores, and the acquisition of a brand that includes vape pens that are already sold in brick and mortar stores.
Aphria Inc. (TSXV: APH) (OTC: APHQF) and MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF) successfully sought an alliance with major pharmacy chain Shoppers Drug Mart.
And Canopy Growth (TSX: WEED) (OTC: TWMJF) made waves by partnering with a major beverage distributor, in anticipation of future sales in cannabis-infused beverages.
Thinking outside the box could give a significant advantage, as the market gears up for the official rollout.
The official list of companies thinking outside the box includes Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF), Aphria Inc. (TSXV: APH) (OTC: APHQF), Canopy Growth (TSX: WEED) (OTC: TWMJF), and MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF).
STIRRING CANNABIS WITH BEVERAGES
Easily the biggest cannabis story of 2017 was the allegiance between cannabis and beer. The deal between the world’s largest publicly-traded cannabis company Canopy Growth (TSX: WEED) (OTC: TWMJF) and U.S. drinks company Constellation Brands (NASDAQ: STZ) sent shockwaves across both the cannabis and beer sectors.
Constellation, a beer distributor that owns Corona, saw the potential of the cannabis-infused beverage market, and made a $245 million investment.
Not only did the deal blow up the sector with optimism for a future mainstream acceptance, but it also introduced a natural partnership between both the cannabis and alcohol sectors.
That is why the recent announcements by Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF) of an agreement with the Alliance of Beverage Licensees (“ABLE BC”) and the acquisition of Green Tree Therapeutics represent the next form of synergy between cannabis and mainstream distributors.
MAINSTREAM RETAIL ENDORSEMENTS
Closing out 2017, the major Canadian retail/pharmacy chain Shoppers Drug Mart (owned by Loblaw Companies Limited) gave the cannabis sector a definitive stamp of approval—actually, a pair of them.
First was the announcement of a deal with Ontario-based Aphria Inc. (TSXV: APH) (OTC: APHQF), where Aphria-branded medical cannabis products will be sold within the Shoppers Drug Mart chain, online.
Shoppers followed up by inking a deal with another multi-billion-dollar cannabis producer, signing MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF) in the second half of December.
In both cases, the Shoppers Drug Mart endorsement gave shares a price bump.
Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF) also made moves to push its retail offerings mainstream with the recent purchase of Green Tree Therapeutics. The acquisition gives Abattis access to over 130 retail stores.
But perhaps the biggest deal that Abattis has made recently was in aligning with the top association of private liquor store outlets—especially given that all signs are pointing to the government of BC utilizing a distribution model that will involve the liquor board.
ABATTIS LEADING WITH EXPERTISE
By aligning with ABLE BC, Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF) set itself at the forefront of the commercial cannabis rollout. As part of the deal, Abattis is expected to provide its technical expertise, in terms of quality assurance over dosages, terpene analysis, potency, etc.
Among Abattis’s subsidiaries, and key to the agreement, is its laboratory located in BC, which is a leader in extraction, and testing and analysis.
For consumers and vendors alike, quality assurances are going to be extremely important.
So Abattis’s role beyond supplying products to be sold in these licensed locations will be in educating vendors, and providing testing and inspection issues such as:
- potency and cannabinoid profile;
- microbiological screening;
pesticide and heavy metal testing;
- terpene analysis;
- and residual solvent testing.
“We foresee this partnership in the cannabis industry a key part of our future. We feel that testing services provided by Abattis will give us the peace of mind that consumers require regarding dosage quality and safety” said Jeff Guignard, Executive Director of ABLE BC.
While the role for Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF) with ABLE BC begins in a testing role, it’s possible that future supply deals could be on deck in the future.
Another part of Abattis’s network is that of wholly-owned subsidiary Vergence Naturals, which is equipped to provide future cannabinoid-infused products, including perhaps a line of beverages not unlike those that are expected from Canopy and Constellation.
Vergence just recently added to its portfolio the brand Green Tree Therapeutics, known primarily for its brand of vape pens, and currently already being sold in brick and mortar stores, and over 130 outlets in total.
While not a multi-billion-dollar company like that of Aphria Inc. (TSXV: APH) (OTC: APHQF), Canopy Growth (TSX: WEED) (OTC: TWMJF), and MedReleaf Corp. (TSX: LEAF) (OTC: MEDFF), Abattis has strategically positioned itself as an expert in extraction and testing, as well as cannabinoid-infused product marketing.
There is still plenty of room for entities such as Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF) to grow within the cannabis sector that’s still technically in its infancy, as the rollout of legalization finally gets underway.
Aphria Inc. (TSXV: APH) (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.
Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF)
Formerly known as Tweed Marijuana Inc., 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 is the parent company of licensed cannabis producers, Tweed Inc., Tweed Farms Inc., Bedrocan Canada Inc., as well as newly acquired Mettrum Health Corp. 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.
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